The situation: Dollar General, Amazon, and Walmart are on a collision course as each races to speed up rural ecommerce deliveries and win loyalty in a market ripe for growth.

Dollar General’s strategy: The discounter is leaning on third-party intermediaries to rapidly scale its delivery offerings.

• It works with both DoorDash, which covers 17,000 stores, and Uber Eats, which currently serves about 4,000 stores today but plans to reach 14,000 by the end of Q3.
• The approach has enabled it to get orders to shoppers’ doors quickly—about 75% of Dollar General’s delivery orders arrive at customer doors within an hour—which has helped it rapidly grow its ecommerce sales. Sales through DoorDash in Q2 were up more than 60% YoY.
• CEO Todd Vasos noted on the company’s earnings call that online orders often drive larger baskets as shoppers add items to offset delivery fees.

Encouraged by the results, Vasos said Dollar General will “put the pedal to the metal” to seize what he sees as a major growth opportunity. He pointed to the company’s rural footprint—80% of its stores are in small towns—as a key advantage.

Amazon’s approach: Amazon is encroaching on Dollar General’s turf with its plans to bring same- and next-day delivery to 4,000 smaller cities and rural communities by year-end.

• It is also converting rural delivery stations into hybrid hubs that both store inventory and prepare packages for final delivery, which in some areas has already cut wait times from four days to one.
• Amazon is betting that faster rural delivery will help convert more households to Prime, where its reach is still relatively limited. The program tends to be sticky: The more members use perks like streaming, prescriptions, food delivery, and free two-day shipping, the more they spend. Nonmembers, by contrast, often see their spending level off or decline.

Walmart’s role: Like Dollar General, Walmart is leaning on its vast store base as fulfillment centers to enable it to offer same-day delivery across rural regions. That positioning makes it a formidable rival to both Amazon and Dollar General.

Like Amazon, it is also pushing its membership program—Walmart+—which benefits from similar stickiness.

Our take: Dollar General, Amazon, and Walmart are pushing hard into rural ecommerce because the growth potential is too big to ignore. The retailers that can pair speed with convenience will be best positioned to lock in lasting loyalty.