Why Discount Stores and Warehouse Clubs Have an Advantage in the Battle for Customer Attention

A single retailer makes up less than 0.5 percent of a shopper’s total retail visits, according to recent data. Adding to that challenge, consumers spend less than 5 percent of their free time shopping each month. These realities of fragmented shopping, combined with the impact of rising costs on essentials and discretionary goods, have made it even more difficult for all retailers to not only capture the attention of shoppers, but be the one they ultimately choose.

As value remains the key factor for winning over consumers, dollar and discount stores, including grocery and warehouse clubs, are uniquely positioned to win over shoppers looking for opportunities to stretch each dollar.

The Dollar Store Evolution: Meeting the Opportunity

Dollar, discount and warehouse club stores have proven to be successful at meeting the needs of both consumers relying on their unbeatable prices to make ends meet, as well as higher-income individuals seeking the best prices on their go-to brands.

Since the early days of the "Value Wars," discount and dollar stores have doubled down on expanding their product portfolios to include staples like produce, frozen meals and household items, while also debuting higher-ticket offerings, like home décor, that still undercut the prices of mass merchants and grocery chains. This expansion enables dollar stores to grow basket size and increase incremental purchases amongst its primary shoppers as well as higher-income shoppers looking for better deals.

The focus on value will only continue as tariffs hit and inflation continues to rise. For example, recent InMarket data found that private label spending was up 33 percent for frozen meals, 30 percent for cookies, and 21 percent for paper goods. The data also shows that consumers are now purchasing “nice-to-have" categories, like frozen novelties and trail mix, increasingly on discount, creating an opportunity for dollar stores to lean further into this subset of products. For essential items like coffee, purchases at warehouse clubs are up 21 percent as consumers purchase bulk sizes to save on costs.

Strategies to Convert Key Customers in 2025 and Beyond

There are four effective strategies to evangelize the opportunity and drive growth as the treasure hunt for value continues:

1. Unpredictability and fragmentation mean a data-driven approach is the secret sauce for success.

As economic hardship accelerates the shift towards fragmented shopping, retail marketers have real-time insights on-hand to meet the challenge.

Get creative with analyses to uncover opportunity. Conduct a lapsed/lost analysis to identify the customers that might have switched to competitors or haven’t visited your store recently, and will likely be willing to re-engage as they hunt for the best prices and deals amid increased uncertainty. A movable middle analysis is another great example, focused on identifying opportunities for growing share in the market among customers who are frequent category buyers that could have a massive upside for your brand.

2. Without a real-time, full-funnel approach, you’ll lag behind.

In our fragmented shopping landscape, no sale is guaranteed. However, there are also more opportunities for growing share.

The key? Connect with consumers throughout the entire purchase process, orchestrating both top-of-the-funnel tactics to drive awareness and consideration with bottom-of-the-funnel efforts at the point of purchase. Just like in life, timing is everything. Remind shoppers of your brand and value in the 24 hours to 28 hours leading up to their next purchase and in those final moments of consideration — while they’re shopping. For dollar and discount retailers, this can be as simple as triggering an engaging digital circular mobile ad experience, highlighting the best deals or new products that week. Consider ways to make those digital experiences even more personalized, leveraging tentpole moments like holidays or seasonal opportunities to showcase product bundles and affordable decor when spend is up and folks across all income levels might be looking to save.

3. Real-time measurement and optimization also play a role in improving success.

Letting performance guide you and optimizing campaign’s while in-flight maximizes impact, proven to drive 11x media effectiveness. Enhanced measurement also ensures you have the in-depth performance insights needed to improve future campaigns. As shopping patterns become more and more fragmented, a holistic measurement approach that highlights success across channels and retailers is pivotal for guaranteeing a true understanding of campaign performance.

The biggest takeaway: Leave no stone unturned.

4. Customer experience still plays a role as value becomes a common denominator.

Discount and dollar stores have notoriously fallen behind in customer experience. Lean into the data to understand consumers’ biggest grievances with your CX, whether in-store or across your marketing efforts, to evaluate areas for improvement. If you’ve focused on improving the in-store experience with cleaner stores, enhanced layouts and signage, and new refrigerator or produce sections, incorporate messaging into your ads that highlights those improvements to draw lost customers in. Leverage digital marketing and real-time messaging to help speed along the shopping process and optimize the in-store experience. Indicate where key products of interest can be located within the store to expedite the shopping and savings benefits.

Retailers must continue to evolve based on consumer needs and trends, responding to when and where buyers find themselves shopping most. By using real-time technologies and insights, marketers can analyze consumer purchase behaviors and adapt accordingly to drive success and improve customer experiences even during challenging times.

Michael Della Penna is the chief strategy officer at InMarket, the leader in real-time marketing and measurement.