What Would E-Commerce Look Like for a Dollar Store?

Is there such a thing as Internet resistance retail? The answer has traditionally been yes for certain types of retailers, such as those that provide services such as haircuts or manicures or offer experiences–or, as we are about to discuss, sell products so cheaply that buying them online is hardly worthwhile.

But this category is narrowing as technology continues to disrupt all forms of retail and that seems to now include dollar store-type retailers.

At least one analyst says the category is becoming vulnerable to e-commerce. Bloomberg recently pointed to a Quo Vadis Capital report that noted that the dollar outlets have no strong e-commerce presence, which now “looks like a liability” as Walmart Inc. and Target Corp. are reporting comparable sales at higher rates.

Dollar Tree’s Online Presence

Reading this, we embarked on a thought exercise. Let’s assume dollar store retailers need to step up their online game. What would such an effort look like?

Before we get started, though, it is important to note that there already is e-commerce in the dollar store segment: Dollar Tree’s site dollartree.com has the strongest online presence in the dollar store segment Joe Goldstein of Contractor Calls tells GlobeSt.com.

“According to ahrefs.com, dollartree.com has earned links from roughly ten thousand domains, ranks for 950 thousand keywords, and generates about $1.4 million in monthly traffic,” he says. By contrast though, walmart.com has earned links from 171 thousand domains and generates $61 million in monthly traffic, he notes.

Disrupt or Be Disrupted

Indeed, there is a case to be made that dollar category is already being affected by online commerce — whether it’s by the dollar store’s on efforts or another type of retailer. Steve Gow, co-founder of uppstart.io, an online site for original art, points to the many online shopping sites that have business models that offer items of similar price and quality to those found in dollar stores. “For example, Wish.com sells thousands of household items and electronics at prices that often beat those found in brick-and-mortar dollar stores,” he says. “Wish does this by connecting consumers to manufacturers of low-quality products and electronics overseas.”

Ultimately, dollar stores are another middle man in the retail world that will soon be disrupted or removed entirely by savvy e-commerce sites, he says.

The good news, says Dave Hermansen CEO of the Store Coach, there’s no reason a dollar store couldn’t be successful online, other than the fact that the profit per item is so terribly low. “Whatever moves in your brick and mortar store would move just as well online, provided it isn’t perishable or ultra fragile,” he tells GlobeSt.com.

How They Could Compete

Hypothetically if a dollar store like Dollar Tree wanted to up its game there are certain steps it could take, Goldstein says.

One of dollartree.com’s biggest traffic drivers is party supplies, he notes. “Walmart’s landing page for party supplies offers a few categories (such as gift wrap and tableware) but isn’t very curated. Amazon takes it a step further and offers a shopping portal for parties with options like ‘bridal shower, and birthday tea party, but they mix party supplies like plastic cups and birthday candles with coffee tables, lamps, and other irrelevant products.”

Sites like Dollar Tree could differentiate by creating product bundles or checklists that make it easy to buy matching cutlery, balloons, gift bags, and decor, he says.

Another option would be to cater to businesses more aggressively, Goldstein continues.

Dollartree.com already offers a shop by business portal that includes such product categories as restaurants and cleaning services, he says. “What they lack is any supplementary content: their cleaning services page doesn’t have any information about how to open a cleaning service, the most essential items to get started, expert recommendations — beyond one featured quote — or any feedback from a specific cleaning business.

The Obvious Challenge

Of course, it goes without saying that shipping will be expensive especially compared to the price being paid. Also these businesses run on the tightest of margins, which means offering free shipping becomes a financial dilemma.

One solution is to use their website to drive more in store traffic, Mark Aselstine, founder of Uncorked Ventures tells GlobeSt.com. “A pickup service would work well” in this scenario.

Anas Ahmed Siddiqui, CEO at TechoGhetto, suggests offering goods in bulk, as in wholesale. “Offering products on wholesale and cheap rates will attract not only individual buyers but also shops and suppliers,” he tells GlobeSt.com.