STRATEGY

The Bergdorf of Dollar Stores

Dollar General wants to do what even Netflix couldn’t: Make a spinoff that’s better than the original. Meet Popshelf, a concept from a dollar store that won’t be branded as a dollar store.

The vibe: Discount Magnolia Home. Popshelf will sell home goods and party supplies catering to suburban women in households making up to $125,000/year. Execs gave “charcuterie trays” a shout-out in early press, so you know it’s fancy.

• For comparison: Dollar General’s average rural customer household makes $40,000/year.

The timing: Dollar General is one of very few retailers that can test drive upmarket concepts in the age of mass store closures. In Q2, the chain reported a 19% comparable sales bump. 

But Dollar General will limit Popshelf to 30 locations in the first fiscal year—restraint for a chain with 16,700+ stores.  

Stealth on the shelf

Wiping Dollar General’s fingerprints from Popshelf’s branding may sound extreme. But “the key thing with any spinoff is that the new format [...] needs to be its own concept with its own values and positioning,” Neil Saunders, managing director of GlobalData Retail, told me via email. 

• Subtext: Affluent shoppers want deals, but they don’t want to shop somewhere that sounds cheap. 

Looking ahead…the competition to grab minivan drivers’ loose bills will be fierce. 

• Dollar General stores sell groceries and essentials in rural areas where there are few stores; Popshelf’s entering suburban centers with 100% impulse buys. 
• Those discretionary items, Saunders said, can already be found at retailers spanning Five Below, Dollar Tree, Walmart, and Target. 

One solution? Dollar General execs said Popshelf stores will spread surprise items into stores on a regular basis, mirroring the “treasure hunt” experience TJX pioneered and ideally driving multiple visits. 

My takeaway: We’ll know Popshelf is a success if its target customers never find out who’s pulling the strings. 

RETURNS

Fast Pass for Packages

After the holidays, shoppers can wait in a two hour line to return their custom back-scratcher at the post office...or they can hit the easy button. 

Staples will process online returns from other brands at 1,000+ stores in a partnership with reverse logistics firm Optoro. 

• The program begins in January. The full list of participating retailers is TBA. 
• Shoppers will scan a provided QR code to return their castoffs; Staples will handle packaging the item to ship back. 

Returns have returns

For retailers: When shoppers walk into Staples for a return, they could walk out with a new pack of pens. It’s worked for Kohl’s: After starting to process Amazon returns in-store last year, Kohl’s execs said new customers followed.

For shoppers: Convenient returns = repeat purchases, even if the first jeans were too tight. 84% of shoppers said a positive return experience makes them want to shop with a brand again, in a May study by returns firm Doddle.

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DELIVERY

Isn't That Convenient?

Tired: Grocery delivery.

Inspired: Everything delivery.

GoPuff is valued at $3.9 billion after closing a $380 million round, TechCrunch reports. 

• Demand for GoPuff’s 30-minute convenience deliveries has—all together now—surged this year. Its fiscal advantage? Buying inventory directly from CPG brands to stock in micro warehouses. 
• GoPuff is currently available in 500+ U.S. cities, with plans to enter more. 

Instacart more than doubled its pre-pandemic valuation. After a private funding round, Bloomberg reports Instacart is now worth $17.7 billion. 

• Instacart’s on track to process $35+ billion in grocery sales this year, and it’s got ambitions to expand its retail partnerships. 
• It currently processes deliveries from beauty (Sephora) to big box (Walmart). 

Why it matters: GoPuff and Instacart have slid into a delivery window that services like Amazon Prime can’t meet in every market, all thanks to micro-fulfillment via existing stores and small-format warehouses.

WHAT ELSE IS BREWING

• Affirm confidentially filed to go public. 
• Macy’s plans to take the 15 Percent Pledge, Bloomberg reports. 
• CVS will label all photoshopped images in its beauty aisles. 
• L.L. Bean has a new wholesale partner: Zappos. 
• Kroger is opening two more ghost kitchens.
• New twists in JCPenney’s bankruptcy proceedings.

SWAPPING SKUS

This week aged me by 20 years. So I’m reading up on Gen Z-oriented brands to feel young again.

• Teen brands aren’t usually parent-approved (CC: Brandy Melville). Will that change with parents as founders? Better yet, will the teens notice? (Glossy)
• Shein releases 500 new items per day, and generates almost as much controversy. (Business Insider)
• Gender neutral stores have been on retailers' radar for years. Now, Adidas is testing the concept in a custom store. (Vogue Business)

FRIEND OR FAUX?

Three stories are true; one I bought off the curb on Canal St. Which of the following retail stories is fake?

1. Sam’s club launches “petite packs” for downsized holiday dinners.
2. Bed Bath & Beyond runs fly swatter promo after the vice presidential debate.
3. Nike releases sneakers with built-in parachutes.
4. Lowe’s will host curbside trick-or-treating at all stores. 

Keep reading for the answer.

ICYMI

Catch up on the Retail Brew stories you may have missed.

• Holiday Shoppers Will Definitely Spend Less This Year
• What Every Apparel Brand Can Learn From Athleisure’s Surge
• Sneaker Resale Is an International Success, StockX Reports

FRIEND OR FAUX? ANSWER

2. No, Bed Bath & Beyond didn't offer special fly swatters (that I know of).