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Discount supermarkets

Author: James Murray
Grocery items on checkout belt

How discount supermarkets have mastered their marketing

The straightforward approach to marketing that has lead to success in the discount grocery market

There’s no doubt about it, whenever the economy plunges the discounters rise.This is certainly a truism in the world of retail, specifically regarding supermarkets, as the conventionally popular brands have been increasingly overlooked -- making way for the rise of the discount supermarket.

High-level interpretations of how these supermarkets have succeeded in the infiltration of new audiences and market positioning have been published aplenty by the British mainstream press, but the success of any business boils down to smarter details. Economic lapses simply make way for business opportunity. The success of the discount supermarkets has partly been from their frankly sensible business pursuits and straightforward approach to retail and marketing. Here’s our breakdown of discount supermarket success:

Targeted campaigns

Flash sales are commonplace in the discount supermarkets – and these are backed up by “short time only” promotions. The idea of new products featured every time you visit a store puts an end to the predictability of supermarket shopping, and gets people back through the doors. Furthermore, customized promotions allow for an opportunity for exciting creative campaigns. A simple store layout in collaboration with vibrant and changing visual promotions create an appealing shopping experience.

Penny pinching

One of the main reasons for the success of the discount supermarkets is quite simply offering savings in the right places. You won’t often see state of the art technology present in the discount supermarkets – nor would you expect to see it – but this feet-on-the-ground cost saving approach helps pinch any unnecessary expense. As well as very select asset purchasing, smarter retailers are finding other ways to make large savings. Outsourcing elements of marketing, such as print management, to an execution partner can unlock huge savings for many brands, with average savings in the region of 20 to 40 percent on the total marketing print spend category. Outsourcing of digital and creative services, as opposed to hiring in-house, is another technique growing in popularity – and in some cases, even pursuing such services via one sole outsourced provider can be the most sensible move.

Store and Point of Sale layout

When thinking about the POS and store layout of the discount stores, it goes without saying that it tends to be basic and repetitive. The idea is simplicity of merchandising and layouts, a no-frills approach – and with the focus almost solely on pricing. As a result, the discounters are highly functional and less creative than the mainstream supermarkets. As it stands, POS is an area where the discounters spend less and save more, however, if they continue to have rising levels of popularity, we could see the discount supermarkets begin to compete with the creative campaigns of their more conventional competitors.

Pursuing new markets

One reason for their recent success of discount supermarkets has been unlocking new audiences. The middle-class shopper is often familiar with the big name discounters – and many will happily shop there so long as there is some niche appeal. Stocking a variety of higher-end products and executing aforementioned personalized campaigns can widen store appeal to new audience segments. This approach has seen the discounters successfully step on the toes of the traditional supermarket leaders.