Product Marketing on Demand from New View
Why I shop at Aldi and Lidl
Monday 13th January 2020
Where I live I have options. All the major retailers are within a 3 mile drive. Tesco, Asda, Waitrose, Morrison, Sainsburys, AND the discounters - Aldi, Lidl and Iceland. Oh such choice!
Plus I have 3 Tesco Locals and a small Co-Op within half a mile. -My cup runneth over 😊
Yet I choose to shop at Lidl and Aldi. Why? Price. Two examples. Cat food at Aldi is £1 cheaper than the typical offering at Morrison's. A plastic bag is 20p cheaper.
Kantar Woodpanel has revealed two-thirds of UK consumers visited one of the German discounters in the run up towards Christmas. In fact all discounters reported an increase in sales - with Aldi and Lidl ending the year with 12.8% market share (up 1.5%) and homegrown Iceland 2.3% (up 1.8%).
The big 5 have reported very different Christmas results. The mega store strategy, the multiple product lines offering variety, worked early in the late 90s and early part of the last decade - but now, for the 2020's, they need a new vision.
All the old maxims "Pile it high, sell it cheap" and "Retail is detail" have been embraced by the discounters. Carrying fewer products lines gets them bigger discounts. Flexible staff working patterns,all are generalist, able to turn their hand to any in-store job. Logistically more lines are ready to go directly to floor directly from delivery lorry. Own brand label brands enable more competitive pricing. These advantages accumulate and it's the consumer that benefits.
Huge investments have been made in technology by the "Big 5". Store cameras tracking the consumer journey through the store, even able to record consumer shelf scanning behaviour. "Smell-ology" is deployed to raise purchase desire. Who pays for that? Ultimately, us. The consumer. These companies have deployed a Scientific Approach to sales - the "discounters" a common-sense approach.
The scientific approach taken through Quantitative Analysis needs to blend with Qualitative Analysis to move forward. Looking outside of the shop floor, what's happening in the economy - the social priorities, trends and challenges? What are consumers doing? Reducing their outgoings, in the face of general economic uncertainty.
And its not as if suddenly this year there has been a shift in shopping behaviour. For a few years now loyalty to one retailer has been on the wane as shoppers go to multiple retailers for different items, motivated by price and the availability of different, new, items.
So, my message to the UK supermarket retailers is this. I am part of the largest demographic in the UK - with the largest spending power. Change the operation to reduce cost. Use common sense - to become more efficient in terms of warehouse to retail floor space logistics and listen to your employees on the shop floor. They'll tell you.
Adapt and survive. Too many retailers in the UK have gone, don't be one of them.