Dollar General is testing same-day delivery at about 75 of its stores as it tries to keep pace with bigger rivals such as Walmart. This comes after a soft launch in September and will be available at thousands of locations, according to CEO Todd Vasos. The delivery service is being made possible by a third-party provider, though the company has not said who that provider is.
The announcement of same-day delivery at Dollar General shows its response in keeping with an increased competitive pressure from peers like Walmart, Amazon, and Temu. Such companies have achieved integration of convenience and value for money into a sale, further developing their digital shopping platforms. For example, Walmart has been reporting net gain in its e-commerce business for ten consecutive double-digit quarters on curbside pickup and faster home delivery.
Historically, Dollar General has put less focus on e-commerce compared to its dependence on in-store sales, which has meant that the company does not usually report on its online business performance. However, over the last few months, Dollar General has been faced with both economic conditions and business strategies. High inflation has caused consumers, especially from low-income households, to cut back on discretionary spending. Other fines regarding dangerous conditions of the stores, including blocked exit fire exits, have also tarnished the reputation of the company.
Vasos admitted Dollar General has experienced a market-share decline, especially for mid-income consumers who have become customers of Walmart. Its newly launched delivery service called DG Delivery lets customers place their orders via the Dollar General app and receive items as quickly as within one hour, without any increase in prices over what it sells in-store. It combines digital coupons and cash-back rewards, with no service charge or minimum order required.
Although still at the nascent stage, same-day delivery is considered by Dollar General as an imperative opportunity to grow the business, including increasing customer engagement on its app. The service is expected to play a crucial role in the retailer’s future strategy, now operating in only a few stores. Dollar General has more than 20,000 stores located throughout the U.S. Most of these are in rural areas, and this poses some challenges but also opportunities for further business expansion.