Sir, In recent weeks, leading figures in the grocery world have been debating the future of Lidl and Aldi. Some have claimed consumers are already trading up from the discounters. Others believe bargain-hunting consumers are here to stay, and further growth could be driven by opening more stores.
Our brand commerce model suggests there are four key sales triggers discounters could employ that would drive sales without further store expansions. The leading discounters have already used the tactic of offering a fantastic product as a headline, using the ‘one key thing’ trigger, to entice new shoppers (ie lobster and Champagne). Once established, they can easily expand their efforts beyond the headline offers using ‘better than average’, the second key sales trigger, to stop shoppers just visiting the discounters sporadically.
Next up is ‘the obvious truth’. If shoppers come to your store for cheap products you must remind them that this comes at a cost of fewer service staff. Finally, and the most important, is the ‘brand budgeting’ trigger. We all have mental accounts of what we can afford to spend on groceries, going out, material goods etc. Conveying the benefits of shopping at the discounters could be as simple as the fact that it gives you more money to spend on other things!
Andrew Watts, founding partner, KHWS