Unusual items and word of mouth are driving the discount retailers’ success, reveals Newton.
14 August 2017
Retail consultancy Newton’s recent survey reveals that UK consumers are particularly enthusiastic about shopping for their groceries in the discount supermarkets. The research, which surveyed 2,000 UK consumers, found that Brits have a passion for both purchasing and talking about the unusual items they buy whilst shopping for their groceries at the likes of Aldi and Lidl, with three out of four (75%) people claiming they have bought something unusual at a discounter and two thirds of these people recommending these items to friends and family.
In fact, one in five consumers surveyed stated that it is these unusual items that encourage them to head into the store and one of the main reasons why they shop at these specific supermarkets.
In the bespoke consumer research, when asked what was the most bizarre and exciting item consumers had purchased, the majority of respondents claimed that they had predominantly purchased tools (over 18%) and kitchen gadgets (17.2%) at the discount retailers alongside their weekly shop. Whilst many of the multiples also sell these items, consumers seemed particularly delighted when they saw these products in the discount stores at a bargain price and therefore purchased them on the spot to avoid disappointment.
These consumer results add weight to Newton’s recent retail study, contending that whilst the multiples such as Asda, Tesco, Sainsbury’s and Morrisons have been struggling for growth compared to the discounters, they can still steal a march on the discounters if they take a number of specific steps. This paper by Newton, entitled ‘Beating the Discounters’ argues that shoppers’ habits are changing and that the discounters are successfully positioning their offering as the same or even superior to the ‘big four’, when the multiples are better in just about every area, such as quality, convenience and availability. Further still, the report and subsequent research states that Lidl and Aldi are giving consumers a reason to feel passionate about their shopping experience, again through the purchasing of these unusual or surprising products.
Paul Harvey, head of grocery at Newton, comments on the results of the consumer survey:
“Newton has had many years’ of experience assisting with a number of the UK’s most popular retail organisations. The continued trend of consumers opting to shop at discount retailers shows no sign of slowing and, as a result, the multiples are likely to continue to be hardest hit. Our in-depth study ‘Beating the Discounters’ challenges the multiples’ persistent focus on price as being the biggest driver behind their loss in market share and offers various ways that the multiples can fight back.
“This additional consumer research further highlights that price isn’t the only reason why the discounters are doing so well. Customers feel proud to recall the surprise bargain they found at a discounter and are motivated to tell their friends a story about their positive shopping experience.
“Multiples have to look at bolder tactics to make consumers feel passionate about their shopping experience and draw people back through their doors.”
Newton’s report recommends that the multiples should consider ‘8 steps to success’ to regain market share from the discounters, such as:
Create just two tiers of products where possible: a mid-tier and a high tier
Increase the perception of the mid-tier so customers feel passionate about these products
Match price on the 1,500 SKU’s comparable to the discounters to become competitive