Target launched 'Dealworthy,' here’s what retailers should take away

Discount and dollar store growth has created a new category for retail competition, placing a bigger emphasis on price and convenience than ever before.

On that note, InMarket recently found that dollar store visitation sustained all-time highs, up 20%, when comparing 2022 to 2023.

As dollar stores double down on rapid expansion and consumers continue to flock towards the lowest prices, for traditional retailers, private label brand development has been the saving grace. Target’s latest announcement of its new private label line, “Dealworthy,” further emphasizes the importance of value, even associating it directly with the brand’s name. 

As both the private label and discount competition gets fiercer, here’s what you need to know:

Lean into Why They Shop: Value

No one—not even a beloved big box chain—is immune to the impact of record-high inflation and costs on shopper behaviors.

For upleveling private label strategy, double down on everyday essentials because they’re often what shoppers prioritize. Their high-use rate can be a motivating factor in driving additional store visits and loyalty.

Unlike Target who’s able to undercut the dollar category, brands who can’t launch such a low-cost private label line have to resort to other options to reach budget-conscious shoppers. If that’s the case for you, craft value-driven experiences that empower your brand to stand out, while reaching customers in real-time during moments of consideration throughout the purchase journey.

Strategize creative ways to reach, engage and delight the right customers, reinforcing value-based messaging across all marketing efforts to keep your brand consistently top of mind. For marketers, analyzing demographics, psychographics and purchase behaviors that allow you to go beyond the "who" to understand your customers’ motivations and ‘why’ they shop can create stronger engagement.

Keep a constant pulse on your target audiences and competitive set, adjusting your product portfolio and messaging strategies accordingly. With this customer-driven approach, you’ll be able to more effectively meet evolving trends, forecasting the next frontiers of private label like beauty. 

Expand the Categories to Drive Larger Basket Size

One of the biggest opportunities for driving larger basket sizes is reaching the omnichannel shopper and getting them to come inside the store.

If you conduct a lapsed/lost analysis and find your omnichannel shoppers often stop by quick-service restaurants after completing curbside pick-up orders, create unique promotions focused on pre-made meal offerings valid on pick-up day. Whether it’s alluring discounts like $5 off $25 pre-made meal purchases or half-price rotisserie chickens, strategize promotions that will encourage them to browse your store, increasing basket size.

Additionally, focus on products and categories that are on the rise and take your marketing efforts to the next level by aligning with both value and what’s on trend. As one example, an InMarket survey found that apparel surpassed gift cards as the number one gift item for the holiday season, as the return to office fuels pent up demand for the category. Simultaneously, as dupe trends continue to gain viral traction, lean into these trending “dupe” categories like apparel to attract new customers, helping them achieve the same looks as their favorite influencers without racking up massive credit card bills.

Think outside of the box for marketing your store brands. If Taylor Swift is heading to a city near you, consider in-store and digital activations that showcase your apparel offerings by creating Eras Tour-inspired outfits. Go beyond in-store displays with digital ad experiences and social campaigns so shoppers can browse through your outfit inspiration to drive engagement.

Position Customer Experience as a Value Enhancement

Many discount and dollar stores have struggled with customer experience. Convenience is almost as important as value, which gives traditional retailers an upper hand. 

Target’s Dealworthy line, for instance, qualifies for the chain’s return policy, increasing the convenience factor for shoppers looking to try the private label products for the first time or even cut back on their spending by purchasing private label products as gifts for friends and family.

Make sure you’re consistently educating customers on your convenient and omnichannel offerings to entice shoppers, whether it’s highlighting one-hour delivery or curbside pick-up in your digital circular ads, flagging new benefits on the homepage of your website or loyalty app or incorporating messaging into your mobile ads and email outreach.

Measure and Optimize to Ensure Effectiveness

In today’s world of doing more with less, having the tools to measure the impact of your omnichannel messaging in influencing the consumer journey is paramount. Look for solutions that have the ability to measure channels independently as well as the orchestration of efforts across channels. The best solutions also offer opportunities to test and learn by providing real-time optimization and actionable insights. Combined, these tools can be key drivers of efficiency and increase your return on ad spend to new levels. 

As an industry, we all know that private label drives better margins, and as a result, every major retailer in the U.S. has a share of sales strategy. With the competition heating up, it will be pivotal to closely measure and analyze your brand’s performance in order to adjust your strategies, effectively serve target audiences and drive loyalty.