A no-frills design approach hasn’t affected the growing popularity of discount retailers. Should supermarkets take note? asks Gina Lovett
If the daily economic lament is to be believed, supermarket retail is suffering. Discount retail, however, is booming. Not only is the consumer spending less, they are setting aside brand pretensions and entering a whole new unadorned retail environment.
Here in the stark aisles piled high with pallets and crates, the traditional retail design principles – from elaborate displays to the familiar overload of product ranges – are unashamedly eschewed in favour of the singular factor of price. Enter Lidl, Aldi and Netto.
So with pecuniary exigency allegedly overtaking premium branding, and single-minded bargain-hunting supplanting genteel discernment, might the highly evolved supermarket retail environment of today become redundant? And, as a result, are the halcyon days of the six-figure branding budget a thing of the past?
Williams Murray Hamm co-founder and director Richard Murray thinks it’s not that consumers are being less discerning, but that they’re making purchasing decisions in terms of how far they want to compromise quality for price.
‘Any purchase decision is based on the quality/price equation: people have to weigh these two things up. It’s not that they are less discerning, it’s that they are trying to achieve the best compromise in terms of price. It looks like they may not be prepared to trade down to the quality of Sainsbury’s Basics or Tesco Value ranges. I mean, if you buy the meat produce of those ranges, you know that it’s not going to have the highest farm standards, is it? The discounters are able to offer fairly decent-quality brands for a lower price, albeit in a more simple retail environment,’ he points out.
Landor director of corporate branding for the EMEA region Andrew Welch goes some way to support Murray. ‘Discount is the first area of budget, with a clear and purposeful role in its segment, but we’d be better served talking about value, which for consumers means provenance and authenticity as much as price. Design has a role in communicating these sorts of cues. Authenticity is at the heart of what retail should be striving to create.’
Those commentating on the recent rise of retailers like Aldi and Lidl have noted that if discounters can deliver on quality, they may convert shoppers in the long term. According to one report, ‘It doesn’t matter that the stores are basic – some are shabby, and open products are strewn on shelves. If they can make the best of their stores, then the price and quality will shine through.’
For those who have never set foot in a Lidl, Aldi or Netto, branding and store environment are streamlined. Aldi says it avoids ‘inflated brand names, fussy presentation and unnecessary frills’, while Lidl attributes its success to its ‘clean and bright shopping environment’, with ‘efficient merchandising and focused ranges’.
Netto, which is undergoing a refurbishment programme, says it has ‘instigated more discipline in its store layout’, while working with its consultancy and customer focus groups to implement ‘new hanging signage across all stores, and to implement, with Sales Activation Solutions, in-store platforms including entry gate media, bus stops and six-sheet illuminated posters’.
Retail consultancy JHP creative director Steve Collis agrees design doesn’t have to be costly, nor be about ‘gold tassels’. ‘It can be as simple as a can of emulsion, a good layout and a system that deals with getting volume of goods in and out,’ he says, but adds, ‘Planned layouts, use of light and colour, messaging and signage still need to be properly designed to be effective.’
The debate seems not to be whether discounters are well or poorly designed, but how other retail clients are responding to changing consumer habits, and how this could impact on retail design.
Welch predicts that as demand for new and additional products and services – ‘innovation in its purest sense’ – grows, discount retailers will need to find alternative ways of embracing customers beyond the retail experience.
He says, ‘If they want to create a permanent relationship with their customers, they need to be asking “What else can we be doing for our customers?”.’
One final point: while marketing budgets may be falling, it’s worth remembering that marketing directors are buyers of a service too, and they, like anyone else, are looking for value and authenticity.
Welch says, ‘The days of irresponsible design and application are gone. It is more important than ever that design groups strive to demonstrate the return on investment in what they are delivering, and show the value that can be derived from design.’
Keeping design in-house
• TNS’s recent analysis of grocery market share data reports that discounters have hit an all-time high in the UK. It attributes Aldi’s growth entirely to new customers
• Supermarket discounters are forecast to grow by 50% over the next four years. As a sector, its total value is predicted to rise from £4.5bn to £7.5bn by 2012
• Lidl says it doesn’t use external consultancies, instead opting to use its in-house advertising department for all creative work
• Aldi did not disclose any consultancy appointments, but is known to print more than one million leaflets communicating its special offers in-store every week
• Netto last year dropped Scotty the Dog from its logo, retaining it for ‘softer marketing such as store openings’. It also re-designed and relaunched its carrier bags, adding straplines like, ‘I love knowing I paid the lowest price’, using a design inspired by Milton Glaser’s classic I?NY logo
• Netto is also redesigning its website, and has an ‘ongoing packaging design programme’ with its Simply Irresistible range introduced last year, designed by Public with Netto’s in-house marketing team