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Beating Competition By Meeting Customer Demands: Aldi’s New Inspiration

May 27, 2015

Beating Competition By Meeting Customer Demands: Aldi’s New Inspiration

There is a growing need to produce excitement and inspiration, regardless of brand, industry or market. Consumers are constantly demanding more from their stores, and stores are under increasing pressure just to keep up. In this climate, it is no longer enough for a brand to merely offer the “industry-standard”, B+ kind of service you’d find just about anywhere – consumers will go elsewhere. Instead, brands need to innovate, captivate and most importantly cultivate consumers.

One such brand that has risen to the challenge, Aldi, has been discussed and debated at length as of late. The “budget superstore” has been a massive success during the recession and with the subsequent rise of the modern “savvy shopper”. Known for its cheap deals and competitive products, the last decade or so has seen the Aldi brand grow in its European homeland and beyond. As a young English student living in one of the most expensive and “high-quality-of-life” cities in the world (Melbourne), I was delighted to find an Aldi less than 30 seconds from where I was living …in a completely different country on the other side of the globe. It turns out its success in Europe has translated well here Down Under and Aldi has become an Aussie staple (just like it has done across a host of other countries).

So with international success in the bag, why not rest on its laurels? Well, to keep up with those pesky customer demands I mentioned earlier, Aldi has decided to unveil a bold new strategy: the “Inspirational/posh/Uptown-Girl” Aldi. The company is introducing new-look, upmarket stores with in-store bakeries, fresher produce and more recognised (and premium) brands. However the key to “Project Fresh” (the campaign’s working title) is that it will still have the budget pricing that has made Aldi so popular in the first place.

By focusing on the consumer demands of price and quality whilst simultaneously offering a more “premium” experience, Aldi will put even more pressure on its competition (Australian grocery giants, Coles and Woolworths). With Woolworths admitting that their shoppers viewed the quality of Aldi’s private label brands to be on par or better than their own, there is more urgency than ever for Aldi competitors to up their game.

Without resorting to some bold new innovation of their own, the only way Coles and Woolworths can respond is to reduce prices, and this would only serve to help Aldi further. In fact, Woolworths have recently announced plans to slash the prices of private-label grocery brands, a move which may cost them as much as one billion dollars.

And the bad news for competitors doesn’t stop there. The 4 trial stores with Aldi’s new theme have already seen a rise in sales and customer footfall. This success could be attributed to Aldi’s expert targeting of the “middle” market (e.g. adding more recognizable brands, a more modern store aesthetic, etc.). According to Nielsen’s 2014 Homescan report, only 30% of Aldi customers are “low income shoppers”. The remaining 70% are from middle or high incomes households. So with an active ear to their consumer base, these findings could be why Aldi has taken such a risky (albeit successful) foray into a completely range new range of stores, products and brands.

And the risk seems to be paying off. Thanks to the initial success of the campaign, Aldi is currently looking at rolling out these changes in all of its stores. Should this happen, then Aldi will once again have hit the proverbial nail on the proverbial head for what consumers are demanding, and force competitors to adapt to it, rather than the other way around. By offering a new intuitive experience for the customer, they stand to gain even more of a market share – effectively dis-locating consumers from their rivals  and pushing their brand forward in the process.

 


An office divided: the following blog was written around the same time as our previous blog post (Beating Competition By Meeting Customer Demands: Aldi’s New Inspiration) by a different BrandHook author. It presents an extremely different (and contrary) point of view on Aldi’s new approach – which side of the Aldi fence are you on?  Since I arrived Continue reading

The following is a recent interview from Teradata.com with BrandHook’s very own Founding Partner Pip Stocks, in preparation for her upcoming presentation at the Teradata Connect Conference (9th/10th June). For more information on the conference or to book tickets, please visit http://marketing.teradata.com/connect/   Today we have Pip Stocks, CEO & Founder of BrandHook, as an interview partner. Continue reading

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