Dollar General's Kathy Ireland Partnership: Genius Move or 90s Nostalgia Fail?
Dollar General is launching new celebrity home collections including partnerships with Kathy Ireland, and other brands as part of its "Home Valley" expansion across 20,000+ stores. The strategy aims to attract higher-income shoppers seeking quality home goods at discount prices through a "treasure hunt" shopping experience.
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Transcript
Dollar General is teaming up with Kathy Ireland for a new celebrity home line.
Speaker A:According to Chain Storage.
Speaker A:Again, the discount retailer is revamping its quote Home Valley, end quote home selection with collections from celebrities, name brands and designers, including supermodel Kathy Ireland, Betsyville, Beverly Hills Polo Club, and Simply Belle by Simply Southern.
Speaker A: Launching during summer of: Speaker A:Chris, what do you think of Dollar General moving into private label home goods?
Speaker B:Wow.
Speaker B:I like this one too, Anne.
Speaker B:I'm free on the likes, so all those people that call me a hater on YouTube, you know, check us out more regularly, folks.
Speaker B:Yeah, I'm hitting you trolls.
Speaker B:Yeah.
Speaker B:All right.
Speaker B:But I like this for two reasons.
Speaker B:One, the margin on home is good, like probably better than most things that Dollar General sells.
Speaker B:So I like that.
Speaker B:But secondly, I think strategically, as we've talked about on this show numerous times, things always move to the lowest price option.
Speaker B:So Kathy Ireland, little background for me.
Speaker B:Kathy Ireland.
Speaker A:Oh my God, where are we going with this?
Speaker B:Kathy island was the it girl for me.
Speaker B:Oh, yeah, like, absolutely.
Speaker B:And it was funny because when I was heading up home for Target.com I would get pitched her stuff every day of the week and I'd be like, no, no.
Speaker B:As much as I wanted to meet her, I couldn't be like, no, I just can't because it just didn't fit with us in the brand.
Speaker A:That's very good of you.
Speaker B:Right.
Speaker A:You could have been like, come in for the meeting.
Speaker B:For sure I could have, but I didn't.
Speaker B:I was because like, I couldn't take myself.
Speaker A: Cover model: Speaker B:This is the whole reason I watched that movie.
Speaker B:But anyway, I didn't do it.
Speaker B:And so like, and the reason was because it didn't fit my brand ethos.
Speaker B:But I think at the time, and I don't, I don't remember exactly, but like Walmart, I think she was at Walmart or she was at 1.
Speaker A:Kmart.
Speaker B:Kmart, 1 of those.
Speaker B:And you know, so she has a position in the marketplace.
Speaker B:And so naturally now she's just, you know, moving, you know, down market a little bit.
Speaker B:Which again goes back to the idea of like, okay, over time.
Speaker B:I think we've talked about this on the show in the past.
Speaker B:I see Dollar General becoming a one stop shop.
Speaker A:Yeah.
Speaker B:For an even better, you know, at even lower prices than what Walmart or Target.
Speaker B:Could potentially do, which is just basically Clayton Christensen's theory of competitive dynamics ultimately in the day.
Speaker B:So, so I like this move.
Speaker B:I think it's smart and I think, you know, the devil's in the details in terms of how you execute it and how you replenish it and how you buy the inventory correctly.
Speaker B:Because there are some different dynamics there to running like the day to day, you know, things you'd find in the Dollar General.
Speaker B:But net.
Speaker B:Net.
Speaker B:I think it's smart.
Speaker A:Yeah, I, I don't mean to burst your bubble.
Speaker A:All the 90s men who were in love with Kathy Ireland and women, and my brother included amongst those, he loved Kathy Ireland too.
Speaker A:But, but I don't think it has any Betsyville, any of these Betsy Johnson.
Speaker A:I don't, I don't think those brands are still relevant.
Speaker A:I think what this does, what does matter about this is that they are focusing on designing a high quality product or a, even just a high designed product.
Speaker A:I don't think it matters who the celebrity is that's attached to it because I don't think that those names have the cachet anymore that they used to back, you know, 15, 20 years ago even.
Speaker A:But I think that what we've heard both from Dollar Tree and Dollar General this week is that they are attracting a higher shopper.
Speaker A:And I think that's to your earlier point where this comes in like, yes, there is a demand for a high design quality product at a lower price point.
Speaker A:And that's why I think Dollar General and Dollar Tree here are going to really win with that higher consumer because they are investing in things like this that have smart margins behind them, like you said.
Speaker A:So I, I don't know that it's going to be that they're going to be the ones that are going to be drawing all the traffic.
Speaker B:Interesting, interesting.
Speaker B:I don't know, I kind of disagree with that a little bit because I wants to be aspirational.
Speaker B:And there probably were people that were aspiring to some of these brands back in the day when they were at their height and they couldn't afford them.
Speaker B:And now if Dollar General plays their cards right, they can make them at an affordable price.
Speaker B:And it's always just square one.
Speaker B:Right.
Speaker B:It's starting out and then it's going to evolve over time and they have to get someone to buy into this idea to begin with.
Speaker B:So, so that's why I think, you know, for the most part if you're going to take this strategy, it seems like a, seems like a good way to go about it.
