╠ Allocating consumer costs correctly ╣

I recently discovered the haste with which stock can clear from an Aldi store. If you want that special item that they have every week then you better get in before 11am on the day of launch.

The thing about Aldi is it allocates the cost paid by the consumer accurately. Aldi consumers are not necessarily monetarily rich, but instead time rich. Therefore they can go to the extra effort.

I wondered why Aldi didn't simply raise prices to meet demand. However it goes back to the time rich nature of consumers. Yes, there are people who miss out a lot of the time, however most of their consumers are time rich meaning they can head in early. If they really want the product then they will be in at 9am. So whilst you may have people in throughout the week asking for the product, a lot of them only want to look at it. It's not unreasonable to assume that 90% of people who want the product may be in early on that Thursday.

What makes a good business is to set your costs to the consumer focussed around what they're most willing to pay. Are they time poor, travel distance poor or just money poor. Making sure you align your business with what your customers are rich in means your customers will be overall more satisfied. Another example of this is 7-11 which survives due to catering to time poor consumers.

╠ The Perplexing Case of Aldi ╣

One of the things that has changed since I moved out is that I've been located a lot closer to an Aldi store and well...shopping there is quite an experience.

There has been one thought I've been toying with for the past week though. Does Aldi's neglectful treatment of merchandising actually possibly help them?

My main thought on this came to do with their high seller products. Do you want to buy something from Aldi where it looks like the entire shelfload of stock is still there, or does the fact that it looks like it's selling well further improve your perception of value in a peer pressure type sense?

I keep managing to jump back and forth however I think I may have finally come to a conclusion. Thinking back a full shelf does look better, more professional and more aesthetically appealing. However Aldi's personal treatment reinforces their brand image and associations which are about the fact that they save money by cutting down costs anywhere. The visual manifestation of this further instills the brand image in your mind and makes you believe that these must be the cheapest things around.

So in all it's a bit of a wash consumer wise, so it comes down to the fact that Aldi is saving money doing it this way as well. So as long as it's working for them they should keep their crummy stocking setups.