23 - 24 June, 2020
Queen Elizabeth II Conference Centre, London
Here's How Aldi and Lidl are Taking Their Discounts Digital
brought to you by WBR Insights
Aldi was founded by Karl and Theo Albrecht when they took over their mother's grocery business in 1946. The brothers had a unique model which involved subtracting the legal maximum rebate of 3% before sale and saving money by not advertising or selling fresh produce. In 1960, the two brothers parted ways, creating Aldi Nord and Aldi Sud as separate companies.
Lidl was founded by Josef Schwarz when he became a partner in fruit wholesaler Sudfruchte Grosshandel Lidl & Co. in 1930. The company was destroyed during WWII, but was resurrected in the seventies with Schwarz's son Dieter and was named Lidl after the painter Ludwig Lidl.
Ever since the two discount supermarket brands came to the UK they have been causing traditional supermarkets such as Sainsbury, Tesco, and Asda, to rethink their strategies. With even well-off customers not turning their noses up at Aldi and Lidl's bargains, the two brands have gone from strength to strength.
Aldi's Digital Grocery Strategy
The problem these two supermarket brands have sometimes had is that they are often viewed as outsiders, rather than bona fide mainstream supermarkets. While this reputation does proffer some advantages and indeed appeals to many thousands of consumers, it also puts some would-be customers off - such as those who demand recognisable brands.
One way to combat this is to extend the discount grocery strategy online, and, starting with its selection of wine and then extending to other non-food products, this is exactly what Aldi decided to do.
"Our launch online is another exciting chapter in our story and will enable us to introduce the Aldi brand and some of our bestselling, best-quality and best-value products to thousands more customers across the UK," said Matthew Barnes, Chief Executive of Aldi in the UK and Ireland. "Wine is a hero product at Aldi and its higher average transaction price and decent margins mean this will be profitable, so the move makes sense."
The decision that Aldi took not to offer delivery of food items was a brave one. But, through ensuring people come to a store to collect their online orders, it does give the retailer a way of accessing new customers without the additional hassle and cost of extra equipment - such as freezer-equipped delivery vehicles - allowing it to maintain its heavily discounted prices.
Lidl's Digital Grocery Strategy
Lidl's method of moving into the digital marketplace takes a slightly more innovative approach than Aldi - though it does have a similar focus.
Its recently-launched chatbot - named Margot - has been designed to advise Lidl customers on the best choice of wine. Customers can tell the digital sommelier what they're having for dinner, and the bot will suggest the best wine to accompany the dish. For example, tell Margot you're having a chicken tikka masala and it may recommend a nice fresh Chardonnay -and it isn't embarrassed to suggest investing a little more money for a special occasion.
(Image source: telegraph.co.uk)
Aside from the wine and food pairing feature, Margot can also provide a guide to the fine wine range at Lidl, frequently asked wine-related questions, and a wine quiz where would-be connoisseurs can test their knowledge.
Buying wine can be a daunting process for many people, and, while there is a certain amount of pretention around the subject, there is a right way and a wrong way to go about using everyone's favourite grape juice. Thankfully, with Margot in their pockets, Lidl customers can sidestep some of the esotericism of wine and start expanding their knowledge and their palates.
Alex Murray, Director of Ecommerce at Lidl UK, said, "Lidl has built a reputation for providing fantastic quality wines at highly competitive prices for our customers, and this functionality will ensure that choosing the right wine is never a daunting process."
It's clear that Aldi and Lidl are taking their foray into the digital marketplace seriously (when it comes to wine, anyway) with a distinct grocery strategy in place for each.
The final word goes to Director of Ecommerce at Lidl UK, Alex Murray.
"We hope this service - along with the existing in-store and online information we already provide - encourages customers to discover the perfect wine from our curated range."
You can hear Lidl's UK Director of Ecommerce, Alex Murray, speak at eTail Europe 2018 this June at the Queen Elizabeth II Conference Centre, London.
Download the agenda today for more insights and information.