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01/14/2022

CSA Exclusive: Family Dollar drives revenue, traffic with smart ads

Dan Berthiaume
Senior Editor, Technology
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Family Dollar is leveraging AI for targeted advertising.

Family Dollar is leveraging artificial intelligence (AI) to maximize the effectiveness of its ad campaigns.

The discount retailer, which is part of Dollar Tree, has built on the success of its Chesapeake Media Group third-party digital ad network to bolster its advertising performance. In an exclusive interview with Chain Store Age, Bridget Cusick, creative director at Family Dollar, explained how the discount retailer is using AI technology to tailor its virtual circular ads to individual customers at precise moments.

“Typical methods of delivering weekly ads have grown stale and had not been reaching all our relevant audiences,” said Cusick “We wanted to see if we could improve performance with a new way of putting that content in front of shoppers.”

Having an existing partnership with personalized advertising solutions provider Aki Technologies in conjunction with its Chesapeake Media Group retail media network, Family Dollar asked Aki if it could provide assistance in targeting its weekly ads. The Chesapeake Media Group platform allows participating brands to engage with Dollar Tree’s customers in a personalized and ultra-targeted digital experience. Leveraging insight and analytics, advertisers can instantly connect with shoppers in an effort to affect purchase decisions in real-time.

“When they presented this solution to us, it was the most dynamic we had seen,” said Cusick. “We committed to a two-month test on two tracks, promoting Family Dollar’s Smart Coupons program and its weekly offerings; and promoting Family Dollar more generally, featuring weekly sales.”

Leveraging AI capabilities, Family Dollar combined and analyzed multiple data sets, including customer data and mobile signals, to gauge consumer receptivity to advertising and their mindset in each moment. The messaging in personalized virtual circular units provided via Aki technology was then tailored based on each moment.

The products and deals changed each week to align with Family Dollar’s circular catalog. This enabled Family Dollar to amplify its traditional media efforts on mobile and reach new buyers. Each ad concluded with a map showing the recipient’s closest store. In all, there were over 72,000 ad variants served 28 million times.

“The test yielded eye-popping return on ad spend (ROAS) and significantly increased average basket size, which really showed us the potential of this format,” said Cusick.

Other specific results of the pilot campaign included:

  • Generation of $4.4 million in incremental revenue and a $5.52 incremental return on ad spend. 
  • The campaign also increased buyer penetration by 3.9%, resulting in 132,000 incremental buyers and 225,000 incremental transactions.
  • The campaign made the largest impact with Family Dollar’s “New Buyers” category, with a 25% lift in buyer penetration among this group, introducing new revenue opportunities for Family Dollar.
  • Family Dollar drove 2,044,674 attributed visitors and 4,381,219 attributed visits to stores with the campaign.

“Aki will continue to be a valued partner within Chesapeake Media Group and a significant part of our diversified Family Dollar media plans,” concluded Cusick.

Dollar Tree operated 15,685 stores across 48 states and five Canadian provinces as of January 30, 2021. Stores operate under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada.  

[Read More: Dollar Tree increasing prices to $1.25 across all stores]