To grab the millennial dollar, Hollar has made an effort to differentiate itself from other low-cost shopping competitors by eschewing Dollar Tree’s bulk orders and Amazon-style add-on pricing. Instead, it offers free shipping for $25 carts. (Dollar Tree, which declined to specify how many millennial shoppers it has, said in a statement that it serves a “broad age range of customers, including millennials, that love the fact that every item in the Dollar Tree store is priced at one dollar.”)
“It’s a new space for the dollar item,” Hollar director of merchandising Michelle Andino, 32, said. “It was a new concept where I don’t have to shove my kids in the car and lug them to the dollar store. I could have it delivered to my door—and I don’t have to buy in bulk.”
The most notable difference is Hollar’s dedication to mimicking a high-end shopping experience, further removing the customer from the dusty, flourescent-lit aisles of the real thing. While Dollar General’s website leads with a banner about “hot deals” and digital coupons, Hollar posts bestsellers in a colorful layout and doesn’t use the phrase “dollar store.” An account is necessary to browse the site, likening it more to Gilt Groupe Inc. and RueLala Inc.—websites that offer limited-time discounts on certain items.
Hollar, which is, after all, a one-year-old startup, has yet to turn a profit. Despite millennial enthusiasm about dollar shopping, dollar store earnings suffered last quarter. Dollar General missed second-quarter estimates and Dollar Tree reduced sales expectations, both in part because of limitations on food-stamp enrollment.
But Wall Street remains optimistic about the future of this segment. “The dollar stores business has been increasingly getting healthier and better,” said NPD chief retail analyst Marshal Cohen. “Expanding their products to be beyond the dollar certainly helps.” He added that the millennial focus on spending on experiences rather than possessions also helps drive dollar store spending. (There’s also the matter of the crippling debt millennials face.)
Regardless of what the dollar industry cooks up next, millennials will likely be willing to try it—and tell one another about it. And what about that vague self-consciousness that comes with buying a cheesy dollar-store tchotchke? “You’ll see people that are really owning things that used to be kind of embarrassing; you’ll see people wearing it like a badge of honor in my generation,” explained Ellefson. “I think that’s kind of cool. Millennials are not interested in being shamed about things.”
This article was provided by Bloomberg News.