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Retail Disruptors: The Spectacular Rise and Impact of the Hard Discounters
Hard discounters are stores that sell a limited selection of consumer packaged goods and perishables - typically fewer than 2,000 Stock Keeping Units - for prices that are usually 50-60% lower than national brands. The best known hard discounters are Aldi and Lidl, but global brands include Trader Joe's, EuroSpin, Biedronka, Netto and Leader Price. Their rise has been monumental; they have irrevocably changed the face of retail in Europe and Australia, and are making steady inroads into the US. Retail Disruptors explores the very real threat that hard discounters pose to traditional retailers and brand manufacturers.
Retail Disruptors is the first book that explores this upheaval, providing expert insight into the business models of the leading hard discounters, and what mainstream retailers and brand manufacturers can do to remain competitive in the face of disruption. Meticulously researched by two of the leading authorities in retail strategy, private labels, branding, and hard discounting, Retail Disruptors is essential reading for all brand manufacturers and retailers who want to retain the competitive edge.
Retail Disruptors is the first book that explores this upheaval, providing expert insight into the business models of the leading hard discounters, and what mainstream retailers and brand manufacturers can do to remain competitive in the face of disruption. Meticulously researched by two of the leading authorities in retail strategy, private labels, branding, and hard discounting, Retail Disruptors is essential reading for all brand manufacturers and retailers who want to retain the competitive edge.
264 pages, Paperback
Published October 30, 2018
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Displaying 1 - 8 of 8 reviews
January 25, 2022
Read the parts I was interested in, got what I wanted to know. Overall a great book.
Aldi and Lidl, and the rest of the lot have built a very interesting franchise that have set their eyes on one goal - to reduce final price of a basket a customer has when they leave a store. Every part of the store is optimised to this goal. These hard discounters found a way to make their products cheaper and better for the customer. They did it by changing the business model. It seems rather apt that the phenomenon emerged from Germany.
Aldi and Lidl, and the rest of the lot have built a very interesting franchise that have set their eyes on one goal - to reduce final price of a basket a customer has when they leave a store. Every part of the store is optimised to this goal. These hard discounters found a way to make their products cheaper and better for the customer. They did it by changing the business model. It seems rather apt that the phenomenon emerged from Germany.
June 12, 2019
While I must admit that I did not know the precise definition of a hard discounter when I started this book, it did not take long for me to realize that this was the sort of book about logistics, and moreover a logistical strategy, that I knew I was going to enjoy a lot. I don't know how many other people are really going to love this book, though. This is a very important book to read if one is working for a grocery store that is threatened by the addition of an Aldi's or Trader Joe's or Lidl in one's neighborhood and wants to know what to do about it. How many people are in that position though? How many Safeway store managers are going to be going to their local libraries to read an obscure book that deals with the corporate strategies of different types of chains in Europe, North America, and other countries? As I said before, I enjoyed this book because I love reading about logistics and logistical strategies, but if you don't have that sort of interest this book is probably going to be a bit dull for you.
This volume of between 200 and 250 pages has twelve chapters that looks at various aspects of the history and strategy and proper response to hard discounters mostly based out of Europe which are seeking to expand their operations and market share around the world. The book begins with a list of figures, tables, abbreviations, information about the authors as well as a preface and acknowledgements. After that the authors discuss how hard discounters, who seek to reduce grocery prices to extremely low levels while maintaining high quality, are disrupting traditional grocery stores (1). This leads into the first part of the book, which discusses the strategies of these companies (I), including an understanding of the hard discounter model (2), the strategies of Aldi, Lidl, Trader Joe's, and DIA (3), the success of these firms around the world (4), and the way they wish to dramatically affect the American grocery landscape (5). After that the author examines competitive counterstrategies for conventional retailers (II), specifically how retailers are affected by hard discounter entry (6), how retailers can compete with these firms (7), and strategies on reducing procurement costs (8). The authors then move to discuss brand manufacturer strategies against hard discounters (III), including the competition between national brands and private labels (9), how brands can cooperate with private labels (10), and how national brands can co-opt hard discounters and generate sales in their stores (11), after which the book closes with a look into the future of disruptive retailing, notes, and an index.
Why was this book so interesting to me? For one, the book talked about the way that a particular type of firms has managed to make their stores dramatically more efficient through limited brands and low labor costs that also meets the desires for low prices and high quality for its customers. Such a combination can be deeply threatening in a world where gross margins for conventional grocery stores are so low and where the automatic first response of many retailers is to ignore hard discounters until their market share is such that stores feel it necessary to slash costs as a way of competing on the area where hard discounters are at their strongest. The authors suggest a better response is to mimic the blue-ocean strategy of hard discounters and increase quality and make for a more enjoyable shopping experience that is clearly differentiated from the low-cost one adopted by hard discounters. Admittedly, I do not know of any Aldi or Lidl store near me, but if one is built, I will definitely have to check them out and see what kind of experience it is.
This volume of between 200 and 250 pages has twelve chapters that looks at various aspects of the history and strategy and proper response to hard discounters mostly based out of Europe which are seeking to expand their operations and market share around the world. The book begins with a list of figures, tables, abbreviations, information about the authors as well as a preface and acknowledgements. After that the authors discuss how hard discounters, who seek to reduce grocery prices to extremely low levels while maintaining high quality, are disrupting traditional grocery stores (1). This leads into the first part of the book, which discusses the strategies of these companies (I), including an understanding of the hard discounter model (2), the strategies of Aldi, Lidl, Trader Joe's, and DIA (3), the success of these firms around the world (4), and the way they wish to dramatically affect the American grocery landscape (5). After that the author examines competitive counterstrategies for conventional retailers (II), specifically how retailers are affected by hard discounter entry (6), how retailers can compete with these firms (7), and strategies on reducing procurement costs (8). The authors then move to discuss brand manufacturer strategies against hard discounters (III), including the competition between national brands and private labels (9), how brands can cooperate with private labels (10), and how national brands can co-opt hard discounters and generate sales in their stores (11), after which the book closes with a look into the future of disruptive retailing, notes, and an index.
Why was this book so interesting to me? For one, the book talked about the way that a particular type of firms has managed to make their stores dramatically more efficient through limited brands and low labor costs that also meets the desires for low prices and high quality for its customers. Such a combination can be deeply threatening in a world where gross margins for conventional grocery stores are so low and where the automatic first response of many retailers is to ignore hard discounters until their market share is such that stores feel it necessary to slash costs as a way of competing on the area where hard discounters are at their strongest. The authors suggest a better response is to mimic the blue-ocean strategy of hard discounters and increase quality and make for a more enjoyable shopping experience that is clearly differentiated from the low-cost one adopted by hard discounters. Admittedly, I do not know of any Aldi or Lidl store near me, but if one is built, I will definitely have to check them out and see what kind of experience it is.
February 16, 2020
Background:
- Insight into an industry that we rely so heavily on, day after day - discount supermarkets
- Covers hard discounters like Aldi and Lidl but also upper end chains like Trader Joes
Thoughts:
- Low SKU, High Margin, High-Quality products from Aldi + Lidl were impressive. Even food manufacturers unanimously agreed that their house brands were not just the cheapest, but also the best in quality. Amazing.
- Consumers may scoff at these discount chains, only giving them a shot during recessions. But these same consumers then get hooked on the quality and value for many. Most stay even after the recession ends.
- Aldi's 20 NO Rules reminded me a lot of Apple's lack of reverence for traditional market research. If you're doing what everyone else is doing, how can you get extreme results?
- Trader Joe's service culture is amazing. Go listen to the Freakanomics podcast on Trader Joe's for a better elaboration.
Key Takeaways:
- The high volume, high quality, low SKU house brand tactics of these hard discounters are not novel. Amazon too is moving in to this direction. At the other end, we're seeing a huge number of niche D2C brands popup on shopify. Mid sized brands are going to get hammered. Consumers are so spoilt for choice right now.
- Insight into an industry that we rely so heavily on, day after day - discount supermarkets
- Covers hard discounters like Aldi and Lidl but also upper end chains like Trader Joes
Thoughts:
- Low SKU, High Margin, High-Quality products from Aldi + Lidl were impressive. Even food manufacturers unanimously agreed that their house brands were not just the cheapest, but also the best in quality. Amazing.
- Consumers may scoff at these discount chains, only giving them a shot during recessions. But these same consumers then get hooked on the quality and value for many. Most stay even after the recession ends.
- Aldi's 20 NO Rules reminded me a lot of Apple's lack of reverence for traditional market research. If you're doing what everyone else is doing, how can you get extreme results?
- Trader Joe's service culture is amazing. Go listen to the Freakanomics podcast on Trader Joe's for a better elaboration.
Key Takeaways:
- The high volume, high quality, low SKU house brand tactics of these hard discounters are not novel. Amazon too is moving in to this direction. At the other end, we're seeing a huge number of niche D2C brands popup on shopify. Mid sized brands are going to get hammered. Consumers are so spoilt for choice right now.
March 26, 2019
While the book indicted it was a study of the rise of "hard discounters," it really is just an economic study of how a German economic giant, Aldi gave rise to a new group of retailers. According to the authors hard discounters offer few products in smaller spaces with an emphasis on quality and their own lines of products, the perfect example is Trader Joe's in the United States that have a dedicated clientele. The book is really of interest only for those interested in retailing and retail economics.
December 9, 2019
As a consumer analyst, i found this extremely insightful. The flywheels are a useful tool in understanding the logical sequence that leads to fantastic outcomes for the top hard discounters. Affordability is such a major issue globally, understanding and replicating the success of hard discounters has tremendous global utility.
September 2, 2022
A very academic book in nature and not an enjoyable read. There is good data and good background - but this is an academic research paper that is very dry. I read it in conjunction with Trader Joe's. There are some good learnings and lessons, but this is only useful to those who are researching the grocery industry.
December 8, 2020
I find this book extremely insightful. And about discount codes, coupons and cashback websites I think the persian website takhfifan would be an example for reference.
February 18, 2019
Great book. Read again.
This entire review has been hidden because of spoilers.
Displaying 1 - 8 of 8 reviews