Comparing Traditional and Online Grocers

Solution Preview

Amazon grocery is the on-line grocery division of Amazon.com. Aldi is a brick and mortar grocery. Compare and contrast Amazon and Aldi on the following points: Demographics, Socio-cultural, Economics, Advertising, Better Positioned, Recommended Strategy for the better positioned, and Recommended "Corporate Citizen" action for the better positioned.

Q1 Using the seven issues mentioned above, explain how each organization has interpreted these trends and changes in its choice of strategy?

Aldi is a brick and mortar grocery store chain with locations throughout the U.S. and Europe. Amazon grocery is strictly an online store. Aldi offers lower priced foods. Amazon offers the convenience and time savings of shopping online. The demographics of customers who buy products at each of these stores is very different. Discount pricing is important for Aldi customers. They are likely to be budget conscious, lower and middle income consumers, families with limited incomes, young adults with limited budgets, and elderly living on limited incomes. Those who shop on Amazon are likely to be very busy, having higher incomes, which makes cost less important. However, shoppers can receive free shipping for orders over $25, so cost may still be somewhat of a factor. The pricing advantage of Amazon grocery is the ability to save money by purchasing items in bulk. This makes it an ideal source for families who need to purchase multiples of the same item.

Amazon grocery advertises through social media and email marketing. Aldi advertises through printed materials, both in-store and through bulk mailings. Amazon is positioned somewhat uniquely, as a provider of bulk food items at slightly lower prices. This strategy allows the organization to compete with higher priced online food stores and to capture additional revenues from Amazon shoppers. Aldi is positioned as a low cost, budget grocery. The organization meets the needs of a broad range of consumers, for whom price is a major concern. Customers pack and bag their own groceries, which is what helps the store offer some of the lowest prices. The store has also recently added its own brand of health ...