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Discount Chains Are Hopping on the Online Delivery Wagon

Business

Discount chain- Dollar Tree. | Image from KenWiedemann

Many of the leading discount chains that resisted the initial online shopping boom are now offering delivery from their stores in 2021.

Since the beginning of the COVID-19 pandemic, there has been a vast increase in shoppers using delivery when ordering online. This trend has created a split between companies with a functional e-commerce network ready to handle this increase in delivery demand and brick-and-mortar businesses that do not have an online storefront allowing their customers to order from home.

Some companies such as Walmart or Ikea were able to jump on the bandwagon just before the pandemic started, allowing them to increase their revenue through e-commerce significantly.

Many leading discount chains such as Dollar General, Dollar Tree, Family Dollar, Five Below, and Grocery Outlet have recently begun offering delivery options to their customers. Previously they preferred the idea of keeping as many of their customers as possible in physical stores, fearing that online shopping and delivery would be unprofitable.

These discount stores have launched their delivery services primarily through specialized delivery companies such as Instacart or DoorDash, which take a percentage of each sale. These platforms already have a well-established logistics network, allowing the merchandise to be delivered the same day it is ordered.

The goal of the discount stores’ change in tactics is to capture new clientele with different shopping habits. The existing clientele is not particularly inclined to buy online, as Dollar General discovered when it offered the ‘buy online, pick up in-store option and the ‘scan and go’ service, neither of which were well received by the existing customer base.

Eric Lindberg, CEO at Grocery Outlet, explained: “We think being online initially here through this pilot with Instacart is a great way for us to introduce the brand to new shoppers.”

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