Three lessons from Aldi's founder for today's brands
Philip Clarke has announced his departure as Tesco chief executive – one day before his party celebrating 40 years service – to make way for Dave Lewis, a career brand marketer who joins from Unilever (see our news analysis, Mark Ritson’s take on it or visit our dedicated Tesco homepage for all the latest).
But as we pick over Clarke’s legacy at Tesco, Aldi capitalised on any potential instability at its rival by announcing its “biggest ever” £600m expansion drive in the UK. By the end of 2014, it will employ double the amount of staff it did just two years ago.
Aldi is a fascinating case study for marketers because it simply doesn’t conform to market norms. It breaks rules. Actually, scratch that – it simply doesn’t think the rules that govern others applies to itself. What do I mean? Well, while most of the retailing industry is going online, Aldi’s joint managing director Roman Heini says: “There is no clear evidence that online is a profitable model”. To say that the internet isn’t a profitable model in retailing is to go against pretty much every trend of the last 15 years.
Aldi’s rule-breaking ways go right back to its heavily secretive founder, Karl Albrecht, who also died this week aged 94. I’ve picked out two lessons from how Albrecht did business that still resonate today.
1. Limit yourself – you can’t do everything. It is tempting, particularly with internet shopping, to offer an incredibly wide range of goods. In the time of Karl, Aldi kept its range to just 300 items that were quick-selling cupboard staples. There was no need for a complex distribution network or thousands of individual supplier relationships. Even today, Aldi stores generally carry only a couple of thousand lines.
2. Understand where you can compromise – and where you can’t. Aldi stores have not focused on creating an inviting shopping experience in the same way as rivals. No alluring images or bright lighting; the Aldi shopping experience is about presenting you with the product range in a simple way with no frills. The brand takes the gamble that an Aldi shopper will accept the simple presentation style in return for its low prices. Prices are something that Aldi simply does not compromise on.
3. Focus your marketing on one core message. Back in Karl’s day, Aldi didn’t do advertising. You couldn’t even phone a store. But in his own way, each store still did marketing – images of the shops show them plastered with posters advertising the one core message: price. Today, the Aldi ‘Like brands. But cheaper’ does the same job – one message, simply put.
If I were Dave Lewis, I would be asking what Tesco’s core three themes were and how to make consumers understand them today.