Target is coming straight for Dollar General with $2 toiletries

  • Target is launching a new, low-cost private-label brand on October 14. Known as Smartly, the 70-piece collection will offer deals on toiletries and essentials such as hand soap, razors, and household cleaning products. 
  • Items cost between $0.59 and $11.99, with most under $2.
  • The new collection allows Target to better compete with dollar stores, especially Dollar General, which is expanding at a rapid rate. 

As dollar stores ramp up their expansion in the United States, Target has a new strategy to woo back budget shoppers. 

On October 14, it's launching a new private-label collection of low-cost essentials including everything from hand soap and cleaning products to paper plates and razors. 

The items cost between $0.59 and $11.99, with most under $2. The line, called Smartly, will be available online and in stores. 

"The introduction of Smartly is another example of how we are listening to consumers and bringing them solutions to make their lives easier," Mark Tritton, executive vice president and chief merchandising officer at Target, said in a press release on Monday. "Smartly offers incredible value, looks great and most importantly, gets the job done. It broadens our assortment to give guests even more options to find the product that's right for them, regardless of their budget."

RELATED: Check out the retailers with the best return policies: 

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Retailers with extremely generous return policies
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Retailers with extremely generous return policies

Costco

Costco has one of the most generous return policies of any store. Any product can be returned to Costco warehouses for any reason. The only restrictions are on electronics, which must be returned within 90 days.

(REUTERS/Molly Riley)

Ikea

Ikea gives customers a 365-day return window for a full refund unless the product in question is a mattress, which can only be exchanged once.

Given that a year is a long time to hold onto a receipt, the store can also help you out by searching for an order using your credit- or debit-card number.

(REUTERS/Max Rossi)

L.L.Bean

L.L.Bean previously offered an almost unbelievably generous return policy - customers could bring back any items bought at L.L.Bean if they felt it didn't live up to their expectations. The guarantee covered the item's full lifetime.

In February, the store reduced the return window to one year, which is still considerably better than a lot of stores.

(Photo by John Greim/LightRocket via Getty Images)

REI

REI also used to offer a no-questions-asked return policy where customers could return used items for cash. The return window has now been reduced to one year, but customers are still able to trial the products during that time.

Outdoor products have to be returned within 90 days.

(Getty)

Casper

Mattress startup Casper offers a 100-day window to trial its mattresses. The best part of the return policy is that it imposes no hassle on the customer. The company will come and collect the product from your home and donate it to a charity.

(Photo by Rachel Murray/Getty Images for Casper Sleep Inc.)

Athleta

Athleta has its own return policy that far outshines its sister companies Gap and Old Navy.

Customers here are given the chance to work out in products, and if they don't like them, they can return them anytime after.

(Photo by Mike Pont/WireImage)

Trader Joe's

Trader Joe's will give a full refund on its private-label products.

"If a customer purchases a product and is dissatisfied with the purchase, we encourage them to return the product to the store in exchange for a full refund," a spokesperson for the company told Business Insider.

(Getty)

Nordstrom

Nordstrom doesn't have a return policy, per se. Each return is settled on a case-by-case basis, and there are no time limits on when you can return a product.

(REUTERS/Rick Wilking)

Kohl's

Kohl's will take back any item at any time. Customers can make returns in-store or via mail. If you lose the receipt but paid with a store card or credit card, they can look up your order directly.

(Getty)

CVS beauty products

CVS will take back any beauty product purchase, even if it's opened, no questions asked. It has the same policy in place for CVS/pharmacy brand products.

(Getty)

Anthropologie

"All merchandise — with the exception of Unlimited Furniture Delivery items — may be returned at any time by mail or to our stores in the US and Canada," the retailer writes online.

Anthropologie's furniture has to be returned within 30 days of the date of delivery.

(Photo by: Jeffrey Greenberg/UIG via Getty Images)

Eddie Bauer

Eddie Bauer is so confident that customers will be pleased with its products, that it offers anunconditional lifetime return policy.

The concept was created by its founder many years ago and has stuck to this day.

(REUTERS/Fred Prouser/File)

Bed Bath & Beyond

Provided it's within a year, you don't even need a receipt to return products at Bed Bath & Beyond. The store will track down your item using credit-card details or order numbers.

(REUTERS/Lucas Jackson)

Zappos

Online shoe store Zappos gives its customers plenty of time to make a decision. Its return policy allows customers to get a full refund within 365 days, providing the product has not been worn and is still in its original packaging.

(Getty)

Sephora

To prevent customers from draining a tube of foundation in a month and then trying to return it in-store, Sephora stipulates that returns must be in "new or gently used condition."

You can get a full refund on your card if you return the item within 60 days, and if it reaches up to 90 days, then you can get a refund in store credit.

(Getty)

Land's End

Land's End's return policy is as good as it gets. You can return any item at any time, provided you have the receipt.

(Photo by Tim Boyle/Getty Images)

Macy's

Macy's has toughened up its return policy recently. What was a 365-day return window has been cut down to 180 days, which still gives customers ample time to get a refund if they so choose.

There's one exception to the rule: the department store does not allow customers to return products from its "Last Act" clearance sections beyond 30 days.

(Getty)

Bath & Body Works

Bath & Body Works has a 100% satisfaction guarantee.

"We just want you to love it," the company writes on Facebook. You can return or exchange any of its products at any time.

(Photo by Roberto Machado Noa/LightRocket via Getty Images)

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Target has doubled down on its private-label assortment in the past few years, rolling out more than 20 brands and exclusive partnerships.

These brands are a way to differentiate Target and boost profit margins while still offering customers affordable prices. Plus, they are a big asset in driving traffic to stores, and given that they are cheaper than other well-known brands, customers are likely to buy more. Private label now makes up around one-third of Target's total sales, according to Morningstar.

The Smartly collection is a way for Target to better compete with dollar stores, which are expanding in the US at a rapid rate. Dollar General, one of the largest dollar-store chains in the US, is on a path to dominating this market. In 2017, it opened new locations at a rate of around four stores a day. 900 more stores are slated to open in 2018, at a rate of about three stores a day.

While competitors have been squeezed by growing competition online and from Amazon, the dollar-store sector has flourished, swooping in and offering customers prices that are 20-40% lower than grocery and drug stores. 

Sales at US dollar stores grew to $45.3 billion from $30.4 billion between 2010 and 2015. Moody's said it expects this market to grow 8% in 2018, which is about double the growth of what is expected for US retail in general during the same period.

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