Four online development at North American discounters

Date : 18 February 2021

Maxime Delacour

Senior Retail Analyst

With Aldi US expanding click and collect to more stores and Family Dollar announcing a nationwide partnership with Instacart, we look at four ecommerce developments from North American discounters.

Aldi US to add click and collect to another 500 stores.

With the fast rise of ecommerce and the success of its curbside service (click and collect in partnership with Instacart), Aldi will add the service to another 500 stores by the end of 2021. This will bring the total of stores offering the service to 1,200.

Globally Aldi is the first major food discounter to roll out this service. It launched the service in the US and the UK where the penetration of online is already high. The fact Aldi is rolling this service out suggests it is profitable as this is one of their key measure of success. Among the reasons that could explain the profitability of this solution at Aldi are the smaller stores’ footprint and the reduced assortment contributing to ease and fast picking process.

To learn more about the profitability of the different online grocery models and services, Retail Analysis subscribers can access our series of reports on Online profitability here.

Family Dollar partners with Instacart for same-day delivery

Family Dollar is rolling out same day delivery in partnership with Instacart to more than 6,000 stores to align with the growing demand for ecommerce in the country. Mike Witynski, president and CEO of Family Dollar parent Dollar Tree Inc said: “We are encouraged by the initial results of our 275 pilot stores, and are pleased to expand the Instacart platform to more than 6,000 Family Dollar stores across the country.”

Across Europe and North America, most discounters chose to partner with grocery delivery specialists. It is easy to implement but the retailer loses the direct relationship with the shopper with a potential risk of switch to competitors. However, this is a solution we believe is likely to continue to be rolled out across the channel globally in the medium-term.

We recently published are report on how discounters will respond to online. Where we explore various online grocery models and services and the likeliness of their roll out by discounters. Subscribers can access the report here.

Dollar General rolled out its click and collect service DG Pickup in 2020

At the end of 2019, Dollar General launched its own click and collect service called DG Pickup. The COVID-19 pandemic accelerated the development of the service with nearly all 17,000 stores offering it in early 2021. The service is free of charge and average basket size is similar to the one from stores at $13. The service is fully integrated to the DG app, enabling shoppers to use their digital coupons and more importantly Dollar General can capture more detailed shopper data.

Once the order is ready, shoppers can collect it from their local store at a dedicated self-service shelf near the checkouts. The order is located on a specific space of the shelf with an identification number communicated to the shopper via the app. This is an efficient solution as it doesn’t require any time or availably from employees to hand over orders to shoppers.

Source: Dollar General

Dollarama uses ecommerce to target businesses

Canadian Dollar store chain Dollarama took a unique and different approach compare to other dollar stores when launching its online service in 2019. It decided to focus on bulk products only enabling it to directly target businesses and tap into a new stream of revenue. Selling products by cases also makes orders more efficient to fulfill thanks to less handling costs. The 1,000 products available sold at the same price point than in-store and the standard flat fee delivery of $9.99 to most locations mean this online service can be profitable.   

Source: Dollarama

This is a unique example across the discount channel and more widely among the industry where a retailer uses ecommerce to tap into a completely different pool of customers. Suppliers should consider what could be the long-term impact of such service on their existing B2B business.

So how will North American discounters continue to evolve?

Join us for our first Future Talk of the year on 23 February 2021 where we will be discussing the trends shaping the grocery market in the US, including online and discount. We will also share our view on how the store of the future will evolve.

See below for more details and registration, for Retail Analysis subscribers only.

Where is grocery retail heading in North America?

23 February 2021
10:00AM - 11:00AM EST
3:00PM - 4:00PM GMT

Join us as we discuss the trends driving change in North America and the impact of COVID-19 on the store of the future.
For subscribers only.

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