Bill Bishop, chief architect of retail consulting firm Brick Meets Click, tells supermarkets they can remain competitive without slashing prices to match discounters.
Bishop, who presented this perspective at the National Grocers Association Show in February, said attempting to match prices on all items all the time is a losing strategy — especially because data from Circular Logic LLC shows supermarkets regularly beat discounters on price for items on special.
“Supermarkets already have the necessary tools in their arsenal in the form of loyalty data and the weekly circular,” Bishop said in a news release. “By combining them in the right way, they now have the opportunity win the shopper and the sale — without destroying their margins and their profitability.”
In order to get credit for those prices, supermarkets need to use their loyalty data to understand what items are most important to which shoppers and personalize their circular with those preferences in mind.
“Grocers have to adapt to Aldi and Lidl’s impact on pricing in the market, but lowering prices to fight the competition on general price reputation is counterproductive,” Bishop said in the release. “Shifting the goal to winning the individual shopper can be a much more effective and profitable strategy, and the good news is that now there’s a way to do it.”