Aldi’s Bid for the Online (Super) Market

Power Retail By Power Retail | 23 Mar 2021

Aldi is planning to enter the whirlwind of online retail, reports have found. However, it has plans to hold off on its grocery offering for now and will focus on Special Buys and alcohol.

While it’s taken some time, the retailer is planning to launch some of its best-selling products on an e-commerce platform in the future.

While groceries are not a priority right now, the German retailer will start out by selling things that are considered ‘more exciting’, explained Tom Daunt, the CEO of Aldi. This may include alcohol and its Special Buys.

“We are likely to start with something more exciting like wine or Special Buys online before we would entertain a full grocery offer,” he shared to News Corp.

These ‘exciting’ items may include its bestsellers, including its much-loved ski gear, which is re-launching in stores in 2021.

Currently, Aldi has a 12.4 percent market share of the Australian grocery scene, with Woolworths nabbing the top spot with 32.9 percent and Coles sitting behind with 26.5 percent.

According to Roy Morgan consumer data, online alcohol sales soared in 2020. In fact, over the span of 2020, nearly six million Australians bought packaged alcohol in an average of seven days in-store, online or over the phone, the report has found.

via Roy Morgan

Online alcohol orders have more than tripled from 2019 to 2020 | via Roy Morgan Single Source, Jan.-Dec. 2019, n=3,177, Jan.-Dec. 2020, n=10,609

One in ten of these shoppers bought alcohol online (11.3 percent), which is more than triple the figure from 2019 (3.5 percent).

“Although liquor stores were able to stay open throughout the lockdowns there was a definite impact on how Australians bought their packaged alcohol in 2020 compared to 2019. To be sure, most Australians who bought packaged alcohol in 2020 (88.6 percent) bought alcohol from a store, but this was down almost six percentage points from 2019,” explained Michele Levine, the CEO of Roy Morgan.

“Taking up the slack was the fast-increasing proportion of Australian packaged alcohol buyers going online for their liquor purchases, up nearly eight percentage points to 11.3 percent for the year. It’s true the proportion buying online peaked at 15.4 percent in the September quarter 2020, but even during the relatively restriction-free December quarter 2020, a sizeable 12.0 percent were still buying online – up nearly ten percentage points on 2019.

“Liquor outlets that have successfully sold their products via online channels over the past year will be hoping Aussie packaged alcohol buyers keep up with their online purchases as the average spent buying liquor online in a week is $124 compared to only $71 when buying in-store – a difference of over $50,” he explained.

Professor of Marketing and Consumer Behaviour at QUT, Gary Mortimer, has expressed that one of the reasons why the retailer hasn’t made a large footprint online is due to losing a ‘point of difference’ once it reaches screens.

“The overarching challenge is once you go online, even if [it’s] just for alcohol or Special Buys, you put yourself self in direction competition with national players and global players like catch.com, which is now owned by Wesfarmers, Amazon and Dan Murphy’s online,” he explained to News Corp.

“Aldi’s growth has been supported with the clear point of differentiation. It’s a very different experience shopping at Aldi and that’s what draws customers to the store – the lines at the front of the store on Saturday morning to capture those Special Buys is a part of the experience of shopping at Aldi. If you move online you lose that point of difference and I think that’s possibly why they have been hesitant to move online even until today,” he said.

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