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Aldi_v3_03_08_14 - amended 14_09_14
Transcript of Aldi_v3_03_08_14 - amended 14_09_14
Why are we here, what are we doing?
The Aldi Specials business
Review of current performance – how are we doing?
Rebuilding the share - where do we want to be?
Improving the Offer – how do we step change our performance?
The Specials Team
Camera, optical & eyewear
Computers & accessories
Audio, video & batteries
Stationery, office needs & gift wrap
Car & Bike
Leather goods & umbrellas
Suitcases & bags
Specials sales have grown from £283m in 2005 to £635m at the end of 2013. This is against a backdrop of economic uncertainty and flat non-food market performance
Special Sales (£)
Special Contributions (£)
Specials share in 2013 ended at 13.20%. The decline since 2007 can be attributed to the accelerated growth of core range and wider economic factors affecting consumer spending habits.
Rise of new discounters
Sale of PCs
Share since 2010
Why This Matters
Specials share planning
Margin expectation doesn't increase
Share grows through….
Line cap to support stores
Increased average item value is key
If we grow this then line numbers can further decrease.
Why are we selling specials?
too many products per table
Specials are a nightmare
What’s our Strategy to improve the Specials Offer?
Market data providers are currently being trialled to assess their suitability
Aim is to replicate the success seen in Core categories
Category Reviews & Key Event Wash Ups
Category reviews to be completed from 2014 in line with Core Range
Each BD will present review to GMD’s covering their highest value Commodity Group by UK sales
Reviews will incorporate International best practice and the core range structure to ensure consistency
Key event wash ups to be presented to MD Buying + GMDs to cover main themes throughout the year (Back To School, Cycling, Halloween, Fathers Day etc.)
Product Design & Tiering
Brand guidelines are currently being reviewed across all CGs.
In addition a number of brand tiers are being investigated and rolled out where there is a clear opportunity to add value to the existing range.
Price Marked Packs
Price marked packs are commonly used in other dedicated non-food retailers such as John Lewis, Next, The Range and Dunelm Mill
“Making Specials special”
Hanging Textiles were price marked from 2005. Other areas such as books and non-electrical kitchen items now added
The roll out of Price Marked Packs will be extended to all relevant products throughout 2014
Product Quality & Benchmarking
Competitor benchmarks are currently being used at tender stage to assess specification levels and ensure we have the appropriate discount to the market.
Proposed New Process
Product Quality & Benchmarking
Specials share growth must come from the development of themes which will lead to a reduction in line numbers;
The most successful sell through rates come from a maximum of 4 themes on a Thursday (no more than 45 lines) and 2 themes on a Sunday (no more than 25 lines)
A line cap of 70 lines per week (excluding chiller and freezer) will be implemented from 2014
£5m sales / maximum 4 themes.
no more than 45 lines
No minimum sales / minimum of 6 lines. Used to ‘top up’ on sale dates
£3.2m sales / maximum of 2 themes.
no more than 25 lines
Following the creation of these powerful themes our communication needs to embed the understanding of Thursday and Sunday as key specials days, as is the case in other Aldi countries.
Results show TV advertising increases specials sell through by 7.6% over the first week
The ROI on TV advertising for specials is 3.96 vs. 3.71 for core range
Specials advertising budget for 2014 agreed at £10.5m
Plan includes promotion of c40 themes via TV, Radio and Press
Specials leaflet and Non Food TV adverts have been redesigned
New TV format
New Leaflet format
Warranties and After Sales Service
3 Year Warranty remains a key selling point, encouraging more customer buy-in to our own branded products
Consumer awareness of our warranty and how it works remains low. Advertising are reviewing ways to promote the offer across all channels with particular emphasis on in store POS, highlighting the added value that we include as standard vs. the competition
The new Customer Service Department opened in January 2014 and has step changed our after sales service, ensuring our suppliers fulfil their current warranty obligations and providing our customers with an improved ownership experience for each special item
Asian Office (AO) & Logistics
What is the Asian Office (AO)?
AO are working with the UK BDs to identify suitable national products to be tendered directly to AO from 2014
QR Codes & Product Videos
Increased focus on QR codes across non food specials range
Development of product support videos to add value and drive purchase
Effective merchandising remains a key pillar in driving specials performance and growing our % share
Corporate Buying, Store Operations and the National Merchandising committees are currently reviewing specials merchandising equipment, merchandising plans, packaging design and the use of display models with a view to implementing agreed recommendations from Q1 2015
Market Data &
Did you know..
Firework sales in 2014 are over £3.5 m making us over £1m in profit.
To match the profit we make on yarn…. yes this stuff…
We would have to sell 19 million units of UHT Skimmed Milk!
Our DIY business is now worth over £75million per year! We sold a whopping 130,000 electric drills in 2013!
Did you know that Compression underwear (you know that stuff you always tidy) makes us £500,000 in sales and £230,000 in profit!
That’s enough to buy 5 of these flats and maisonettes..
We would have to sell a huge 8.7 million tins of baked beans to match the profit we make on just one promotion of gardening gloves.
If you averaged out our sales in Bedding in 2013 it would equate to £32,000 per day
Exciting new products
Great new merchandising solutions
Price marked packs
SHARE CORE RANGE
PROFIT (£) CORE RANGE
PROFIT (£) SPECIALS
PROFIT (£) SEASONALS
High Value Display Trial illustration
The current business forecast shown below assumes specials share will increase to 16% by 2017 whilst maintaining the current Net Profit (NP) target of 33.50%.
*Total specials line count Food + Non Food Specials. Capped at current level