Let me get one thing straight – I do not love Aldi. However, just to confuse you, I can also say that I do not dislike Aldi either. One thing is for sure – millions of UK consumers do love Aldi, including Mrs Golding! In September 2013, Aldi reported a rise in annual revenue of 41% (bringing it to £3.4 billion), opening 34 new stores in the process. According to Edward Kantar of Worldwide Panel, Aldi and Lidl in particular are appealing increasingly to a wider range of shoppers as they diversify their offering – selling some luxury products “like champagne and prosciutto ham” as well as basic goods. So is this the real reason why Aldi is making such a charge? It may well be a contributor, but I think there are some other pretty clear reasons why Aldi is appealing to more and more consumers, and that is the subject of this blog post.
To start with, let me just remind you of the results of my independent research into ‘what customers want’, conducted in September 2013 (https://ijgolding.com/2013/11/06/what-do-customers-really-want-the-top-five-most-important-things-revealed/). The top 5 things were as follows:
Number one on the list is the first thing that Aldi excels at – value for money. Shopping at Aldi can save you money – fact! One of their well-known advertising campaigns states ‘like brands, only cheaper’. Aldi’s lower cost proposition sits perfectly in line with the current wants and needs of British consumers. If you are feeling the pinch, you need a way of tightening the belt. Aldi allows you to do that. Just because Aldi is great value, it does not mean it is cheap for everything. Savvy shoppers must always look closely at prices to ensure that they are getting good value – and most of the time that will be the case at Aldi.
Many people consider ‘cheap’ and ‘nasty’ as words that often go together. That is not the case with Aldi. Number 4 of things that customers wanted from my research was ‘quality’, and Aldi have created a formula that allows them to deliver great value products without any compromise to quality. They have done this through creating brands of their own, and ensuring that these brands are of the same if not better quality. Some consumers are very loyal to brand names – if you are, Aldi may not be for you. Yet if you are willing to give it a go, it is very unlikely that you will be disappointed.
Third on my list of ‘what customers want’ is ‘keeping promises and reliability’. Aldi succeed here as well. They have a very simple business model. Their stores are identical – always set out the same way – it does not matter which Aldi you visit, the experience will always feel the same. They are committed to saving you money on your weekly shop – this is the biggest promise of them all – and I guarantee that you will not be let down. The brand operates with typical Germanic efficiency. My wife always tells me that one of the reasons she loves Aldi is that the experience is so quick – you are ‘in and out’. It is the consistency of the offer, and the reliability of the service that makes this possible.
At this point, you might be thinking ‘are you sure you do not love Aldi? I am sure – and let me explain why. I think Aldi is great – it is great value. It has great quality products. It has that unique supermarket feature of the ever-changing product offer in the middle of the store – the one that contains sports equipment, to knitting kits, to children’s toys (I do love this bit – you never know what treasure you are going to find). Yet despite this, I would never choose Aldi as my preferred place to go and do a supermarket shop. I must admit – Aldi scares me. I always feel rushed by other shoppers who know exactly where the products are without opening their eyes – I always feel like I am in the way. Aldi does not have everything I need. Some things Aldi just do not sell – this means that it is hard to do your shop in one go. Mrs G does most of the supermarket shopping in the Golding household. She loves Aldi, but agrees that the shop must be supplemented somewhere else – she still thinks it is worth it though.
But the thing that scares me the most is the end bit – the checkout. I remember my first ever visit to an Aldi. I did not have my own bags – fail! Having purchased a couple of bags, I tried to pack them whilst the products were coming through the checkout – fail! It is amazing that I survived the experience – products were going everywhere – the checkout assistant was trying to be patient with me, but kept shaking her head. By the time the last product went into my trolley, I was shaking and covered in sweat! I then offered my credit card as payment – fail! It became clear to me that there is a certain way of shopping in Aldi – yet no-one had explained that to me. The checkout experience is unlike any of the big supermarkets in the UK. It is not intended to be so. Aldi is growing at the rate it is because many UK consumers do not care. Value and quality are seen as being more important that someone carefully packing your bags for you – that is why Aldi works.
What is great about Aldi, and why other brands could learn from them, is that Aldi are not trying to appeal to everyone. I would not choose to shop at Aldi because I do not like the ‘stress’ of the checkout experience. I am very happy for Mrs G to do so though – she quite likes the experience. Brands do not need to be all things to all men. They just need to know what their core proposition is, and focus on delivering it brilliantly. Aldi is not know for being the ‘Rolls Royce’ of customer service – they do not need to be. Their staff are very pleasant by the way! Aldi just need to keep doing what they do and they will continue to grow. More consumers will try them out, and will either love it or will ask someone else to do the shop for them!!
If you love Aldi (or not) it would be great to know if you agree?
Great post Ian. I’ve heard some less than positive things about the service in Aldi so it’s great to get a bit of balance to that.
I agree that retailers need to be true to thier brand (or any business for that matter!) and they need to recognise that they’ll never please all the people all the time. However, the counter to that, is that it’s easy to stay true to your brand when you’re riding the crest of a wave and you have all the customers you need to run your business. You can stay the same because you don’t need to change.
What usually happens is that when times get tough, retailers cast about, frantically looking for a way to fill the gap that’s been left by their customers going elsewhere.
That’s when they go off-brand and make knee-jerk decisions to copy what others do to fill that gap.
And which doesn’t work because they’re then trying to implant someone else’s brand onto their own.
So, yes, I agree – stay true to your brand. But how do you do this when the money stops rolling in?
Many thanks for taking the time to comment Helen. I do agree – it will be interesting to see if the Aldi approach changes as the customer base and the economic climate continues to change around them. This is the challenge for any brand and is what I term ‘continuous improvement’. Customers are awkward things – what we want today will be different tomorrow and the next day and the next. The skill of sustainability is constantly adapting to those needs without compromising who you are and what customers really want. Let’s see if Aldi can do it!
I don’t get that checkout arrangement at all. In some ways ALDI are rather like Wetherspoons – cheap, standardised, but you have to put up with some things you wouldn’t in other establishments. I’ve also bought some things that seem noticeably a notch down in quality from the mainstream supermarket own brands.
Very good analogy as always! That is why Aldi does not work for everyone in the same way I am very unlikely to ever visit a Wetherspoons pub. I also agree on the product quality point – Aldi are not perfect, but from experience, the majority of their products we have purchased have been of very good quality.
Hi Ian – The points you make about Aldi (clear proposition focus, customer service, keeping promises & reliability) apply equally at the other end of the grocery market with Waitrose and M&S Food. Generally, both the discount and premium players are very clear on their target customers and laser-focused on putting them right at the centre of all their business decisions.
The worst place to be at the moment is in the middle-ground as customers continue to migrate to either end of the market (just check-out the number of higher-end cars in an Aldi car-park these days … it has become fashionable to shop there).
I think there is also a point about scale and location here too. All the players at the premium and discount end of the market have there stores close to their customers (ie not out-of or edge-of town) so they are more accessible (easier). Also, as these players are still smaller than Big4 they have less internal complexity to manage … will be interesting to see how far and fast they choose to grow in future.
Completely agree Steve. These are interesting times for food retailers – all will have to adapt to the emergence of Aldi and Lidl as dominant forces, whilst the value players will have to stay on top of their game if they want to continue to grow.
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Aldi – ahead of the customer effort curve? Certainly a marmite experience!
This really made me chuckle! I totally agree – Aldi checkouts scare me too, and I went through that cringeworthy first visit with my then newborn son and experienced the same tutting and head shaking from fellow (more seasoned) customers.
I agree completely that they do get it right in so many ways, and I honestly hadn’t paid attention to the fact that they always keep the layout exactly the same. I am inclined to like them much more for this as it is a pet hate of mine!
Thanks for sharing Ian….
Many thanks Sarah – maybe they should issue ‘L-plates’ at the entrance to alert clientele and staff to the fact that a ‘Virgin Aldi Shopper’ has entered the premises!!!
Ha! That’s a great idea! And issue you with crash helmets too – those checkout assistants are fast!
Fantastic post Ian – as a marketer, I am equally baffled and amazed each time I shop there. The overall in-store experience, which I can only describe as combative, is always at odds with the delight of a good deal at the checkout.
In the UK in particular, they have had the challenge of persuading new customers to try a ‘foreign’ supermarket and cut through the noise of the Big 4’s incessant basket comparisons. Most UK shoppers are unaware that Aldi has around 10,000 stores globally (about 35% more than Tesco, and nine times the size of Sainsbury’s ) and the supply chain muscle and corporate governance that come with that.
Ultimately, the “moment of truth” for each customer will be similar: this tomato sauce (as an example) is not the brand you normally buy but 30% cheaper and tastes, well, just fine – are you in or are you out? And if you are in, try shopping during late evening for a less stressful experience.
Thank you so much for taking the time to read and respond Gunilla – and what an insightful response it is too. I completely agree with everything you say!! I must try Aldi one evening soon!!
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I love reading about the different customer experiences at Aldi, especially when the experience is in a country different than mine. I am in the USA.
I can tell you that in the US, Aldi’s main push is customer service. If you decide to shop an Aldi, and the staff is ‘seasoned’, you will find that the staff has been trained to notice new to Aldi shoppers. Once they notice them they typically will ask the generic question, Are you finding everything you need today. At that point typically the new customer (with that scared, this is like nothing I have ever experienced before look in their eye) will confess it is their first time. The employees will give tips, offer to find them boxes to ‘sack their groceries’, and sometimes give the new customer their first set of bags for free. If it is the store manager you come across, they are very likely to open a private labeled product and allow you to sample it, and if course while doing so will explain their quality guarantee and double back guarantee. In the US, although the shopping experience is very fast (especially at checkout-which if you weren’t aware, you can ask the checker to slow down and they will/should with a smile on their face) the customer service feel is ‘old country store’, where you are valued and you feel valued and typically if you return regularly the staff will learn your name.
I love Aldi. I do have to go elsewhere for some fill-in items, but typically only have to do that once per month. I love that Aldi is ever evolving and keeping up with the trends and growing, not only as far as the amount of stores they keep building, but also the new products they introduce.
I believe Aldi has an excellent strategy, and my favorite one is that EVERY SINGLE store they build is paid for in full, along with the products they have in their stores. They do not carry credit debt as so many retailers/discounters do. Their net worth is exactly what you see, so I’m proud to be an Aldi supporter, and believe they set an excellent example. (This might also factor into one of the reasons Aldi is not typically open to taking credit cards, other than the cost of the credit card transactions they would have to raise their prices to accept.) They are a ‘cash’ business and are doing their part to help people stay within their budgets and not over spend on ‘credit’.
Thank you so much for taking the time to share your experiences and thoughts about Aldi – it is much appreciated!