Loyalty card flagged as Aldi’s last big gap in taking on Coles and Woolies
Aldi will need to establish a loyalty program if it is to continue its rise against the might of Coles and Woolworths, a new study of the state of the Australian retail market has suggested.
While Aldi performed strongly across the board on a number of measures many consumers highlighted the lack of a loyalty scheme as a major gap, according to the survey of 758 consumers by loyalty specialist agency ICLP.
The survey asked people what their expectations were of retailers and then benchmarked them against their experience.
By comparison, for Coles 25% said their experience was rewarded against an expectation rate of 35%.
The biggest gap between loyalty expectation and experience was at Woolworths which was forced into an embarrassing and costly about face on its rewards program last year after making massive changes to the scheme.
While 34% of people said they had an expectation their loyalty would be rewarded at Woolworths, just 18% said it was their experience.
Simon Morgan, general manager of ICLP said as Aldi grew in stature it would have to address its lack of a loyalty scheme.
“Obviously they don’t have a large scale initiative in place and they are relying on that kind of everyday bargain positioning to bring back customers,” Morgan said.
“But I think also they are a challenger brand, they are not an incumbent and I think they are benefitting from there being lots of opportunity brought about by other players not meeting customer expectations and choosing to shop alternatively.
“There will come a time when their market share reaches a point where they’re going to need to invest much more heavily in in those sort of customer initiatives and providing people stronger reasons to return.
“Arguably that’s something they should be looking at right now in preparation for the fact that at some point in the future they too will be become an incumbent in the market.”
Asked how honest retailers were in how products were priced, 35% of respondents said that they thought the German-based supermarket would be honest in its pricing, behind Coles at 38% and Woolworths at 33%.
However, in their experience with the retailer 46% of customers said that Aldi store was honest in its pricing, compared to 24% for Coles and just 19% for Woolworths.
Simon Morgan says Aldi is winning the trust war
Simon Morgan, general manager of ICLP, said the finding was a surprise.
“That fascinated us too, there is no doubt there has been an impressive showing from Aldi in the study,” Morgan said.
“In many ways I think it possibly even does point to perhaps the official end of the supermarket duopoly because they have done so well.”
Aldi outperformed Coles and Woolworths on the key metric of consistent product quality, with an expectation of 69% and an experience rating of 67%, compared to Coles (55% and 44%) and Woolworths (54% and 36%).
It matched its rivals on treating personal information with respect, with 26% saying that was their experience, just behind Woolworths on 27% and Coles which topped the list on 29%.
One of the more surprising findings of the study was the decline in the standing of David Jones, once a name that saw loyalty, trust, respect and reliability at the very core of its brand, allowing it to stand aside from rivals such as Myer.
Retail brands which come to mind first for shoppers. Source: ICLP
David Jones only managed to squeeze in at number eight in the retail brands which came to consumer’s minds first, well behind Coles, Woolworths, Aldi, Kmart, Target and Myer.
The retailer elicited so few responses in the survey the researchers said they could not draw any statistically meaningful findings about the brand’s standing in the minds of consumers.
Aldi do have a loyalty scheme… it’s called promising that you’re never paying more than you need to for your shopping.
As far as I know they’ve never launched a loyalty offering in any other market so why would they do so here? Your own data tells the story – people don’t expect to be ‘rewarded’ for their loyalty at Aldi as they understand the trade offs. It’s a no frills offering.
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never ask the barber if he thinks you need a haircut
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If your assessment is that Aldi needs a loyalty program you’ve missed the mark completely………
Why use a loyalty card that adds additional overhead when it could just go against spruiking and delivering great EDLP prices?
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Aldi needs a loyalty card, I don’t think so………
Why add the overhead with a loyalty card program that delivers no tangible benefits. Just continue to lead with great EDLP price
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I agree with Will above – not every retailer needs a loyalty program.
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This is nonsense. One of the reasons I do most of my shopping at Aldi is that they don’t indulge in marketing bull such as loyalty cards. If they were to take this route I would see it as a negative sign about there business model.
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Agree a loyalty card would be adding unnecessary overhead. What Aldi really needs to close the gap is e-commerce. I’d love to see what they could do in that space vs. the two majors.
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Totally agree with the comments, Aldi doesn’t need a loyalty card, people who shop at Aldi are more after the best value for money, rather than 100 emails with “Hi you will love XYZ”. I think that they would potentially loose some of their current customers if they introduced a loyalty program.
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I thought Aldi was about simplicity and effectiveness
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Absolutely agree with above comments. Aldi rewards its customers with the quality of their goods and the low prices. It does not need to offer more.
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You only need a loyalty card when you have a like-for-like competitor that offers the same service at the same price (supermarket, cafe, airline, etc), and bonuses or “extras” are all that’s left to differentiate and incentivise customers to be loyal to you. While ALDI have a unique-ish product range and no one else who can compete with them on price point, why bother – they have no need… yet.
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What Eaon said…
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Why don’t ALDI have in store gift cards? I have a few children that have let home & live interstate. From time time I want to help them out with groceries. Unfortunately Coles & Woolies are too expensive however I am drawn to them because they offer ‘giftcards’. Please ALDI set this up & I would be the first to buy a few!
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I love it
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I would like getting to rewards card
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I shop at Aldi BECAUSE it is one of the few places you can buy groceries without being hassled about joining some stupid, time consuming, labor intensive customer loyalty program.
I’ve quit shopping at places because I can’t get out of there without hassled about taking their loyalty card. “It only takes a few minutes” NO “But don’t you want to save money?!” I’ve been at work all day, I’m tired, I have other things I need to do with my time, I just want to buy my groceries and go home. I WISH I HAD SO MUCH FREE TIME!!!!!!
BTW, in some cases, when I divide the paltry savings by the time it takes to comply with the rules to get those savings, it works out to be substantially less per hour than I make working at my job.
What do I prefer? EVERY DAY LOW PRICES – AND NO HASSLE, DON’T ASK FOR MY PHONE NUMBER OR MY EMAIL ADDRESS, DON’T TRY TO SELL ME SOME EXTENDED WARRANTY!! JUST SELL ME WHAT I NEED AT A FAIR PRICE AND DON’T WASTE MY TIME! Why is that so hard for you people in the retail industry to understand?!!!
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How can I apply for Aldi loyalty card
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