Italy: history and marketing of discounters

Discount Retail Chains in Italy: 50 YEARS OF ASCENT What was the first discount store to open in Italy? What are the marketing strategies that discounters have adopted to make their customers feel less? Why have LIDL shoes been so successful? HOW DISCOUNTS ARE BORN The history of discount stores begins in Germany , after World War II , when the brothers Karl and Theo Albrecht seized the main need of German consumers at a time of great economic difficulty : low-cost products . Thus, starting from their father's small grocery store, the brothers founded ALDI (Albrecht-Discount).

ALDI quickly became a supermarket chain known for its spartan atmosphere and affordable prices, mainly due to the brothers' negotiating skills. In the 1970s, following the example of ALDI, LIDL was born in Germany. The concept is the same: confined spaces in the stores, little choice of products, no mood music. In short, zero frills and reduced costs to the bone.

One of the first Aldi stores in Germany. LIDL is the first discount to arrive in Italy in 1992. Its success, however, at least at the beginning, is not comparable to that achieved in Germany. This LIDL had all the characteristics of the first German discount stores: narrow aisles made of pallets one on top of the other, neon lights, goods of unknown brands with minimal and unattractive packaging inside the boxes. It was, in short, sad and ugly.

Historical collage of vintage photos depicting the first Lidl stores in Italy. Image credits: Lidl Italy Shopping in such a place was mortifying for the Italian consumer. For Italians, in fact, going to the supermarket is not just a necessity: shopping is a beautiful moment, a prelude to the convivial ritual of the table , of tradition and of all those beautiful things that certainly cannot be born between the depressing aisles, the poor lights, and the atmosphere of misery, then typical of the Teutonic discount stores.

Understanding this limit is the key to the success of another discount store, all Italian, which was born in response to LIDL only one year after its arrival in Italy: Eurospin. Eurospin copies the model of the German discount, as regards the convenience of prices , but adapts it to the needs and gastronomic habits of the Italian consumer. In particular, Eurospin focuses on the higher purchase frequency of the Italian consumer compared to the German one, including in its assortment fresh and very fresh products , lacking in the first discount stores, such as fresh bread, quality fruit and vegetables. Furthermore, Eurospin is characterized by a cleaner and more elegant environment, in which the Italian consumer can feel a little more at ease, and includes products with a more attractive packaging , which conveys an idea of ​​quality.

One year after Eurospin, MD, another 100% Italian discount store opens . Other brands followed in the following years, and ALDI, the first in the history of discount stores, also arrived in Italy in 2018. HOW DISCOUNTS WORK What unites all discounters is their business model, based on two fundamental distinctive features. First of these is the reduced assortment of products: we are around 2,000 references against those of traditional supermarkets, which reach 40,000. The advantage of this strategy, in addition to avoiding the paralysis of the consumer during the purchase in the face of an excess of supply, is above all the savings on management costs, due to the presence of few products in stock.

Another feature of discounters is that the vast majority of their products are not from well-known brands, but from the discounter's own brands, the so-called “private labels”. Although they have different invented names depending on the product sector, the private labels all belong to the discount store and therefore involve considerably lower marketing and distribution costs than those of traditional supermarkets.