We all need to eat, and the vast majority of us get our food and housewares at grocery stores, drug stores and discount department stores (which today include giant hybrids of all three). And while I have found myself in any one of these hybrids on several occasions, when it comes to primarily grocery shopping, there is one place I have gone for at least fifteen years, and likely will continue: Aldi.
In the United States, Aldi is known as a heavily discounted grocery store chain that primarily operates in lower-income communities. While that may have been the case twenty-plus years ago (or maybe not), today, they are opening new stores in communities all over, especially where there is high socio-economic diversity. And as I have learned and observed quite a bit about these privately-owned, German-based companies that are among the largest food distributors on the planet, I have picked up quite a few lessons as they pertain to business and life.
Okay, perhaps “Everything I Need to Know…” is a bit exaggerated. But there is a lot to learn here:
If you want to succeed in a highly competitive industry, it pays to do things differently than the rest. Let’s face it: groceries are the ultimate commodity, and Aldi has continued to grow or maintain its market share for decades while other major players have come and gone. To this day, there has been little change in their approach. Yes, they have made a few adjustments along the way, but those have been in the interest of serving their customers, not a status quo.
When you have skin in the game, you will take better care. If you pull into your average Aldi parking lot, one thing you needn’t be worried about is your car being dinged by renegade shopping carts. Why? Because customers, upon unloading their groceries, return their carts to the central corral (right at the store entrance). What’s the secret? How does Aldi brainwash its customers into becoming such good stewards of their shopping carts (which no-doubt cost hundreds of dollars apiece)? The answer is simple: At the cart corral, the carts are locked to each other with a simple chain mechanism. To unlock a cart for use, your key is a quarter. That quarter stays in the lock until the cart is returned. If you don’t return the cart, you don’t get your quarter back. It’s a tiny deposit which makes a big difference…think about that next time you pull in to your average Walmart parking lot.
More does not mean better. Last week, I was in a Meijer superstore. I was picking up a prescription, and since I was there I thought I would pick up just a few grocery items. Ugh! The pharmacy was on one side; the groceries were on the opposite side…two zip codes away. Given the size of these behemoths, you would think they would have an internal monorail service to get people around.
But at Aldi, you will only have six aisles to go through…not six hundred. Yes, it is not a super grocery store–and they may not have absolutely EVERYTHING you are seeking. Their business model is based upon two key factors, which focus on simplicity:
When it comes to groceries and many house wares, they carry the staple items that the vast majority of households need and want to get by on a regular basis. According to their website, the typical supermarket carries about 30,000 items; they sell only about 1,400. Most (but not all) of these items are branded as exclusive to Aldi…most of which are no doubt manufactured by name-brand companies the same as it is done for other chains. But the quality is as good if not better than the major household brands.
One size fits all. Think about when you last bought ketchup at the supermarket. How many brands were there from which to choose? Six? Eight? Of each brand, how many sizes? Must buying ketchup be so complicated? At Aldi, they have one “brand” of ketchup (and it’s as good as Heinz), in one size, and at one low price. Easy call to make…no spreadsheet required.
Even with commodities, it is not just about price. Yes, their marketing does tout their low prices. And let me tell you, simple math is all it takes here. If you are feeding a family, shopping here can cut your food bill in half, and save even more time and wear on your shoes. But if the quality of the products were not up to par, what would all that savings truly be worth? Not much. Yes, price matters to all of us…but value is not a definition here–it’s an equation that factors in the balance of what we ask of our customers, and what are we to deliver in return.
Let others go before you sometimes; you will feel better. Typical grocery stores have “express” checkout lines for those customers with less than twelve hundred items. Not so at Aldi: all lines for everybody, regardless of quantity. In most of the Aldi stores I have visited, this has led to a custom among the regular shoppers (you know…the ones who “get it?”): if you’re in line with a full cart and the little old lady behind you only has a half-gallon of milk and a bunch of bananas, for Pete’s sake, let her go first! And I would say (and do) the same even if it were not a little old lady but a young, able-bodied person. It is just a courtesy of putting others first that customers have adopted that make it a better experience for everyone.
In God we trust; all others pay cash. No, I am not referring to the classic Jean Shepherd novel upon which the beloved movie A Christmas Story was based. Rather, if you are accustomed to putting your groceries on an actual credit card, you will be stuck. Principally, Aldi only accepts cash. Practically, they take the cash in the form of debit cards as well (which include those who are using government assistance). But this is one area in which, again, simpler pays off. Groceries are a business with slim margins, and those credit card fees take a heavy bite.
Give people what they truly want and need, and they will become loyal for life. Indeed, I certainly did not want this to become a commercial for Aldi–because that is not my intent. But I have found so many life lessons from my experience with this store chain over the years–especially in the loyalty of its customers. I cannot tell you how many times I have told others, who are concerned with the time and expense of feeding a family, to give Aldi a try. It might take more than one trip–because it is different, and in my opinion, it is better. And if you talk to other regular customers, you will find a sense of loyalty that runs deeper than you might find in a regular customer of Walmart or Kroger. I think this loyalty is earned. Further, we can learn from that example.
So if you want to observe how to succeed in a highly competitive industry, I suggest you give Aldi a serious look. Just don’t forget your quarter.