Aldi has flourished in the UK in recent years. Sales continue to grow, up 18% in the latest three months from Kantar. And while a busy store opening programme has undoubtedly helped, Aldi (and Lidl) has strengthened its offer to shoppers and this has had a huge impact on the UK market.
That much everyone knows. But how is Aldi doing it and what can it teach us?
First, it has a clear and consistent proposition. Ask pretty much anyone familiar with Aldi what it does, and you will get a similar answer. “It offers great value for money, and actually the quality’s surprisingly decent”. People know this because Aldi talks consistently and it walks the talk consistently. On value for money, it talks with ‘Swap & Save’ (side-by-side comparison with brand leaders). It walks the talk by delivering great prices via a low cost model. On quality, it talks about third-party quality awards. It delivers by setting challenging product specs across the range and, recently, by increasing its focus on the Specially Selected premium range.
Second, it sticks with what works. Once it finds something good, it resists the temptation to meddle. Most Aldi stores look the same, with the same shape and flow. It knows the configuration is a proven winner. And Aldi initiatives stay the same, as long as they are working. Super 6 is an example - six items of fruit & veg at one low price, week in, week out. More recently, a further six items in meat & fish. Shoppers like Super 6. It has been a major factor in Aldi’s success, and a headache for its competitors. So Aldi keeps doing it. It doesn’t get bored. It doesn’t try to be fancy. It doesn’t mess with the formula.
Thirdly, it gives reasons to visit soon, which is a lot more effective than giving reasons to visit sometime. Every Thursday and Sunday, new Specialbuys arrive in store. Lines that are not normally available, here on a ‘once they’re gone, they’re gone’ basis. Normally they are seasonally relevant - as I write, the theme is gardening. Specialbuys play on the scarcity principle (the psychological impulse to covet the rare, for fear of missing out) and can attract significant store traffic on launch days. They are a reason to visit soon. Aldi makes sure to tell shoppers about upcoming promotions via leaflets and its app. This is such a simple and efficient way of encouraging next week’s shop, that I find it hard to understand why other grocers don’t invest more into it.
So these are three things we can learn from Aldi. The power of a clear proposition, reinforced consistently. Sticking with what works. Giving reasons to visit soon rather than reasons to visit sometime. Simple things, but when applied with discipline, they make a big difference.
Jeremy Garlick is a partner of Insight Traction