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Are deep discounters capturing new customers for good?

Evidence in the UK suggests "curious bargain hunters" do not necessarily convert to loyal shoppers.
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When the recession hit late last year and consumers began to shift to discount brands and stores, a debate began in the marketing community whether this would be a permanent shift. Many marketers said the new emphasis on bargain hunting was temporary and fickle consumers would resume their old habits once things got better.

But others talked about a deeper shift that would influence shopping behavior for a long time to come. Even Andy Bond, chief executive of UK supermarket giant ASDA, was quoted saying, "This is not a blip and we will return to where we were before. This downturn will shape a whole generation of consumers for whom frivolity is no longer acceptable and frugality becomes cool."

All agreed that a shift was on, and discounters had a huge opportunity to lure and win a new customer base. But a new article from Marketing Magazine reports that two things have happened, at least with discounter Aldi, that cast some doubt on the “permanent shift” theory.

First, according the report, while economic concerns drove consumers to the discounter, shoppers did not necessarily like what they saw. And the “big boys” quickly adapted to the new environment and countered any initial price advantage.

Packaging designers looking down the road to predict future behavior and trends have been watching this debate with great interest. As the report states, whether permanent or temporary, retailers should not rely on continuing economic uncertainty to drive brand loyalty.




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