dollar stores might seem like a great
way to save money just look at this
battery pack for adult and this
toothpaste also a dollar but before you
rush to the checkout take a closer look
at the brands and sizes they're
different from what you see at a local
CVS or Walmart and it turns out those
are just some of the sneaky ways that
dollar stores get you to spend more
because you are looking for that rare
gem you know maybe it's picture frame
that would normally cost you $4.99 and
you get it for 159 and this treasure
hunt intentionally happens in a small
space
overall dollar stores tend to be smaller
in size a typical Dollar Tree for
example is just 8,000 to 12,000 square
feet that's roughly one 18th of the size
of the average Walmart this makes for an
easy shopping experience where you can
quickly go through the entire store
increasing your chance of seeing
something else that might strike your
fancy their inventory set up is also
strategic seasonal products are placed
in the front so you're tempted by the
newest products right away most of which
are single-use items like holiday
related parties employees while the most
popular items are placed in the back so
you have to walk through the entire
store to get to it family dollar for
example puts all the food and toys in
the back and these tactics are all part
of a dollar stores strategy to get you
to buy more while you're there in
marketing this has a term it's called
the momentum effect it's a super
interesting effect which essentially
shows that if you buy something which is
really cheap then after that the
likelihood of you're buying something
else that is more expensive increase so
shopping creates a movement
so the more things you see as you pass
by the more you'll likely purchase small
impulse buys like candy and chapstick
are also available at the registers to
tempt you during checkout but getting
you to buy more per visit isn't the only
tactic it's also the frequency of visits
you make take that $1 tube of toothpaste
here's a Colgate toothpaste we bought at
CVS compared to the same one from Dollar
Tree these smaller products keep prices
low but also mean you'll need to replace
them more often which means more visits
and even more spending plus it's
ultimately cheaper to purchase household
supplies like toilet paper or detergent
in bulk something you won't really find
at any dollar stores a 6-pack of toilet
paper at Dollar General costs three
dollops which is 50 cents in roll
whereas if you order a 24 pack on Amazon
for 5:48 it comes out to 23 cents on
roll compound that with how much toilet
paper the average American uses each
year and that's about 38 dollars in
savings for buying in bulk in addition
to size brands are another thing that
keeps customers coming back but not in a
good way I would say the general
psychology behind Dollar Stores is to
look for consumers who are interested
these are called deal row customers
they're customers who are not very brand
loyal but will for example buy whatever
brand is in a store which is our deal
because they believe in our first $1.00
pack of double A batteries look like a
bargain next to a seven dollar pack from
CVS the dollar store batteries however
are more likely to leak according to
Kiplinger and because they are made from
carbon and zinc they don't last as long
as name-brand alkaline batteries from
energizer and Duracell
and once they die you'll have to go buy
more part of the reason dollar stores
like Dollar General have more off-brand
private label products like this is
because it gives companies more control
over manufacturing costs so they can set
their own prices but as we've seen it's
not always as great of a deal as it
first appears
and yet dollar stores are only getting
more popular in the US a new dollar
store opens on average every six hours
and according to the Institute for local
self-reliance there are more dollar
stores than there are Walmart's and
McDonald's combined part of what makes
them so successful is location big
dollar store company's target low-income
neighborhoods where people don't have
the disposable income or resources to
purchase in bulk or higher quality
technology dollar generals core customer
for example is from a household making
$40,000 a year or less and while it's
not always the best deal for customers
in the long term dollar store company's
arthritis in 2018 Dollar Tree made more
than 22 billion dollars in revenue and
Dollar General stock is worth thirty six
point five billion dollars five times as
much as Macy's current value and part of
all that success is how dollar stores
make us feel whatever consumers feel
they have a bargain they feel that
they're smart shoppers that makes them
feel extremely happy so that is the key
appeal of a dollar store I think you can
find good bargains there but then again
if you think about whether dollar stores
are a good deal and pricing I think
everything may not be priced at the
cheapest price you could find it so just
remember sometimes steals are in fact
too good to be true
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