Supermarket shoppers pay to look at 20 different lines but they only buy one, says Paul Foley, who heads Aldi in the UK. Unlike the big four grocers, his approach is to stock only one type of baked bean. By doing so he can deliver better quality at a lower price. Aldi delivers two benefits to its shoppers, says Foley. First, they save time as they do not have to select products from displays cluttered with brands they don't want. Second, they understand the value proposition and are not taken in by the "cheapest-on-display" measures used by his competitors. Thrifty shoppers from all income levels are visiting Aldi, he says. When the recession is over, they may stay. However, thrifty shoppers from all income levels have always been looking for a bargain. In the 1970s my mother ganged up with her friends and took it in turns to shop at the wholesale markets for fruit and vegetables, meat and fish. The bigger obstacle to the Aldi approach may be that it is impossible to get the one product right for all people. While shoppers may like their beans, they may not like their pasta? The proposition of one-size-fits-all is easy to understand and difficult to execute. Nimble independent retailers should be able to find a way to compete.
We are launching the 2009 Independent Achievers Academy tomorrow in London with a group of retailers and suppliers. The marketing team have come up with a great practical exercise to help us relive the Academy experience. At its heart, the IAA has a simple concept: set a goal, plan to hit it and celebrate the outcome. I hope to learn lots from participants and will pass this learning on to you.
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