How Aldi boosted retail traffic while reducing its flyer drops
Havas Media Group won the ‘Most effective use of Mobile’ category at The DADI Awards 2019 with its ‘GPS data/customer mapping’ campaign for Aldi. Here, the agency reveals the challenges faced and the strategies used to deliver this successful project.
In Denmark, the distribution of flyers was poised to be taken over by one single company, creating a monopolistic situation that would inevitably translate itself into a steep price increase, calculations put the increase at 40%.
Seeing that flyer distribution was a massive operation in which Aldi was ‘carpet flyering’ (dropping a flyer in every household in any given neighbourhood) in every city where there was an Aldi supermaket without any regard to targeting, the 40% increase would not be sustainable. Moreover, a recent survey in the country revealed that more than 80% of Danes don’t read Aldi’s weekly printed leaflet.
Closing the Flyer distribution operation was out of the question because despite a low share of readers, sales modelling demonstrated a positive ROI for Aldi and other discount / retail chains, despite the low share of readers.
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Taking all of this into consideration, we came to the conclusion that we needed to develop a much more intelligent and cost reduced way to distribute our flyers, we needed to find a way to distribute the flyers in areas where we knew they would convert in business for Aldi, where people would read them and use them, we needed to pinpoint and target our distribution.
Moreover, we also needed to move Aldi into the 21st century with a digital flyer that would attract younger readers, reducing their dependence on printed flyers.
We used data and technology to provide insight to optimize the distribution model for printed retail flyers. This optimization would in turn allow us to reinvest savings into the production of a digital flyer and its subsequent promotion.
This strategy would allow us to intelligently reduce the distribution of leaflets in areas with low or no potential/customers, or ad new area if relevant for each of the individual shops. The idea was to match the distribution area with the actual Aldi customers.
With the savings from reducing the printed leaflets, we initiated a digital transformation for Aldi to give them an online presence – specifically against a younger and more connected target group.
Along with increasing the number of digital readers, the online presence also had the objective of raising Aldi’s general awareness levels, and thereby also increase the number of readers of the printed version.
We started by digitally mapping customers that shopped at each of Aldi’s 189 stores with the help of geo-data. We did this by using mobile app-data from those customers. Once they were mapped pinpointed where they lived thanks to a key insight: their night-time location - if you remained on the same location from 02-04 am, chances where that you were sleeping at home.
We were able to pinpoint where our customers lived, including at the granular level of distances from their closest ALDI Shops: :
Before the operation, the number of flyers that where being distributed numbered 1,227,656. In Q2 we reduced flyers by 310 000, this had such a minimal impact on sales that we could not really link it to the operation. In Q3, with the knowledge, experience and evaluation from the first reduction we applied a second reduction plan (we eliminated 175K) now bringing the distribution down to 742,922 households.
With close to a 50 % reduction in flyering compared to the previous year, some stores did however experience reduced turnover, so after a detailed evaluation of every single shop, including a competitive analysis and other local influential factors, the distribution was raised to approx. 860,087.
We also developed all digital assets for the digital flyer – And launched it all the while updating and optimizing products, visuals, animations etc. on a weekly basis.
- We dropped the number of flyers being distributed from 1,227,656 to 860,087, a 33% reduction.
- We saved ALDI a significant amount of distribution budget.
- The number of readers of the printed flyers increased for the first time in four years by 4.9%.
- The number of readers of the digital version of ALDI’s leaflet increased by 24.1 pct. (9.1 pct. point above target/objective, 60 pct. above target).
Additionally, we managed to reach a totally new segment thanks to the digitalization of the flyer: a much more modern, younger, urban family segment that spends more than the traditional Aldi customer. In this process it instantly became very clear that urban areas had a much higher performance, when being targeted with Aldi’s digital leaflet.