Are rumours about the Aldi Online Shopping website a clever marketing stunt or is there a real business plan behind it?
Many of the worlds top retail websites have published their thoughts on what it could mean for the retail industry especially the established eCommerce grocers. We’ve collected the best articles below:
Aldi UK says e-commerce ‘not an immediate focus’ (Read Here)
On Friday 20th March 2015 Reuters published an article where they quoted an Aldi spokeswoman as saying:
“E-commerce is not an immediate focus for Aldi as we currently have the best performing business model in the grocery sector. However, it is an area we monitor as part of our customer-focused approach.”
Recently Retail Week has reported Aldi UK boss Matthew Barnes saying launching online grocery ‘is not on our radar’
Aldi to launch ecommerce site as full-year sales soar but profits fall (Read Here)
…what the article does report is that Aldi is launching it’s own transactional eCommerce website to sell wine by the case.
“[Aldi executives]…believe it’s the right time for us to learn about what is a complex business. We’ve been watching it for many years and we can’t ignore the growth in online.” – Matthew Barnes, Aldi UK and Ireland Chief Executive
The Aldi online shopping website will be launched early 2016 and after wine they will look to non-food items.
Planet Retail think this makes sense:
“Wine is an ideal category for such a launch – not only because discounters are increasingly using it instore to position themselves as more upscale, but also because the category comprises high-ticket items with low price transparency. Manufacturer brands barely play a role and bottles can be easily shipped in standardised packaging.”
The Drum, in their article, suggest that Aldi online shopping could be a great way for the brand to engage with shoppers weary of being seen shopping at Aldi. It’ll provide a way for these image conscious shoppers to take advantage of the discount grocer’s pricing.
What does this mean for UK Grocery?
“Online grocery is already the fastest-growing distribution channel (by rate of growth), and the entry of one or both of the leading discounters could accelerate that and change the economics of online grocery retailing.
“As technology continues to redefine shoppers’ preferences for value and convenience, continued experimentation and investment in online grocery– including from discounters like Aldi–is likely.”
Essential Retail published a quote from Rupal Karia, managing director of retail and hospitality for Fujitsu UK & Ireland.
“Aldi’s physical stores have been hugely successful – noticeably so at a time when competitors struggled. This launch is the latest step in the discount retailer’s growth and is a savvy one. We are now seeing a tipping point where it is becoming a viable option for discounters to offer online services, if not for all but certain product lines.
It will be interesting to see if Aldi goes down the Poundland route of charging for deliveries below a certain value, or if the product ranges chosen for online can hold their value with the cost of delivery included.”
The difficulty for any discount business is maintaining profit when you only have thin margins to operate in. This becomes especially true for distributing physical goods sold online.
This is where luxury brands have the upper hand; they can afford to spend more on distribution and a complex business model because they have the profit to back it up.
So early 2016 will see the Aldi Online Shopping plan take off but it’ll probably be quite a bit longer before we know if the plan paid off.