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| As the supermarket price wars continue, the consumer is winning and the traditional big 4 are losing out. |
After the recent news on Tuesday that Tesco had issued its fourth profit warning in a year and lowered trading profit expectations by £1bn, an article in the Financial Times asked: What has gone wrong at Tesco? And they aren't the only ones asking the questions.
I don't know many people that claim to love food shopping. Right there,
with a lack of love, it's going to be hard to create a premium.
In the UK food is treated by the masses as a non precious commodity - it's
seen as a 'right to have'. Therefore largely, it's perceived value has been
lowered. Supermarket discounters such as Aldi and Lidl have realised this and
delivered what the consumer wants. Unless you're a massive foodie with a high
interest and likely higher value perception of food, the chances are you'll be
tempted by the lower prices that the discounters offer.
Tesco and the like can win again but building soured / broken consumer
relationships takes time and effort. To get back on track, traditional
supermarkets will have to offer price and great user experience which delights
and inspires.
And they better be quick. Aldi are already making stores bigger and better,
making the weeks shopping less painful financially and enhancing in-store
experience. To really win, traditional supermarket brands must do all this more
effectively and show that they are helping to make the world a better place -
all at the same time.
We know that technology changes markets and abundance drives down market
value. Tesco and the like can hide behind stats but simply, savvy, switched on
consumers are voting with their feet and they are saying that Aldi broccoli at
49 pence tastes just as good as the rest. This consumer movement would also
suggest that the other discounted items all either taste great or they do the
same thing.
You can see why the discounters are winning. But there is something else
that I've noticed that is giving Aldi an unseen edge...
Having visited Aldi, Morrisons, ASDA and Tesco recently, in my area all the
staff are all quite friendly. However, the staff in Aldi have an irresistible
edge. Why? I think part of the reason is due to a united team spirit and also
because they are winning as a business - it creates a feel good factor.
I've said this before; humans do business and we react to this. We don't
often rationalise it, but subconsciously we can feel it: it's authentic, rubs
off on us and if it's good, we feel good.
You can't buy this feeling but you can experience it and the Aldi staff are
creating it. This is a huge part of internal brand communication. When it's done
authentically, it becomes irresistible. It's viewed entirely differently by
consumers who long ago have become deaf to the standard corporate
auto-cue.
To fix a problem, first you have to recognise it. It's nearly always the small
businesses and entrepreneurs that notice these market opportunities whilst the
corporate giants sit pretending that nothing is happening. For savvy SME's it
could be time for some 'Branding from the Edge'. Learn more >
Simon Bell
Director
