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Innovation abounds at Dollar General

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GOODLETTSVILLE, Tenn. — New ideas in the value retail sector continue to originate at Dollar General Corp., particularly as the company is currently rolling out another round of innovation, laying the groundwork for an early pre-holiday sale and launching a new store brand called pOpshelf.

As for Emily Taylor, Dollar General’s newly named executive vice president and chief merchandising officer, she is thrilled to see these initiatives come to fruition.

Previously serving as the senior vice president of channel innovation, Taylor’s work included the launch of the company’s nonconsumables initiative before the reveal of pOpshelf, a new format designed to make shopping for selected nonconsumables categories more exciting and enjoyable.

The same focus on affordability that Dollar General is known for, coupled with an engaging environment designed to take the stress out of shopping, defines pOpshelf. The approximately 9,000-square-foot stores, the first two of which debuted in recent weeks in Hendersonville and Clarksville, Tenn., near Nashville, offer a range of such destination categories as seasonal and home decor, arts and crafts, health and beauty aids, party and entertaining goods, and home cleaning supplies.

The new format grew out of Dollar General’s nonconsumables strategic initiative, which, according to Taylor, was undertaken to improve sales in those categories.

“Based on our research as part of the preparation for this project, combined with what we saw in the marketplace, we realized that the customer who is most interested in this type of experience and offering was different from the primary Dollar General customer in a few ways,” says Taylor. “This female customer tended to skew a little younger than the core Dollar General customer, live in a more suburban community and have a higher income level.”

Understanding the wants and needs of the target audience was a decisive factor in determining what product categories to include in the store, an assortment further energized by a treasure hunt approach to merchandising to reinvigorate joy and bring happiness to customers. That, in turn, helped shape the shopping experience.

“We geared the merchandise mix around occasions and trip destinations,” explains Taylor. “After we talked to the shopper who was most likely to make these types of discretionary trips, we felt like we had an opportunity to win in categories like entertaining, gift giving and seasonal, as well as the concept of ‘treat myself,’ but in a manner where the customer could splurge without the guilt of overspending. Those insights enabled us to develop a really nice combination of value in discretionary categories.”

The pOpshelf format is also designed to encourage browsing. The stores have wide aisles, bright lighting and mobile fixtures to accommodate frequent changes in the product mix in presentation.

“POpshelf has a bit of a store-within-a-store kind of feel,” Taylor says, “so it encourages customers to wander from area to area in the store. That is enhanced through unique fixturing that meets our cost needs, but still makes things really fun and engaging for the customer.”

Citing beauty care as an example, she expands on the pOpshelf experience: “It is one of the really fun areas in the store when you first come in. We focus on beauty in the sense of helping customers pamper themselves. We have cosmetics, but it’s really more about hoping to make the format a treat-yourself destination. We think the customer is going to love all the different ways we offer to engage and really indulge her at such a great value.”

The bid to appeal to a somewhat higher-income shopper with pOpshelf does not signal a departure from Dollar General’s long-term commitment to value.

“Ninety-five percent of the items in this store will be priced at $5 or less,” Taylor emphasizes. “If you look at the average price at pOpshelf and Dollar General, you’re going to get pretty close between the two mixes, but we get there in different ways. The stores will have home decor and domestics, for example, which are items traditionally much higher than the $5 price point. We’re addressing an unmet need in the market — value in the fun discretionary categories.”

In developing the new format, the company has worked to address the consumer’s digital expectations and demand for omnichannel options. The two pOpshelf locations currently offer buy online, pickup in-store service, and a full e-commerce experience is envisioned, according to Taylor. Digital tools have also been harnessed to get the word about the new format out to consumers.

“The campaigns are designed to be highly local in terms of creating that draw. For pOpshelf, digital is currently the most efficient spend and carries the most relevancy to launch the brand,” Taylor says, adding that some 30 pOpshelf stores across the country are planned by the end of fiscal 2021. “Just like some of the fixturing, layouts and product that we have in the stores, we’re going to learn a lot from the marketing and customer response. The great thing about the digital approach is that we can be very reactive, based on what’s successful and what’s not. We continue to learn and adjust as we go.”

The debut of the new pOpshelf concept stores in the Nashville suburbs of Hendersonville and Clarksville was accompanied by a grant to The Confetti Foundation, a charity that puts on birthday parties for children hospitalized or in pediatric hospice care.

“The creation and implementation of pOpshelf is the result of a multiyear journey, so we certainly didn’t have the pandemic as part of our plans,” she says. “As it started to unfold, we realized that this type of store is every bit as relevant now as it would have been a year ago. Through pOpshelf, we can help customers save money in some of these categories that now represent a form of entertainment. And finally — I like this idea — our store really is fun.”