Aldi Digital Marketing Campaign

INDUSTRY

BACKGROUND

ALDI competes in the global food and grocery retail industry and aims to be even more competitive in the U.S. This industry encompasses food products for sale at grocery stores, massmarket retailers, convenience stores, drug stores, and foodservice facilities. In 2020, the global food and grocery retail market size, measured by revenue, was $12.29 trillion and is projected to have a 5% compound annual growth rate until 2027 (GlobeNewswire, 2021). The U.S. food and grocery retail market size was $865 billion in 2020 and is also projected to have a 5% compound annual growth rate until 2027 (Zippia, 2022). A current trend in the industry is an increased demand for food products, especially organic and quality food products. The industry is developing in e-commerce and food processing.

ALDI COMPETITION

Walmart Trader Joe's

Walmart offers consumer friendly prices while placing an emphasis on bulk sales. Their motto of “We save people money so they can live better” helps to position them as a bargain store with affordable prices. Walmart also draws in customers by allowing them to pay installments for larger purchases.

Similar to ALDI, Walmart offers a wide variety of products from groceries to furniture to entertainment. They also have an annual revenue around $572.8 billion dollars.

In terms of digital marketing strategies, Walmart uses Instagram specifically for strengthening their brand, and not so much for directly marketing and advertising their products. This is a limitation in their social media strategy because they are not communicating anything about their products or the quality of them to consumers, which is important for strengthening the overall brand. It should also be noted that since Walmart is so broadly focused in terms of the variability of their products, it makes it difficult for the company to excel at one particular area, such as groceries.

Trader Joe’s current marketing strategy is to offer products to consumers at everyday low prices. By using this strategy similar to ALDI, Trader Joe’s has amassed a loyal customer base. They have weekly ads containing a full range of discounted products, and they posted a 10-year compound annual growth rate in customer base of 5.9% (compared with 4.9% for Whole Foods).

Their annual revenue is around $12 billion dollars, in which 80% comes from private label items. Despite their success in terms of revenue, they face geographic limitations which can result in low market share for the company.

In terms of their social media presence, Trader Joe’s currently has 2.7 m followers on Instagram and around 55,769 followers on Facebook. Their Instagram contains highlights which showcase their products, the community, podcasts, store locations, and their crew. Additionally, they are able to promote and advertise specific products on their Instagram, ranging from makeup products to groceries This helps to satisfy customer needs since Trader Joe’s communicates the value of their products through social media.

Their focus on high quality products at the best everyday prices competes directly with ALDI’s mission, which is concentrated on sustainability and affordability.

BRAND ANALYSIS

ALDI’s first store opened in Germany in 1961, and its first U.S. store opened in Iowa in 1976. ALDI is now located in 11 countries and has more than 1,900 stores among 36 states. ALDI's store design, food selection, private labels, and online grocery offerings have helped the company grow and strengthened their brand identity.

From the 25-cent returnable deposit on shopping carts, the bring your own bag policy and focus on private labels,

ALDI has amassed a loyal customer base globally. In addition, ALDI offers 100 unique ALDI Finds that are put out every week. It should also be noted that 1 in 5 of their ALDI-exclusive products are award winning. ALDI’s core values are consistency, simplicity, and responsibility. With high quality products at affordable prices, ALDI is able to position themselves as one of the most sustainable grocers through their digital marketing strategies.

BUYER ANALYSIS

SWOT ANALYSIS: IN DEPTH

It was integral to understand the SWOT analysis for ALDI in order for our group to focus our attention on the problems that specifically need to be addressed.

ALDI has a multitude of strengths, primarily how they have maintained such a strong brand reputation. This is evident through the numerous awards and titles they have won such as “Best Grocer 2019,” and “Best Value for Money Supermarket 2019.” They also have a diversified product portfolio ensuring that customers have a wide choice of options to choose from. Also, their successful international business strategy helps them to diversify their revenue streams amongst the USA, Europe, and China. Additionally, ALDI is so confident in the quality of its products that it offers a return policy known as the “Twice as Nice Guarantee,” where if customers are not 100% satisfied with their products, ALDI promises to replace the product and refund the customer’s money.

However, they face positioning problems. Many customers view ALDI as a store for cheap and low-quality products. This problem needs to be addressed through more PR and advertising efforts designated to target digital media sites such as TikTok and Instagram. Additionally, ALDI has a poor penetration in high-income groups, since discount stores are targeted mostly towards low and medium income groups.

Additionally, they have many opportunities in which they can reposition themselves as the most sustainable grocer. They have the opportunity to invest more into digital advertising efforts and promotional campaigns, which will help to promote the affordability of their products. They also have the opportunity to expand their brand to emerging countries, since large economies could benefit from the low-cost business strategy employed by ALDI. Despite their numerous strengths and opportunities, ALDI has threats in which they should pay careful attention to. The rise of technology has shifted consumers to shop online and use home delivery options, which negatively impacts the expansion and sales of ALDI. Additionally, ALDI has fierce competitors that employ similar business strategies to them such as high quality products at affordable prices. Top competitors for ALDI include Walmart and Trader Joe’s.

PRODUCT ANALYSIS

Since 2019 ALDI has been surveying their customers on their favorite “ALDI Exclusives” across ten different product categories. The Mamma Cozzi’s Pizza Take and Bake line won its category for 2020-2021 and was one of the top items in terms of getting votes with over 45,000.

Some strengths of this product are number one the price; it is only $6 for a good quality pizza. It comes in five different types and some locations have gluten free options. It is also a staple item for grocery stores and it is important to have a quality product. A weakness of this product is that it is only sold in an extra large size. For a person eating alone or with only a couple people the portion is too large for one sitting.

This product is important to ALDI's current target market of women in their thirties to forties as they are mostly mothers. Frozen pizza is a simple, quick meal. It is perfect for a busy mom who does not have time to spend hours cooking. This product is also important to the younger demographic ALDI is hoping to attract. For younger people this pizza can be marketed for its high quality and low cost. This product could be marketed to college students as a great option when studying, especially with friends over or instead of buying food after a night out they can save by having ALDI frozen pizzas.

To attract the target markets of frozen pizza and ALDI, the product should be marketed for its low cost, several variations, high quality, and ease of preparation. People buying this product are either buying it during their regular grocery trips and storing it for use, but this is an important product because it can also bring customers to ALDI specifically just to buy this item. Many products are only bought during regular grocery visits, and this gives Mamma Cozzi’s frozen pizzas an important standing in their product assortment.

CAMPAIGN OBJECTIVES

We plan to strengthen ALDI’s brand identity through the promotion and advertising of sustainability; therefore, consumers will associate both sustainability and affordability with ALDI in relation to competing brands. In order to have high customer retention, our campaign will focus on creating customer value, maintaining a high level of customer satisfaction, and building a strong sense of customer trust.

Furthermore, we plan to demonstrate how ALDI products fulfill consumer needs through our product positioning strategy of promoting sustainability, consistency, simplicity, and responsibility. Since products are seen as a set of outcomes, we plan to set ALDI apart from competition by using positioning strategies focused on the price, quality, and benefits of products. By positioning ALDI as the most sustainable grocer, we will be able to amass our desired target market of college aged students as well as occasionals.

CAMPAIGN OBJECTIVES

BUSINESS OBJECTIVE

Our business objective is to divert consumers from competitors and to grow share of wallet (SOW).

Likewise, we plan to steal “x” amount of trips/month from ALDI’s competitors and to increase basket size by “+x” items/trip. By focusing our campaign around the sustainability and affordability of products, we aim to gain a new target market while building brand awareness and equity. We plan to focus our campaign around potential new customers (i.e., college aged individuals) in addition to occasional shoppers.

Consumers who visit the pop-up stands will have the chance to shift their current perception of ALDI into something more positive, while having the experience to learn and believe in ALDI’s sustainability vision.

CAMPAIGN STRATEGY

The current target market of ALDI is typically stay at home mom’s between the ages of 30 and 40. They are very active on Facebook, but not as much on other social media platforms. Because we are aiming for a younger audience to pull in with this marketing campaign, we have chosen to aim for the college age audience. ALDI is already well known for their deals and discounts, which makes it an attractive option for college students. In addition the younger generations care more about sustainability than most, so with this campaign our objective is to showcase how sustainable and affordable ALDI is, since most people do not currently associate ALDI with sustainability.

Because ALDI already has almost three million followers on Facebook and this is their most effective social media account for their current target market, not many changes will be made in their posts and content. The goal of this campaign will be changing the purpose of ALDI’s Instagram page and jumpstarting the ALDI USA TikTok account. Instagram is truly an app for branding whether it be a personal or business account. If ALDI hopes to be recognized as the most sustainable grocer in the nation they need to use Instagram for more than price and product promotion. ALDI’s Instagram needs to become a visual depiction of their brand, goals, and sustainability efforts. For TikTok, when you type ALDI into the search bar, the only verified account it pulls up is ALDI UK. If you specifically type in ALDI USA, there is a verified account that is pulled up with only 198 followers and no posts. Although TikTok is a fairly new social media platform, it offers businesses exposure that is not replicated on other social media platforms. The TikTok algorithm allows content to be viewed by anyone, not just people who follow ALDI and with the use of hashtags ALDI can direct content towards the younger target audience they hope to reach.

Aside from social media, the advertising and marketing strategies in retail are going through many changes as online shopping becomes more prevalent. Modern consumers are looking for an experience, which is why we have chosen a pop-up stand at local farmers' markets to be the additional element in our marketing mix. Most farmers' markets, especially in the Midwest, run weekly for about 6-7 months. Because this method of marketing requires more effort than most, we recommend ALDI sets up a stand/booth once per month. farmers' markets are already associated with sustainability to the general public, which makes it a great opportunity for ALDI. This is an opportunity for ALDI to interact with many consumers face to face and spread awareness about their sustainability initiatives, while also showing off their cult favorites and ALDI finds. Overall, the marketing strategy we have developed for ALDI is to redirect attention from products specifically and shift it towards an overall brand message of affordable sustainability.

OVERALL STRATEGY

We will be executing a continuity scheduling pattern for the duration of the campaign which is six months. We are choosing this because a continuity schedule allows for the continuous push of our message throughout those six months which is necessary so that by the end of 6 months consumers feel they have a deep understanding of and familiarity with Aldi’s new sustainable brand. Continuity was choosing over pulsing because we wanted our message to be on high and everywhere at all times. When building one’s brand essence and brand story, it usually takes years to build. That is why we need to use full force advertising as we have 6 months to drastically shift the brand image of Aldi. Using Commspoint, our team segmented our target audience which was about 57% of the nation. This reach is more than half of the nation, and means that 1 in every 2 individuals that see our advertisements fit in our target audience and will be influenced to take action. We segmented individuals who care about sustainability and who factor in price and are influenced by discounts when shopping.

STRATEGY 01 & 02

Tiktok Instagram

Because ALDI already has almost three million followers on Facebook and this is their most effective social media account for their current target market, not many changes will be made in their posts and content. The goal of this campaign will be changing the purpose of ALDI’s Instagram page and jumpstarting the ALDI USA TikTok account. Instagram is truly an app for branding whether it be a personal or business account. If ALDI hopes to be recognized as the most sustainable grocer in the nation they need to use Instagram for more than price and product promotion. ALDI’s Instagram needs to become a visual depiction of their brand, goals, and sustainability efforts.

For TikTok, when you type ALDI into the search bar, the only verified account it pulls up is ALDI UK. If you specifically type in ALDI USA, there is a verified account that is pulled up with only 198 followers and no posts. Although TikTok is a fairly new social media platform, it offers businesses exposure that is not replicated on other social media platforms. The TikTok algorithm allows content to be viewed by anyone, not just people who follow ALDI and with the use of hashtags ALDI can direct content towards the younger target audience they hope to reach.

STRATEGY 03

We plan to create pop-up stands at local farmers' markets once a month in each of the twenty-five ALDI divisions across the United States. Since farmers' markets are associated with sustainability, a pop-up stand with ALDI products will further promote the message that ALDI is concerned about developing ecofriendly products at affordable prices. With the addition of the pop-up stands, consumers will be able to take part in an experience that supports ALDI’s standards and principles. These pop-up stands will market both ALDI cult-favorite items and ALDI Finds. The addition of the cult-favorite items will drive loyal customers back for their favorite products. ALDI Finds are “limited-time, specialty products ranging from unique foods and home goods to unexpected items like gardening essentials and pet accessories” (ALDI, 2022). The implementation of these ALDI Finds in our pop-up stands will help to bring about potential new customers in search of unique items they can not find elsewhere.

SOCIAL MEDIA POSTS

SOCIAL MEDIA POSTS

BUDGET

Last year ALDI spent around $80 million on digital ads in total. We plan on allocating 25% of ALDI’s annual digital ad spend for this 6 month campaign. Thus, our digital advertising budget is $20 million. Of this $20 million, 50% will be allocated to Instagram and 50% to TikTok. We decided to split the budget in half between the two platforms because they have equal potential to reach our target market. TikTok and Instagram have the same user penetration rates of about 70% for 18-24 year olds (eMarketer, 2021).

For the budget of the farmers' market pop-ups, we focused on the cost of booth rentals, staffing, products, and the rewards app. It costs roughly $500 to rent a booth at the farmers' market for the 6 month season. The cost for booth rentals would total to $12,500. The average store associate salary at ALDI is $15 per hour, and the typical farmers' market is open for 5 hours. Thus, staffing will cost $75 per booth per month, which is $11,250. There will also be $100 worth of product per booth per month, which amounts to $15,000. In addition, the rewards app will cost $6,000 to create. These four factors total $44,750, which led us to decide on a $50,000 budget for the farmers' market pop-ups. This budget accounts for miscellaneous expenses such as transportation and signage. In total, our campaign’s budget is $20,050,000.

KPIS

To measure our campaign’s success, we have decided to use two different KPIs. Our KPI for Instagram and TikTok is the engagement rate. To calculate the ALDI USA Instagram account’s engagement rate, we divided the average engagement a post receives, including likes and comments, by the total number of followers. ALDI USA receives an average of 5,000 likes and 135 comments per post, and has 800,000 followers. Therefore, the account’s current engagement rate is around 0.64%. Our goal is to increase it to 0.75%, which is the average Instagram engagement rate for the FMCG food industry in 2021.

As we are starting the ALDI USA TikTok from scratch, we hope to have an engagement rate of 2.90% by the end of the campaign. This is on par with the FMCG food industry’s average TikTok engagement rate in 2021. For the farmers’ market pop-ups, we will be measuring customer growth as our KPI. With the goal of increasing brand awareness, we hope to see the number of people buying from the pop-ups increase as the campaign evolves. We are aiming to achieve a 10% month-over-month customer growth rate. We will also track the percentage of customers who redeemed the farmers’ market reward at an ALDI store. By utilizing KPIs, we will be able to evaluate if our campaign is achieving its goals to build awareness and gain new customers.

BRAND STORY

Since day one, we have always cared about the community. We started out as the Albrecht grocery store, a mom-and-pop grocer in a suburb of Essen, Germany. Shortly after World War II, the Albrecht brothers took over the store and made it the first-ever known discount store. The store’s affordable prices helped the community during a time of economic ruin. Decades later, ALDI has grown into a global grocery retailer, but our value of community has remained constant, which is why we have our ALDI Promise. Now, our first priority is to protect this planet that we call our home. Sustainability is something that we value deeply, and we feel a strong sense of responsibility toward our community. This is why we are the nation's leading sustainable grocer. Our affordability means that everyone can join us on this mission and be a part of the ALDI Movement.

CONCLUSION

By maximizing our advertising and promotional mix elements, our team plans to drive long term sales and revenue growth for ALDI. The focus of ALDI is on people and customers; therefore, the implementation of our social media campaign and pop-up stands will allow for consumers to gain a deeper understanding of ALDI’s product sustainability while taking part in a unique, memorable shopping experience.

REFERENCES

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