Much loved discount grocery chain Aldi might need to start sending the love back to customers, with a report showing the retailer’s lack of loyalty scheme has put it behind competitors Coles and Woolworths.
Mumbrella reports a survey completed by customer loyalty specialist ICLP has revealed just 20% of Aldi shoppers feel their loyalty to the brand is rewarded, compared with 34% of Woolworths shoppers and 35% of Coles shoppers.
When these responses were benchmarked against actual customer experience, Aldi fared even worse, with just seven percent of customers actually experiencing loyalty rewards from the retailer. This compares to 18% of Woolies customers, and 25% of Coles customers.
General manager of ICLP Simon Morgan told Mumbrella despite Aldi being a “challenger brand”, there will come a point where a loyalty program will be required to prevent it from losing customers.
“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,” Morgan said.
“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.”
A similar survey carried out in the UK revealed the same woes face Aldi-loving customers everywhere, with just nine percent of UK Aldi shoppers saying they felt rewarded.
“Our customers are incredibly loyal to Aldi because we focus on consistently providing them with outstanding quality at the lowest grocery price in the UK, rather than confusing them with loyalty schemes or gimmicks,” an Aldi spokesperson told CityAM.
Aldi’s no-loyalty approach could be a winner in the long term, given experts questioned last year whetehr customer incentive schemes were the way to go. Behavioural economics consultant Bri Williams told SmartCompany more retailers should be looking to build a strong customer base without the need for a loyalty schemes.
“I would call the supermarkets a ‘transactional loyalty’ program. Because they’re there, people think they may as well get the rewards. But businesses need to go further than that,” Williams said.
Despite the low scores on customer loyalty, Aldi scored well across the other areas of the survey, including brand trust, reliability, and respect.
In the eyes of shoppers, Aldi is considered to be the most honest on its product pricing, with 35% of shoppers expecting honest pricing, and 46% actually experiencing honest pricing. Coles fared the worst in this category, with 38% expecting honest pricing, but only 24% finding that as their experience.
The German giant also knocked it out of the park when it came to consistent product quality, with customers expecting this 69% of the time, and actually experiencing it 67% of the time they shopped.
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Dominic Powell is a journalist at SmartCompany and a tech and music geek. When he’s not writing, you can find him reading or browsing record shops.
