Dollar General left out
Tom Dougherty, CEO – Stealing Share
21 August 2014
Now, Dollar General wants in
Update: Turns out Family Dollar has rejected Dollar General’s takeover bid because of anti-trust issues. Still, the problem still stands. No one knows the difference between all the dollar stores, so who cares?
Now, this is hilarious. Earlier, I posted that Dollar Tree was planning to buy Family General – and I said that it didn’t matter because, in the eyes of consumers, they are one and the same anyway.
Now, Dollar General wants into the game. Reports say that Dollar General also wants to buy Family Dollar and its unsolicited offer is actually greater than that of Dollar Tree.
The reason I find this so funny is that there isn’t a whisker of difference between all three. The only reason for greater market share from one to the other is simply location, which is why Dollar Tree and Dollar General are so hot to buy Family General. They want to have the most real estate.
They know it makes no difference because none of the brands bring any value to the purchaser or the seller. It’s like Pluto and Goofy joining forces. Aren’t they the same dog? (Oh, that’s right. Goofy wears clothes.)
If one of the buyouts happen (and, in my mind, they should just all join forces into one company), there is opportunity. The dollar stores compete against other discount shops, even the giants of Walmart and Kmart.
The idea is that the competition isn’t the other dollar stores. Or, at least, it hasn’t been because none of them have developed a differentiating brand that would present an emotional choice.
The aim is to create preference so that customers would inconvenience themselves to come to their stores. That means understanding that your competitors are all the ones that fulfill the want or need that you fulfill. If you sell a cheap plastic cup, then your competition is anyone who sells a plastic cup – including online retailers.
However this shakes out, the future of the combined retailer will have to uncover what makes a customer go to a dollar store that goes beyond price. What are the emotional undercurrents driving that action?
Right now, the dollar stores seem to understand that they are all alike. Which is why they are all trying to out-bid each other for the table scraps.