Over recent weeks Aldi Nord in Poland has been significantly boosting its marketing efforts. New outdoor promotional billboards, banners at the store entrance, changes to promotional leaflets as well as refreshed in-store signage for its special promotional assortment all give the impression that Aldi’s communication efforts have made an evolutionary leap forwards.
At the same time, LZ Retailytics analysis shows that an Aldi test store in Poland has enlarged its standard SKU count by more than 50% over the past two years, from over 1,000 items in summer 2015 to currently almost 1,600. Considering that both numbers must be increased by 40% for product differentiations by flavour etc, the initial gap in assortment to Lidl and Biedronka is closing.
In comparison to its other discount peers, Aldi has been handling its marketing communication with elegant reserve, convinced that its long-standing minimalist strategy would be sufficient to generate customer loyalty. But those times are over. Aldi has recognised that it must follow the market to keep pace with its much larger channel peers. In a price-driven but increasingly quality-oriented market environment the retailer is following the supermarketisation trend.
By listing more supplier brands the discount veteran exposes itself to heightened price transparency, now competing on an equal and comparable basis against all other market players. As a result, it is increasingly the case that a newly listed branded item can be more expensive at Aldi than at a competitor operating a simultaneous brand promotion. Seeing Ariel’s washing capsules (22 pcs) for PLN 28.99 as a novelty on the discounter’s shelf only to find the bigger package size of 32 pcs. for the same price in a competitor leaflet, does not help price image.
Taking the bull by the horns, Aldi is now stepping up its game on every level. Leaflets have been restyled and are now called ‘Aldi Hity Tygodnia’ (‘Aldi Hits of the Week’) with the last page ‘Nowość!’ (‘Novelties!’) primarily reserved for supplier brands. Promotions in-store are presented in a specially designated area marked ‘Super Cena’ (‘Super Price’), enhanced with appropriate signage; and the non food section now features a ‘Wyprzedaż’ (‘Sales Reductions’) zone. Also from the outside changes are clearly visible, with exterior walls featuring promotional as well as image billboards.
How will Aldi fare? In comparison to Biedronka and Lidl, the retailer does not yet have a clearly defined image. Biedronka is considered as Polish due to its high share of national brands and incessant marketing efforts, but Lidl is closing the gap with its traditional cuisine campaign. Aldi is German. Biedronka and Lidl are taking advantage of the ‘Family 500’ social reforms, adjusting assortment and discounts for young families with several children. Aldi appears to have not directly targeted this consumer segment yet. Lidl emphasizes its health-orientation with fat-reduced, free-from and organic assortment and with its sports textile brand ‘Crivit’. Biedronka introduced ‘Seven for 7’ as response. Aldi is now taking its first steps in this direction with its current billboard ‘Odkryj Bio produkty Aldi’ (‘Discover Aldi’s Bio products’) and a time-limited ‘Strefa Zdrowia’ (‘Health zone’). The two market leaders regularly drive themed country promotions, Aldi – so far stuck with American weeks based on its Trader Joe’s assortment – is now exploring Asian cuisine weeks.
Aldi is only starting. But with broad international experience and a store count of 10,000 it might be learning fast.