Alex Lindstro
In 2021 and 2022, rising inflation hit hard, peaking at nearly 10%, the “largest increase in 40 years.” The Consumer Price Index (CPI) rose to historic heights, with food at ‘home’ and ‘away-from-home’ both sitting 8- 9% higher over March 2022.
Today’s trying economic conditions have resulted in an estimated 64-87% of consumers ‘trading down,’ which is to say bargain hunting, across all age groups and especially for low-to-middle income ranges.
These numbers don’t fully capture the actual experience on the ground for cash-strapped shoppers, who have seen essentials like cereals and this winter’s now notorious egg prices appear to effectively double in cost.
Enter Aldi: The Quickly Expanding Affordable Grocer
In this socioeconomic environment, it is really no wonder to anyone not living under a mountain why a budget brand like Aldi might succeed, and succeed they have. Aldi was one of the first retailers to understand this market dynamics and provide affordable prices to the consumers.
Aldi is growing, fast, nearly topping global lists. With over 10,000 stores in over 10 countries and
2,290 US stores open as of March 27th, 2023 across 39 states, Aldi is now the third largest grocer in the United States with clear room for further growth.
Aldi’s success and rapid growth highlight the evolving landscape of the grocery industry, where consumers are increasingly focused on price, quality, and convenience. This makes perfect sense as Aldi’s business model has always been about finding ways to transfer savings to customers by cutting costs and increasing operational efficiencies.
Anyone who has shopped at Aldi knows they do things a little differently – from branding to merchandising, or perhaps the most visible manifestation of this model is likely the pay-a-quarter cart system that incentivizes customers to manage the parking lot themselves, an effort other grocers pay a considerable amount in labor to manage.
Aldi’s Swift Expansion of Self-Service Checkouts
To suggest that Aldi’s success has been the result of that hardship alone would be remiss. Aldi has managed to exploit some of the other key changes in consumer preferences, including the need for increased speed and convenience. And as more shoppers embrace technology and self-service options, Aldi has proven to be a leader and provide an example for other grocers making their own improvements.
When it comes to the in-store experience, Aldi has made significant improvements in supporting customer-centric shopping journeys. Most notably, the strategic rollout of self-checkout kiosks, designed by one of the leading self-service providers, Diebold Nixdorf.
By equipping the right amount of self-checkout kiosks per store location housed with Diebold Nixdorf’s technology, Aldi has not only changed the way consumers shop, but how employees are able to interact with customers. These solutions also help regulate the flow and reduce queues.
All of it comes together, changing the way Aldi’s consumer’s shop while easing budgetary pressure on the company to provide numerous cashiers as business continues to rack up (and ‘staffing issues’ remain).
Aldi as a Lesson for Every Digitizing Retailer
Today’s industry conversation is so often tight around the subject of increasing automation, deeper and deeper tech investments, and other aspects of the metamorphoses that are modern digital transformations, particularly at a time when AI-generated content is rapidly becoming a major player. Aldi’s continued U.S. expansion is a clear demonstration of: knowing your brand, knowing your customers, and knowing what your specific needs are before investing in new tech. For Aldi, in-store checkouts met their needs perfectly, conforming to their brand identity as well as what their customers want and expect while meeting the challenges of a tightened labor market. It was another in a string of smart investments by the German company. To stay competitive, grocers must understand how to leverage technology to provide a customer-centric in-store experience that meets shoppers’ preferences. This can be achieved by leveraging self-service technology with advancements to the in-store layout, employee training, and customer interactions—all while staying true to their brand identity.
To learn more about self-service solutions, visit: https://www.dieboldnixdorf.com/en-us/retail/solutions/in-store/self-service/
