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Cramer: The secret to being a successful American retailer

Cramer: American shoppers have changed—the secret to success in retail

As many U.S. retailers struggle to keep up with a changing consumer these days, Jim Cramer has cracked the code for success.

"You have to understand, this country has changed. Americans want off-price retailers to give them high quality branded apparel at everyday low prices," the "Mad Money" host said.

Cramer was inspired when he went to TJ Maxx on Monday and found the exact item he wanted at a very cheap price. He was able to buy his item and walk out of the store in six minutes. He was impressed by both the low prices and the convenience of the experience.

That is the secret to being a successful retailer in this environment, and it is the secret to picking retail stocks, too.
Jim Cramer
Jason Alden | Bloomberg | Getty Images

Shopping center REIT Federal Realty Trust CEO Don Wood echoed the same sentiment when he spoke to Cramer on Friday, which explains why the stock has remained so strong among a weak category.

"People want to live in a convenient place, work in a convenient place, be able to not be involved in lots of traffic. They want to be able to experience life … the bottom line is that level of convenience and that level of service means we all have to bring up our game," Wood said.

The new American consumer wants shopping to be a convenient and cheap experience. Morgan Stanley raised its price target for Dollar General on Monday with the advice to buy the stock ahead of the company's quarter. Channel checks revealed that Dollar General has the right merchandise for both males and millennials.

"I like the dollar stores for their prices … That's the attitude of the modern consumer. We are not willing to pay up for things when we shouldn't have to," Cramer said.

This is the reason why many department stores like Macy's, Kohl's and Nordstrom are hurting, Cramer said. Bargain basement players have snuck up even under Amazon, and can provide what the consumer wants right now.

"That is the secret to being a successful retailer in this environment, and it is the secret to picking retail stocks, too," Cramer said.

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