A special offer alone is no longer enough to win the hearts of customers. That is why German discounters are now increasingly struggling with unusual shops because of the sympathy of young consumers.
Düsseldorf (dpa) – Half-page specials and classifieds ads are no longer a commercial.
In order to be present in the minds of a desirable young clientele, German discounters and drug chains are increasingly finding themselves in unusual places. The spectrum ranges from Aldi's rock concert shop to cash-strapped cash in the "Celebrity Big Brother" reality show.
"Discounters want to live in the midst of young people's lives," describes Martin Fassnacht's trade strategy at WHU Business School in Düsseldorf.
Particularly at major music festivals in Germany, Aldi, Lidl and co. Whether Rock am Ring (Lidl), Wacken (Kaufland), Southside (Aldi, Rossmann) or Parookaville (Penny): Almost everywhere this year, at least one of the dealers has launched visitors to huge pop-up stores to provide everything from canned beer to sunscreen.
The effort is enormous. Construction of the festival's branches, which are only open for a few days, begins weeks before the event. Planning often takes months. Because there are by no means small shops. With areas up to 2000 square feet, pop-up shops are often twice the size of the average store. And a lot of this is happening differently than usual.
This varies from opening time – some stores are open daily, to an assortment of products. Although it is much smaller than in ordinary shops, but tailored exactly to the needs of the clientele: with a wide range of grilled specialties and chilled drinks, as well as sunblock, raincoats and sleeping bags. Because demand often depends on the weather. "On the first day, visitors packed raincoats and rubber boots, and just a few hours later fitted themselves with sunglasses and ice cubes," says Katrin Lasseck of Aldi Süd, describing her experiences.
Demand is one way or another. At the Southside Festival, Aldi Süd counted about 62,000 purchases over 65 business hours in 16 cash registers. Among other things, 45,000 liters of beer, almost 29,000 pieces of Pizza Margherit and almost 24,000 wheat rolls were sold. A total of 50 truckloads of goods.
But sales aren't everything. Aldi Nord drove visitors on a tourist train across a large festival area. Lidl has offered 15 new generation bands the opportunity to perform at Rock am Ring on "Lidl-Stages". Cooling rooms and lounges with sofas and armchairs are, in fact, almost a standard dealer's option.
Is it worth the effort for Aldi and Co. Probably not. Although the companies themselves do not provide any numbers. Discounter Penny, who joined Parookaville and Highfield this year, points out, "In terms of festival engagements, profitability is not a top priority, and everything is about image and branding."
Sales expert Fassnacht is convinced: "Financially, such festival sales are probably a loss for retail chains, so they don't make money, and the cost of setting up short-term stores is simply too high." But it's not a negative. After all, investing in customer relationships is definitely worth it in the long run.
The pioneer of the festival trend was according to Lidl. "The idea of opening a tent branch at the festival was first realized in 2014 as Germany's first hurricane food vendor," it said. This year Lidl was present at Rock am Ring and Parallel Rock in the park with shops.
The Rossmann drugstore chain has been at festivals since 2017. "The festival presence is an important pillar of our marketing activities. At these events, we are very well able to reach millennial interests for our target group," the company emphasized. He seems to bypass that. Aldi Süd and Kaufland also showed their colors at festivals for the first time this year.
Large-area Kaufland opened the "metal market" at the Wacken Festival. "We were very close with our customers," the company was pleased afterwards, but left open whether the experiment should continue next year. Aldi Süd spoke of a successful premiere and wants to continue anyway. Aldi Nord has already boarded the 2018 festival train.
However, Rewe Penny's daughter was no longer enough for a festival engagement this year. To capture the attention of young audiences, the Rewe Branch has opened another short-term store at Celebrity Big Brother Camp, in addition to the Parookaville Festival Stores and the Highfield Festival. For two weeks, there was probably the smallest discount store in Germany: only 12 square meters and intended for up to 12 customers. The discounter wanted to convince the young target group of themselves. "So we decided to go where we find this target group," the company said.
For a Fassnacht trade expert, the strategy is easy to understand. "It will be noticed – especially among young people – it will probably cost a lot of money, but it can take quite a long time."