Today, October 2, 2017, I endeavored on a quick trip to ALDI in Columbia, Missouri. I spent $33 on groceries for over a week, while being in & out in under 30 minutes! No, this is not a myth. Pure fact. I AM SHOOK.
“One channel worth focusing on is deep discounters that offer value and heavy discounts.”
This is HUMONGOUS. The grocery industry is changing hastily. It is imperative for businesses in the food/grocery industry to understand the emerging trends in grocery evolution.
- Explosion of chain store in the 1920’s
- 1961: ALDI opened its 1st store in Germany (making ALDI the 1st discounter in the world)
- The 1970’s brought discounters & warehouse stores
- The primary grocery shopper is evolving. Number of men shopping is rising rapidly
- 123 million households in the USA. However, there are more shoppers than households
- Total # of supermarkets increases year over year (38,441 in 2016)
- E-commerce is growing– especially for “stock-up” & speciality items (Gen Z!!)
- Food on the connivence side is the hot spot. Example: Snack packs in a Holiday Gas Station
- “In developed markets, 80% of sales come from large supermarkets, hypermarkets and convenience stores” –Nielsen Global E-Commerce and The New Retail Report
Let’s talk ALDI
ALDI started up in Germany because the founder wished to create a “no-frills grocery shopping experience” that focused on customers first. ADLI accomplished this mission and eventually expanded across seas to the USA in 1976. ALDI grocers is headquartered in Batavia, IL with 1,600+ stores. ALDI = discount grocer
“Discount grocery chain Aldi is expected to unveil on Monday, plans to invest $5 billion to open nearly 900 stores and remodel hundreds more in the U.S.” (June 11, 2017) – Fox Business
“Small differences. Big Savings”
Why this concept gets an A+ & is COMPETITIVE:
- 90%+ of the groceries offered are Private Label ($$$ for ALDI, but cheaper for the consumer!)
- Products are researched & tested to ensure they compete with national brands on: taste, quality, and price
- Why have 12 options, when you only need 1?
- $Save Money$ in a clean, easy to navigate, quiet store with friendly, helpful employees
- ALDI is simply easy!! Oh I need pepper jack cheese? Okay, I have one option at a reduced cost. Little thought goes into the decision-making process, which decreases your in-store time.
- Fastest grocery check-out, YAY!!
- ALDI knows their customer— They have 40+ million/month
- Store Model: avoid non-essential services such as banking, pharmacies, & check cashing to increase savings (time & money)
- Currently, ALDI has a sustainable competitive advantage especially when looking at industry trends
- Like Trader Joe’s?? ALDI owns them.
Want to WIN in the evolving grocery market?
- MULTICHANNEL DISTRIBUTION. Yes, as well all know, online is a key player. However, the in-store experience cannot be forgotten because:
- The majority of consumers will continue purchasing the bulk of their groceries in the store. WIN: Find ways to optimize the in-store experience
- WHAT DRIVES SHOPPERS?
- A company can WIN through their competitive and consistent value proposition
- HOLISTIC APPROACH
- It’s crucial to make all of the experiences (in-store, online, catalog) compliment one another
- WIN: Increase consumer engagement through a holistic strategy
- KNOW YOUR CONSUMERS! Who is my target market? How old are they?
- Customers want personalization. Easy WIN: understand who you are selling to
- Tool: Database Marketing
- STAY AHEAD BY RECOGNIZING THE CHANGE IS INDUSTRY-WIDE
- “Manufacturers need to adapt their marketing, merchandising, distribution, and operations models for the new retail landscape” -Nielsen
- WIN: Effective communication and collaboration between retailers + manufacturers