As competition between grocers has intensified, discounters have increasingly turned to value-added strategies, including e-commerce. This report explores why e-commerce is a promising expansionary strategy for grocery discounters, details the e-commerce strategies of some of the world’s leading discounters including Aldi, Lidl, Walmart, Dia, and Rewe, and offers a specific framework with specially selected data to analyse grocery markets and discounter prospects in any country.
Discounters are conservative, even by retail’s typically slow-moving standards. They have historically shunned rapid expansion in favour of step-by-step improvement of their fundamentals. A few of the largest discounters have dabbled in omnichannel investment for over a decade, but serious money started to flow into these programmes in 2015.
Discounters have been concentrating on their fundamental offer for so long that they have run out of room for growth in some countries. In order to continue to expand, they are seeking ways to find new customers and encourage existing customers to spend more. As e-commerce is the fastest growing area of retail, they are focusing on online retailing in order to achieve growth.
There are significant differences by retailer and country, but common themes emerge. Mobile is a focus for everyone, particularly in less developed markets. Cross-border is also important, reflected in the search for international partners in China and well-placed infrastructure investment in Europe. An emphasis on community is common, with retailers recognising the struggles of local women, the elderly and working class consumers, and trying to provide a forum for discovery and discussion amongst them.
While discounters have adopted new tactics, many stem from the same strategy. Investment in assets that are low cost, like a basic mobile app, or experiments that are high margin, like home delivery of alcoholic drinks, indicate that discounters are approaching e-commerce with their conservative mindset.
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