Last week, Aldi opened up its first Shop & Go store in Greenwich, which allows customers to simply pick up shopping items and walk out without scanning items or going to a checkout – similar to that of Amazon Go.
This is a bold move by the discounter, who are not often known for prioritising speed of shop, however they did enter the world of convenience in 2019, with the introduction of Aldi Local.
We took to Greenwich to check-out the new store and, using Lumina Intelligence, we highlight our five key observations…
This isn’t your standard Aldi range
If you’re hoping to go into this store and walk out with an air fryer or a new power drill, then think again. This store is positioned as a direct competitor to traditional convenience. When you enter the store, you are met with a tight range that focuses on core convenience missions, such as food to go and meals for tonight. The latest data from the Lumina Intelligence Convenience Tracking Programme indicates that meal occasions account for 13.4% of all convenience store visits
Despite a reduced range the prices are just as accessible as you’ll find in their larger format stores.
Increased food to go presence
Aldi supermarkets are certainly not synonymous with the food to go mission, particularly versus competitors. The range is usually incredibly limited and leaves shoppers very uninspired. However, in its new Shop & Go format, Aldi have placed a greater emphasis on food to go, a mission that is so key to convenience retail. According to our latest UK Food To Go Market Report the convenience channel holds the biggest share of the UK food to go market. Furthermore, within convenience, the mission accounts for 14.1% of all visits – the third most popular reason for visiting.
Whilst, the current range remains more limited to many competitors, this move highlights the intentions of Aldi to deliver against the key trends impacting the channel and target a shopper that may not necessarily already be an Aldi customer.
Championing British, with a focus on quality
Support for local produce and local businesses has grown rapidly over recent years. Our latest Convenience Tracking Programme data indicates that 78% of shoppers think it is important to support local suppliers. This is only going to grow in importance as Brexit continues to impact the cost and red tape of importing goods – something discussed in the most recent episode of The Convenience Mix podcast. Aldi are playing into this demand by putting the British logo in a prominent position, along with the words ‘specially selected’ to emphasise quality.
These ‘Specially Selected’ ranges are often merchandised in highly visible, transient locations within the store, such as premium ‘food for tonight’ aisle end & ‘on-the-go goodies’ section. Our data shows that 87% of consumers think good quality and that 75% are happy to pay more for higher quality produce. This store is no different to the supermarkets, as it tries to emphasise quality at affordable prices, encouraging consumers to trade up and spend more.
The need for speed
A trip to Aldi is rarely described as a quick experience, with minimal checkouts and relatively long queues often the picture painted. However, here we have an Aldi store without checkouts, where shoppers can just walk in and walk out, as long as they have the app.
According to out UK Convenience Market Report 2021, speed of service and ease of shopping both feature in the top seven factors that are most likely to influence a shopper’s likelihood to recommend a particular store. Shoppers want a quick experience. Interestingly value for money, price and staff friendliness are all bigger influences than speed and ease.
As it stands, Aldi Shop & Go is tapping into all these factors. Competitive pricing that matches the discounter model, a focus on quality to highlight good value, in and out technology to promote speed and ease and attentive staff to help with the process. From a staff perspective, the store was littered with people looking to help shoppers, however this was mainly from a digital perspective – helping people download the app etc. Time will tell if Aldi continue to invest in staff within this format.
Frictionless technology
The evolution of tech across most industries has accelerated over recent years, and convenience is no different. However, if tech is not seamless then it can be to the detriment to the customer experience.
In the case of Aldi Shop & Go, the tech is in place to make shopping efficient and frictionless. Particularly amongst younger consumers, scan & go technology is key to driving footfall. In fact, according to our recent Future of Convenience Report 2022, 18-24 year olds and 24-34 year olds are +70% and +40% more likely to select scan & go as one of the most important aspects of a general shopping experience.
Aldi are really hitting the mark with this technology, as are other retailers. Naturally you expect some teething problems, however, some of the challenges around the technology added complexity to the experience. You are unable to see your basket whilst shopping – or I just couldn’t find it – you just have to assume that what you have picked up and put back has registered, the age verification process for alcohol didn’t seem to work causing a large queue to speak to staff and I was told my receipt would be emailed within 10 minutes – it took 24 hours!
Overall, this new format is a big step change for Aldi, one that should make competitors sit up and take note. Expansion of this format, whilst maintaining a discounter pricing structure could be a significant threat to other retailers. There are some issues that will need addressing around the technology, but this is a move that will target a younger demographic that does not currently shop in Aldi, but are key for sustainable growth.