The Dollar Store Goes Digital

June 12, 2016, 12:00 PM UTC
Courtesy of Hollar

While retail stores are shuttering, dollar stores are still growing. But they’ve done little to innovate over the years. That’s where Hollar comes in. The startup has brought the dollar store online, and so far, they’re seeing great success – a million visitors a month and $1 million in monthly sales in April.

It turns out, the thrill of shopping at a dollar store isn’t just about physically picking through bins and store shelves looking for a gem–scrolling through endless items online is pretty fun too.

“The recession has accelerated [the dollar store] industry,” David Yeom, Hollar’s CEO told us. “Frugality is here to stay, but people want the simplicity of online ordering.”

Yeom thought a lot about how people shop at dollar stores when he made the site and app. While Amazon (AMZN) customers often come to the site with specific product in mind, dollar store shopping is usually about discoverability or a vague idea like “something fun for my kids,” Yeom told us.

Some ideas for the kids: an unamused emoji pillow ($5 on Hollar; $27.99 on Amazon) or Hollar’s best-selling Pillow Pets Dream Lites ($2 on Hollar. About $6 on Amazon.), which Hollar currently sells 1,000 of a day.

The site and app have a “Pinterest-like” interface and target the “treasure hunt aspect” of dollar store shopping, Yeom said. With the infinite scroll website design and over 20,000 products in categories like health and beauty and office, school and crafts, “you’re going to be hard press to get to the end.”

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Raised by a single mom in East LA, visiting the dollar stores with his sister “was our treat,” said Yeom. “Fast forward, I now take my kids to the dollar store. This is a business that’s very personal to me.”

Yeom and Brian Lee, his boss at the time, dreamed up Hollar while they both worked at the Honest Co., the consumer goods company co-founded by actress Jessica Alba. Yeom and Lee were both fans of dollar stores and wondered why they had never gone digital. When Yoem asked John Um, a friend and a strategist at the dollar-store chain 99 Cents Only Stores, Um speculated that this was a legacy issue and that the dollar store supply chain was built for in-person sales.

Now Um is the chief operating officer at Hollar and part of his job is wrangling the products Hollar sells and making that supply chain work online. Last week, Hollar announced they would soon begin selling their own private label products too, adding 1,000 Hollar branded items in the next six months. Lee is the executive chairman of Hollar while also holding his post as CEO of the Honest Co.

The company launched in November with a website, but the app, which launched earlier this year seems to be where people are shopping, which follows larger shopping trends.

The popularity of Hollar’s app might also have to do with who Hollar’s shoppers are. Like at brick and mortar dollar stores, the typical Hollar shoppers live in the Midwest, and their internet access can be limited to their phone.

While many startups focus on the consumers on the coasts, Yoem is excited that his company is thinking more broadly. “There’s more people beyond those places. And the way people shop in those regions is not the way they shop elsewhere,” he said.

“This really is a business for the masses.”

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