The Sydney Morning Herald, one of the largest news outlets in Australia, recently made waves with this headline: ‘We like to stick to our knitting’: Aldi rules out collectibles, loyalty programs.” The article starts by discussing a recent collectibles fad in Australia, but it quickly pivots to discuss other things grocers in that country have implemented in recent years: loyalty programs (or what American companies call rewards cards), self-checkout, and home delivery.
We’ve previously discussed home delivery and self-checkout — and we’ll deal with the issue of loyalty programs in a different post — but here I want to touch on how Aldi has responded to the collectible trend, and why. The scenario is a familiar one, not just in Australia, but in the United States, and the United Kingdom. Regardless of the country, Aldi’s response is the same, and for the same reasons.
Let’s start by briefly outlining what is happening in Australia. According to the Herald, grocers like Coles and Woolworths have recently caught onto a craze of selling small collectibles in their stores. Coles, for example, is selling minature toy foods reminiscent of toy foods sold for American Girl dolls in the United States.
Woolworths, on the other hand, is currently selling a range of mini-toys, including figures from Disney’s The Lion King, some of which are going for thousands on eBay. As you might expect, the craze hasn’t always brought out the best in people.
The Herald asked Aldi why it isn’t selling collectibles, too. Aldi noted that it tends to be very deliberate about “anything that adds cost and complexity that could jeopardise our business model and how we’re able to provide our prices.” Aldi’s rep added the words that the Herald included in its title: “We like to stick to our knitting.”
To put it in terms Americans might better understand: Aldi tends to stick with what it’s familiar with.
But I think it goes deeper than that. Aldi as a business — be it in the United States, Australia, the United Kingdom, or elsewhere — is guided by certain core principles. And selling high-popularity collectibles to collectible-obsessed buyers runs against many of those principles.
What principles, exactly? Three come to mind.
- Efficiency. Aldi doesn’t like to waste time or money. That’s why its workers do multiple jobs and why shoppers bag their own groceries and put their own carts back.
- Predictability. As a low-inventory grocery store, Aldi has to be very purposeful about stock. Ideally, it wants to know exactly how much demand it will have so it will know how much to stock. Every store wants this, but the stakes are higher when you have less shelf space. Aldi rarely (although not never) sells products that it expects to draw big crowds in a short time.
- Innovation, not invention. This is an underrated part of what Aldi does. Aldi isn’t a company that invents ideas. It isn’t the first grocer to do most things. It simply takes an existing idea and makes it better. Aldi, for example, wasn’t the first company to have a seasonal rotating inventory, but it has been one of the best companies out there on elevating its rotating inventory to cult status. Likewise, Aldi almost never sells products that don’t exist elsewhere: instead, it takes an existing product and sells a cheaper version of it, sometimes using shamelessly similar packaging.
Stocking collectibles like Woolworths and Coles do would go against all three of those principles. It would hurt efficiency, because workers would have to deal with collectible-hunting shoppers badgering them about what they have or pressuring them to help them acquire them on the side. It would hurt predictability, because the spikes in inventory sales would disrupt Aldi’s regular inventory stocking patterns and create increased headaches for Aldi’s customer service team. And it would hurt innovation, because it would require Aldi to develop an all-new, untested product and promote it in stores, something it doesn’t typically do.
Aldi, it should be noted, does occasionally sell collectibles, like trading cards. But it’s usually a very small part of what Aldi does, and it’s almost always either a tiny niche item or something that is established enough that Aldi has a pretty good idea what it will sell.
For those reasons, I don’t expect Aldi to sell any collectibles anytime soon. On a related note, I still expect Aldi to continue to make a lot of money, because that is something Aldi does do.