March 04, 2010

• Brand value versus brand values in recessionary times

Aldi has just opened in my neighbourhood. For a working mother of 3 - it’s the best news I’ve had in a long time (yes, yes I probably need to get out a bit more). I pottered down there on Sunday morning and knew every second person there, such was the level of local interest. Just five minutes away is our local Supervalu, expensive but good for last-minute shopping on a Friday night. I would say it will be wiped out by Aldi despite their expensive rebranding exercise a couple of years ago that hung on the proposition: “Real Food, Real People”. Unfortunately, feel-good brand propositions such as that one won’t fly when people place more value on real value than they do on brand values. How might Supervalu respond?

Well this situation sums up to me the weakness inherent in much of the branding that emerged during the boom years. The brandmeisters took an existing product or service, and spun it with a cosmetic veneer to suit the zeitgeist.  The actual offering was rarely challenged. The reality is that the core proposition - the actual product or service that is offered - must have an enduring intrinsic benefit and differential in order to succeed. Browsing through Aldi’s shelves, I was struck by how much of the food is produced in Ireland and as a signed-up foodie I can tell you that the quality is exceptional. So the Supervalu’s Real Food, Real People proposition is simply a more expensive version of what Aldi is offering through it’s innovative business model.

So how can Supervalu respond? Well not by trying to wring more mileage out of this weak branding exercise in my view, they have to take a long hard look at what Aldi is actually offering and look at how they can develop a highly differentiated alternative that is actually complementary to, instead of competing with, Aldi. I think the core of this must be their fresh food delicatessan which is weak at the moment. If they actually developed a very strong fresh deli and in-house take-away food offering (always offering value of course) along with a very good fish, cheese and charcuterie counter I think they could claw back considerably. Aldi and Lidl have very limited product lines as well so Supervalu could probably win out on specialist food offerings such as special-dietary needs and so on. The bottom line is, it has to be good value. What would this mean for the Supervalu brand? Well, probably a rebrand for starters

Siobhan O'Dwyer - Strategy

siobhan@threesixty.ie