Innovator versus follower? How Aldi’s self-service checkout move could backfire

After watching rival supermarkets’ self-service moves from the sidelines, discount grocery chain Aldi is now trialling self-serve checkouts at 10 of its stores in NSW and is considering a national rollout.

It’s a game-changer for Australia’s lowest priced supermarket, one that will address a huge customer criticism of Aldi – long checkout queues.

“Anecdotal feedback from the first day of the trial was overwhelmingly positive, with more than half of our customers opting to use the new Self-Checkouts,” the supermarket chain said in a statement on Thursday.

But the move also comes a decade after rivals Coles and Woolworths bought into self service, and could backfire on the German giant, which might get left behind as competitors try to abolish checkouts all together.

Aldi’s big risk

It’s what retail expert and QUT Professor Gary Mortimer calls a classic example of a “follower strategy”. Aldi has let Coles and Woolies make all the mistakes before looking to cash in on an already proven technology.

“[Aldi] have sat back, watched what’s happened, and [now they’re] improving on what the others have done,” professor Mortimer said.

Aldi will benefit from lower equipment costs and will be on the watch for self-service theft, something that cost Coles and Woolworths billions of dollars when they first introduced this technology.

It’s not the first time the German giant has followed its rivals, earlier this year it adopted online shopping for its special buys range, years after Coles and Woolworths moved into the e-commerce market.

But the follower strategy also has disadvantages when compared with the “innovator model” that Woolworths uses, professor Mortimer said.

“The risk of a follower strategy is that you wait 20 years, do what everybody else is doing, but everyone else is already a decade ahead of you and looking at scan-and-go options,” Professor Mortimer said.

There’s debate right now about whether checkouts have much of a future at all, with the likes of Amazon already rolling out scan-and-go technology at supermarkets across the United States.

Woolworths is following suit in Australia, with its own trial of checkout-free technology that could change the way we buy food Down Under.

“Once [Aldi] establish their self-service checkouts the majors could be doing something completely different,” Professor Mortimer said.

Woolworths hopes that checkout-free supermarkets could be a great way to grab market share by offering market-leading convenience and shopping experience.

Why Aldi won’t be worried

But that’s unlikely to worry Aldi, which isn’t interested in being the first supermarket in Australia to roll out new technologies.

“We are well known for taking our time to make carefully considered business decisions to ensure we never compromise on our low-cost business model,” the company said on Thursday.

“This allows us to consistently provide our customers with high quality groceries at incredibly low prices.”

In other words, Aldi knows why its customers shop there: low prices.

Investing in costly technologies and innovative strategies could create new ways for its customers to shop conveniently, but it could also put their biggest strength in jeopardy.

Instead, by following the market, Aldi can improve by gradually while maintaining the lowest prices in the market, professor Mortimer said.

“A common criticism of Aldi is the fact that while they are good products and great quality, there’s long lines at checkouts,” he said.

“Putting these checkouts in actually mitigates that criticism.”

The post Innovator versus follower? How Aldi’s self-service checkout move could backfire appeared first on The New Daily.

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