In January 2014, Family Dollar customers saved more than a nickel for every $2 spent at Walmart (Grom, 2014). A merger between the dollar store giants would mean they could leverage economies of scale and further drive prices lower than Walmart's. Moreover, lower prices would appeal to lower income and rural customers, a key segment for Walmart. Walmart sales will continue to decline if they do not react to the increased competition from Dollar Tree and Family Dollar.
Many of us shop at Walmart; however, let's take a look at what the demographic profile is of the person who frequents Walmart the most. According to the results of a consumer survey conducted by BIGinsights, the average Walmart customer is female, married, between the ages of 45-54, annual income of $50,000 to $74,000, and lives in the south (Carmichael, 2012). The gender and marital status is not surprising because we know that women are most likely to make the purchase decisions for their family households. Additionally Walmart has made itself such a one-stop-shop that mothers and wives would especially benefit from going to just one store to fulfill all their shopping needs. Lastly it makes sense that the average Walmart shopper would make less than six figures because the retail giant heavily advertises their low prices, which attract consumers who are on a budget and price sensitive.
Retail is an industry that is comprehensively affected by the shift in consumer shopping behavior due to technological advances. According to USA Today, "The convergence of smartphone technology, social-media data and futuristic technology such as 3-D printers is changing the face of retail in a way that experts across the industry say will upend the bricks-and-mortar model in a matter of a few years" (Swartz, 2012). The abundance of information available on the internet gives consumers the opportunity to visit physical stores less and find the products they want online.
