Racked is no longer publishing. Thank you to everyone who read our work over the years. The archives will remain available here; for new stories, head over to Vox.com, where our staff is covering consumer culture for The Goods by Vox. You can also see what we’re up to by signing up here.
Hollar boasts a shopping app and cheery website whose homepage looks a bit like Pinterest, with a series of "cards" featuring the site’s best sellers arranged on the page. Most things on the site are priced from $2 to $5, though there are some bundled items that go for up to $20. The categories, like seasonal items, toys, and beauty, will be familiar to any dollar store shopper. The selection is not quite as large as what you’d find in a brick-and-mortar dollar store, but it still carries over 20,000 items. It’s more strategically curated than traditional dollar stores to appeal to younger shoppers – specifically, millennial moms.
As the former vice president of marketing for Jessica Alba’s Honest Company, it’s a demographic David Yeom, 40, the co-founder and CEO of Hollar, is familiar with. Hollar’s director of merchandising, Michelle Andino, 31, is the self-described living embodiment of the millennial mom that the company hopes to reach.
"When you’re [shopping] a one-stop like Target, you’re grabbing everything from toys to beauty to apparel," Andino says. "[We’re trying to make] Hollar the go-to spot to buy across multiple different categories and to have that guiltless buying, to grab something for mom that’s under $5 as well as buying some toys for the kids."
Hollar currently has over one million visitors coming to the site every month. Yeom notes that over 80% of Hollar’s customers are women, and most of those are millennials, moms, or both. More than 80% of customers are ordering from places other than New York and California, and most Hollar customers shop on their phones via the app. "Timing was on our side," says Yeom. "This is a business you couldn’t have done five years ago. Mobile is ubiquitous." Hollar is doing over $1million in sales per month, and that’s been growing 50% month-over-month, according to the company.
Yes, millennials love dollar stores. In its last earnings call, according to a CNBC report, Dollar General said that 24% of its sales were thanks to twentysomething women.
Brick-and-mortar dollar stores are killing it right now in retail. In June of this year, Dollar Tree and Dollar General both hit all-time stock highs. Neil Saunders, the CEO of retail research agency Conlumino, notes that consistently low prices are obviously the biggest draw. "Some of the other stores like Target or Wal-mart, although they do have low prices, they have more expensive products as well. It can be more tempting for consumers to buy something more premium," he says. "When they get to the registers it ends up costing quite a lot. It’s difficult to do that at dollar stores. It sort of keeps a lid on the amount we spend and puts temptation out of the way."
And yes, millennials love dollar stores. In its last earnings call, according to a CNBC report, Dollar General said that 24% of its sales were thanks to twentysomething women.
None of the big dollar store players, however, have robust, or, in some cases, any, e-commerce presence at all. Dollar Tree, which acquired Family Dollar in June 2015, sells everything for $1 in stores, but only sells items by the case on its site. Family Dollar and 99 Cents Only stores don’t offer e-commerce at all. Saunders said that dollar stores have small profit margins and rely on selling lots of items. The logistical issues of packing, shipping, and warehousing could potentially cut into profits, which could explain why traditional dollar stores haven’t fully committed to digital.
Dollar General does have a website, but it’s visually cluttered and not very inviting. A representative for the company said via email, "Although we have nearly 13,000 retail locations in 43 states, [e-commerce] allows us to serve communities where we currently don’t have stores nearby. The e-commerce site has been a positive retail venture for the company, reaching new and existing customers." The company doesn’t break out financial results for online sales.
Discovery and spontaneity are hallmarks of dollar store shopping, and it’s an intangible that seems difficult to replicate online. Hollar aims to do so via its app and homepage. Its algorithm will suggest things you might like, but Yeom is optimistic. "Online is more conducive to that treasure hunt experience, because everything is at the flick of your wrist and you’re scrolling endlessly," he says.
Hollar requires a $10 minimum purchase, and offers free shipping (normally $4.95) for orders over $25. Saunders sees this as a potential negative for the site. "That’s actually quite a lot," he says. "Most people that go into dollar stores probably don’t spend $25." It doesn’t seem to be a barrier so far, though. Yeom says the average order on Hollar is ten items. The site’s biggest order to date was 300 items that cost a total of $960.
Beauty-turned-lifestyle blogger Christy (StilaKiss33), 36 and a mom of a two-year-old, has ordered from Hollar at least five times. She hasn’t had a problem meeting the $25 threshold for free shipping. "I get stuff to save in the gift closet!" she laughs.
Currently, toys are the best selling category on Hollar, and its $2 Pillow Pets have dominated sales. Hollar has sold over 100,000 of them so far. According to Yeom and Andino, beauty and apparel are the next most popular category, and the company has been ramping up its offerings in both of those areas.
In most dollar stores, you can usually find inexpensive beauty brands like LA Colors and Wet-n-Wild. Hollar carries similar lines like NYC New York Color and LA Girl, but you can also find brand name staples like Essie, OPI, Revlon, Goody, and L’Oreal there. Many of the products are either overstocks or from a few seasons ago, but the colors don’t skew too trendy. There are plenty of neutrals and classic colors available.
"Right now we’re currently doing a huge beauty focus," Andino says.
Beauty is a growth area for Hollar. "Right now we’re currently doing a huge beauty focus," Andino says. "We recently just came back from China and Korea. While we were in Korea we just stopped by to do some trend research there."
As a result of that trip, you can now find Korean beauty cult favorite brand TonyMoly sheet masks for $2 each on the site, which Sephora currently sells bundled as two for $7.50 and Ulta sells for $3.75 each. There are also more expensive TonyMoly bundles, like hand cream and lip balm for $18.
Clothing has always been a trickier sell at dollar stores due to quality, but Hollar claims interest is robust. Andino says that whenever the site offers activewear it sells out quickly. Currently, there are dresses on sale there for $5 and bikini tops for $2. Kids’ apparel also does well on the site, and Hollar tries to stock licensed and recognizable character gear. At various times, it’s carried Minecraft graphic t-shirts and Mickey Mouse tops.
Lifestyle vlogger Ann, 42, who has a YouTube channel called SeeAnnSave and who published an unsponsored early haul video featuring Hollar, is generally wary of buying clothes at dollar stores. She says that she saw Rampage items on Hollar recently for $3 to $5 and might considering purchasing clothes in the future. "The only clothing items I've ever purchased at Dollar Tree have been fleece gloves. The clothing quality at dollar stores tends to be quite poor, but I will be keeping an eye on Hollar to see what pops up from them," she says. "As with any dollar store shopping, I stick to recognizable name brands."
Hollar is also launching its own Hollar-branded items (phone covers are offered on the site now) in the next several months, because it allows for control of quality as well as higher profit margins. As customers learn more about Hollar as a brand, the gamble is that they’ll more likely trust a Hollar-branded product over an item from a no-name brand they’ve never heard of.
Saunders cites these quality concerns as one of the potential drawbacks to an online dollar store business model. "In stores, you can check out the product. That automatically allays the fear that it’s low price because it’s cheap quality," he says, acknowledging it’s an issue with all online shopping, not just Hollar.
Christy actually had this issue with Hollar. She purchased a set of suction cup hooks which were rusted upon arrival. She says Hollar replaced it, refunded her money, and gave her a $2 credit. She was happy with the customer service.
Hollar didn’t reach out to vloggers, instead counting on "organic" engagement from them.
Bloggers and influencers like Christy and Ann are slowly becoming a bigger part of Hollar’s story, as would be expected for an online entity that’s biggest customer base is millennials. In the beginning, Hollar didn’t reach out to vloggers, instead counting on "organic" engagement from them. Christy first heard about Hollar from an Instagram commenter on her page and later posted a haul video of her first purchase. Ann says she saw a sponsored ad for the site pop up in her social media feeds and was intrigued and checked out the site. Both have become regular Hollar shoppers.
Hollar offers a referral program, wherein if you refer a friend, the friend gets $2 off their first visit and the referrer gets a $2 credit for each referral. Bloggers are starting to use the link to earn credits via readers. "Once you order, you get a referral link to share online, and the $2 credits can add up nicely," Ann says. "Over the Fourth of July weekend, Hollar sent me a 20% off discount link and I had $16 in referral credits," which she used to make another purchase.
With the back-to-school season starting, Hollar has invested in some formal relationships with lifestlye and mommy bloggers like On Tap for Today and The Chic Mamas, featuring them on the site and various social media pages with their children. But these relationships aren’t yet at the six figure levels that some fashion and beauty bloggers are with brands.
"Some of our influencer collaborations are paid with a small monetary amount and site credits. We're a dollar site, so we're not talking large volumes," a Hollar representative said via email. "As a startup, this is a part – albeit a small one – of our marketing strategy and we can't disclose specifics of contracts with each influencer. Overall, we're looking for interesting people who love our product and want to work as a partner to help tell the world about their experience."
The strategy seems to be working. A search for "Hollar" on YouTube yields 40,000 results. It is notably higher than it had been two months ago, and Hollar currently has almost 96,000 Facebook followers.
Hollar, which is not yet profitable, is hoping its bright orange boxes and fun aesthetic bring a new coolness to dollar store shopping. It seems to be working, at least for now.