Discount Stores Find Their Way Online

Consumer expectations help pave way

November 7, 2017

With a focus on bulk goods, groceries and items that are too inexpensive to make shipping cost-effective, discount and variety stores have never been a natural fit for ecommerce. But that’s beginning to change. Consumers are becoming more accustomed to buying a wider variety of products online, and startups and delivery services are emerging to facilitate this activity.

Those are the findings from eMarketer’s latest report “US Digital Commerce 2017: Discount and Variety Stores." eMarketer PRO subscribers can access the report here. Nonsubscribers can purchase the report here.

According to US Department of Commerce figures, discount and variety store sales have grown steadily since 2009, reaching $550.83 billion in 2016. The sector’s percentage of total retail sales, however, ticked downward during that same period, dipping below 17.0% last year.

Following the US Department of Commerce, eMarketer groups big-box mass merchants, warehouse clubs and dollar stores under the discount and variety umbrella. No retailer in this sector has more than single-digit ecommerce penetration, and while some dollar stores do have online sales components, the percentage of sales from that channel is negligible at best.

Warehouse clubs’ bulk shopping model has not typically translated well online, and the format lends itself to consumers hunting for deals (including deals on things you didn’t know you needed) in a physical store. However, these assumptions are changing, with startups like Boxed Wholesale and (acquired by Walmart in September 2016).

In the latest episode of “Behind the Numbers,” eMarketer analysts Krista Garcia and Yory Wurmser discuss how discount stores are weathering the current retail shake-up. This episode is made possible by Criteo.