The popular customer service Aldi refuses to offer - and why

Olivia Lambert
·News Editor
·5-min read

While Woolworths and Coles supermarkets dominate the booming online delivery market, Aldi are missing completely from this key grocery battleground.

According to market research company Roy Morgan, supermarkets have seen an increased demand in online deliveries during the coronavirus pandemic.

Before the pandemic, three per cent of Australians bought their groceries online, with Woolworths gaining about 57.4 per cent of the total online spend in the year prior to March 2020.

However in the first three months of 2020, that rose to 60.1 per cent.

Coles grew its total share of all online supermarket spending to 33.1 per cent in the first quarter of 2020, up from 26.1 per cent over the previous year.

IGA, which previously did not offer an online delivery service, pushed its way into the online market last year.

“We were not really in [online] for IGA and the retailers weren’t that interested in it, but all of that changed at the beginning of the pandemic,” Metcash CEO Jeff Adams told the Sydney Morning Herald in December.

“And suddenly all the IGA operators became interested.

"They didn't really see the point in it before, but now the whole thinking around it has changed and now they're actually pushing us to go faster."

Why Aldi hasn't jumped into online shopping

A cashier scans groceries in Aldi.
Packing your own groceries helps Aldi keep product prices low. Source: Getty

Professor Gary Mortimer, a retail expert from the Queensland University of Technology, told Yahoo News Australia the success of Aldi's business model is due to it being different from its major competitors.

He says going online is not as simple as flicking a switch, and it could drive up the cost of your favourite Aldi bargains.

"There are costs involved in picking and packing and delivery, as well as setting up distribution centres," he said.

Professor Mortimer added Aldi stores were set up specifically to keep the cost down for consumers, which is why shoppers need to pop a gold coin into the trolley and pack their own groceries.

The retail expert said with the low percentage of Australians actually buying their groceries online, the juice was likely not worth the squeeze.

"It's a lot of capital investment into infrastructure and online capabilities to chase about five per cent of the online market," he said.

Woolworths and Coles are already advantaged in the online space, with more advanced distribution channels, their own trucks and more staff.

"If Aldi were to go online it would literally be starting from scratch. While they do have the money to do that, it's never been part of their model," Professor Mortimer said.

"Once you start to become like the others, you lose that point of differentiation."

The Aldi special buys online opportunity

Professor Mortimer said it was a smart move from Aldi to focus on what it does well in store. However, he said the supermarket could consider online shopping and delivery for specific items.

"They probably don't have the infrastructure to go online and would only do so if they increased their costs and prices to their consumer," he said.

"In saying that, there may be an opportunity to have their special buys online that could be distributed from a central distribution centre rather than in store.

"That rocking chair or ski gloves could be sold online and that merchandise could be sent out using a third party like Australia Post or Toll. Distributing and moving food however is more challenging because they are perishables."

A person walks past an Aldi supermarket.
Aldi has not ruled out online shopping completely. Source: Getty

Professor Mortimer suspected if Aldi offered special buys online, customers would for example spend $29 on the item and an additional fee for postage to keep overall costs down.

He also suggested Aldi could toy with the idea of a membership of $12 a month for free online delivery.

"It's an avenue that may be of interest, but ultimately part of the experience of shopping at Aldi is that centre aisle and the crowds that rush in twice a week in fear of missing out on limited quantities of an item," Professor Mortimer said.

"Certainly the challenges of going online, you lose sometimes those incremental and unplanned purchases. A customer might go in to buy the rocking chair but come out with three other different items.

"When you shop online you are shopping with the purpose of buying that rocking chair and nothing else, so you do lose those impulsive purchases."

Could Aldi introduce online shopping?

Despite not offering online shopping and delivery at the moment, it doesn't mean it's a service that has been ruled out entirely.

Aldi declined requests from Yahoo News Australia to discuss a possible venture into online shopping.

Yahoo News Australia understands Aldi would consider offering an online experience to customers once it had a business model that allowed the supermarket to deliver the service without compromising the price of products.

The grocery giant's priority is its commitment to the consistency of price, product and experience for customers.

Yahoo News Australia believes the supermarket will act when it has a plan that will see prices remain low, but in the meantime will continue to focus on its in-store business of offering groceries at affordable prices.

Do you have a story tip? Email: newsroomau@yahoonews.com.

You can also follow us on Facebook, Instagram and Twitter and download the Yahoo News app from the App Store or Google Play.