Knowledge Bank Blog, Channel Execution

The Rise of the Discounters Part 2

Breaking through the trust barrier.

The Discounter Blog we shared two weeks ago triggered a lot of interest. Given that, and given it is such a hot topic in the UK market, we thought we’d give you one more…

Over 50% of UK shoppers have shopped in a Discounter in the last 12 weeks.  Five years ago many shoppers would never consider entering a Discounter.  Now, not only is it acceptable to do so, it is actually seen as a good choice.

We think a key reason for this is Trust.  Discounters have always had low prices.  That was never in doubt.  What was in doubt, was product quality.  Over the last few years, Aldi in particular have been masters at building, then reinforcing, trust in product quality.  This has been crucial as they move from attracting shoppers who had to shop there, to attracting shoppers who want to shop there.

So what have they specifically been doing to build trust?

Firstly, they have been brilliant at utilising awards and endorsements from credible, authoritative sources.  What other people say about your product is usually much more effective than what you say.  Aldi and Lidl know this and play to it better than anyone else.  Linked to this, they have been great at exploiting big stories.  When Aldi & Lidl’s mince pies beat Fortnum & Mason’s mince pies in a taste test, it was like a free gift to them.  These stories have a disproportionate impact on shopper perception.  The element of surprise is memorable.

They have significantly up-weighted their provenance and sourcing messages.  Lots of emphasis has been put on elements such as ‘100% British’, Red Tractor, ‘traceable to farm of origin’ etc.  This is very consistently communicated across product, POS and website.

They have been great at reinforcing the visual cues that shoppers implicitly associate with quality in categories.  For instance, the black tray in sausages or the silver and black for premium biscuits.  In fresh categories, the packaging is often used to showcase the product and make it very visible.  The more of the product you show, the more you suggest you have nothing to hide.

Finally, they have taken the brand leader as their quality comparison.  There are no convoluted messages saying ‘we are better than the equivalent priced product in retailer X’.  Aldi show the leading brand and the Aldi product and say ‘the only difference you’ll notice is the price’.  It’s a very simple, very visual, message that can be understood immediately.

All these tactics help build trust in the quality of individual products, but also have a halo effect on the rest of the store.  As a shopper you are constantly being reassured that you are making a good choice.   And when you get home, the final reassurance – the products are actually very good.

Like we said last time, no wonder they are winning…

We are planning a more detailed piece of work on Discounters, including category specific insight.  Why they are winning and the key implications for FMCG companies – including how you can help your key customers defend against the Discounter march.  Please contact us if you are interested in being involved in this..