With online grocery set to drive around 50% of net new grocery sales between 2020-22 in Australia and Metcash having launched new online grocery platforms in 2020, we explore when will Aldi launch its own service and what could this look like?
Step one: Special Buys and Liquor
Aldi Australia is not a stranger to online retailing. The business previously operated an online liquor service from 2013 until March 2016, when it was terminated. The reason behind halting the service was so that it could focus all of its attention on its expansion into South and Western Australia. With Woolworths and Coles both reporting record growth in online sales and penetration of the channel, according to our data, set to hit 5.0% of market sales by the end of 2022, Aldi must be considering its next move. Speaking to News Corp this week, CEO Tom Daunt, said that launching an online service was an inevitable growth area and would likely start with Aldi selling alcohol and its Special Buys non-food products online, opposed to its full grocery range. Aldi already operates a Special Buys newsletter in the market and therefore has customers primed to target with a new service, plus launching initially in these categories, will also gain Aldi a foothold in the channel ahead of working out what it should do next.
Step two: figure out an efficient and standardised solution
We are all aware that driving a profit from online grocery services is a major challenge. Therefore Aldi's steady and cautious approach to take the plunge and launch online in Australia is understandable. Anything that the retailer rolls out in its eyes will need to be efficient and profitable, so that it can continue to invest in keeping prices low. Its operating model is also built on consistent international standards and therefore having a uniform solution that can be deployed successfully and efficiently, but flexed, across all markets will be key. We already know that Aldi Süd, which Australia is part of, is rolling out a new globally uniform IT system across its 20 countries and this will certainly help its growth into online grocery. On top of this according to reports. Aldi has also brought together both Aldi Nord and Aldi Süd to look at how to roll out a standardised solution for ecommerce, with the UK, US and Australian businesses understood to be at the forefront of this request.
Source: Aldi (UK)
Step three: click & collect and third party delivery?
With efficiency set to be at the heart of any solution Aldi introduces in Australia, as well as from looking at what it has done so far in other markets, we can predict what will come next. Aldi launched an online service in the UK last April offering food packages, this was followed by signing a partnership with Deliveroo to fulfil orders from 120 stores and then a click & collect solution that was rolled out to 200 stores by the end of January. While across Europe, both Aldi and Lidl have been been testing other third party delivery partnership in Hungary, Ireland, Spain and Italy. In the US, Aldi now offers same day delivery from over 2,000 stores via Instacart. Click & collect (called Curbside) was introduced last summer at 600 stores, with plans to expand to 1,200 stores by the end of 2021. With both click & collect and third party delivery offering more efficient ways to fulfil online orders and discounters general adoption of these methods, its highly likely we will see Aldi in Australia replicate this activity in the near future.
For more insight on Discounters expanding online... Check out our report How will discounters respond to online?