Cold Call How Dollar Tree Plans to Thrive Despite Breaking the Buck
Sep 30, 2025
Jill Avery, a Harvard Business School senior lecturer and branding expert, dives into Dollar Tree's bold choice to raise prices from $1 to $1.25 after 35 years. She discusses how this strategy affects customer perceptions and the challenges of maintaining value amidst inflation. Jill breaks down Dollar Tree's sourcing methods and the integration struggles with Family Dollar. Additionally, she addresses concerns about community impact and reassures that the brand can withstand the change if it continues to deliver value. A thought-provoking look at the balance between pricing and brand integrity!
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Power Of A Single-Price Promise
- Dollar Tree's core promise was that everything in the store cost $1, creating a strong, simple value proposition.
- That fixed price simplified shopping and operations, building customer delight and internal efficiency.
Simplicity Drives Shopper And Operational Value
- The $1 price point reduced shopper math and cashier work, making the shopping experience and operations frictionless.
- That simplicity created both customer ease and store cost advantages across buying and staffing.
Buying Rule: Low Cost, High Perceived Value
- Buyers needed goods with costs below $1 but with perceived value above $1, ensuring surprise and quality.
- This buying rule preserved the brand's promise while keeping merchandise appealing.