BOPIS At Dollar General? Not All That Crazy

In coming months, Dollar General will become the first dollar store chain to test BOPIS at select stores. The service will initially be offered through the DG GO! mobile app.

Dollar General was late to the game in launching e-commerce in 2011 but continues to invest in its digital strategy largely through its app, including recently adding digital coupon push notifications. About 75 percent of the chain's stores offer Cart Calculator, a feature that allows customers to use their phones to scan items as they shop to see a running tab. Mobile checkout is just starting to be rolled out.

For many on the RetailWire BrainTrust commenting last week in an online discussion, BOPIS seemed like a logical next step in Dollar General's digital transformation.

"If BOPIS works for QSRs like McDonald's and Starbucks, where item counts are even smaller than traditional dollar or convenience stores, it can work for Dollar General," wrote Susan O'Neal, CEO of Dabbl. "Furthermore, Dollar General has an above-average basket size compared to a true dollar store because of its broader merchandise selection - filling in gaps in rural areas where the nearest grocery store is 30 minutes or more away. As such, it is by nature a seller of convenience as well as price. BOPIS would be an extension of that same value proposition."

"BOPIS offers shoppers an easy way to pick up errand items on-the-go," commented retail writer Meaghan Brophy. "BOPIS also helps customers ensure the items they need will be there before they make the trip to the store, which is important for every shopper."

"It's a competitive advantage over similar formats, and I believe that as the convenience becomes known or is promoted, it will draw new customers to the franchise," wrote Carlos Arambula, vice president of marketing and business development at Estrella Brands.

Approximately 45 percent of Dollar General's shoppers use digital tools from the retailer or other merchants when they shop, according to the company. "Digitally-engaged customers" check out with baskets twice the company average, although Dollar General's average basket size is $12 or less, containing five items or less on average.

If staffing does not support the ability to execute a BOPIS customer shopping experience then the offering will do much more damage than good.

On Dollar General's second-quarter conference call in August, CEO Todd Vasos, said the smaller basket size is the reason for a "slow" test of BOPIS.

"If Dollar General wants to be in e-commerce then BOPIS makes more sense than delivery, which just wouldn't be economical for a dollar store," wrote Neil Saunders, managing director of GlobalData on RetailWire. "However if this takes off in a serious way, then Dollar General might need to review staffing as this will take a toll on associates' time - which is already fairly tight across the chain."

"Staffing will be key," wrote Cynthia Holcomb, CEO of PrefEye. "If staffing does not support the ability to execute a BOPIS customer shopping experience then the offering will do much more damage than good. Beware of bright shiny objects!"

For Walmart and Target, e-commerce, backed by aggressive BOPIS efforts, has been by far their fastest growth channel and is seen as a competitive advantage against dollar stores.

The primary reason BOPIS is expanding in appeal is because consumers want to avoid delivery costs. Secondary reasons are to receive their goods faster and take advantage of promotional offers.

A Wall Street Journal article exploring Dollar General's move said adding BOPIS provides some convenience and may appeal to younger consumers who expect such services. But it also noted Dollar General's stores are easy to navigate for in-and-out shopping versus cavernous big boxes.

For RetailWire BrainTrust member Steve Dennis, president of Sageberry Consulting, providing this type of convenience is a necessity moving forward.

"BOPIS is becoming table stakes in providing a well harmonized shopping experience," wrote Mr. Dennis. "The bigger question, notwithstanding others' comments about some of the operational challenges is, what took them so long?"