The dollar stores used to be one of my favorite places — you could go knowing that you could indulge in an impulse to treat yourself to anything in the store and it wouldn’t impact the budget. No more. On a recent visit, I saw items for 50 cents, 75 cents, $1, $1.25, $1.50, $1.75, $2, $3, $5, and $6. Once they violated the one-dollar threshold, all bets were off as to what it would cost, making it just like any other retailer.
While it has been disappointing to watch the stores lose their distinctiveness and competitive advantage, it has also been interesting to note the levels of complexity their strategy has introduced. For example, many items have prices printed on them (which will make it challenging when they raise prices again). Each item now requires signs on the shelves indicating the price. The stores have installed price scanners so confused customers can figure out which price point their items will be charged.
The more components in your system, the more energy needed to maintain it. Don’t underestimate the multiplier effect of complexity.
