Retail Disruptors: The Spectacular Rise And Impact Of The Hard Discounters, by Jan-Benedict Steenkamp with Laurens Sloot
While I must admit that I did not know the precise definition of a hard discounter when I started this book, it did not take long for me to realize that this was the sort of book about logistics, and moreover a logistical strategy, that I knew I was going to enjoy a lot. I don’t know how many other people are really going to love this book, though. This is a very important book to read if one is working for a grocery store that is threatened by the addition of an Aldi’s or Trader Joe’s or Lidl in one’s neighborhood and wants to know what to do about it. How many people are in that position though? How many Safeway store managers are going to be going to their local libraries to read an obscure book that deals with the corporate strategies of different types of chains in Europe, North America, and other countries? As I said before, I enjoyed this book because I love reading about logistics and logistical strategies, but if you don’t have that sort of interest this book is probably going to be a bit dull for you.
This volume of between 200 and 250 pages has twelve chapters that looks at various aspects of the history and strategy and proper response to hard discounters mostly based out of Europe which are seeking to expand their operations and market share around the world. The book begins with a list of figures, tables, abbreviations, information about the authors as well as a preface and acknowledgements. After that the authors discuss how hard discounters, who seek to reduce grocery prices to extremely low levels while maintaining high quality, are disrupting traditional grocery stores (1). This leads into the first part of the book, which discusses the strategies of these companies (I), including an understanding of the hard discounter model (2), the strategies of Aldi, Lidl, Trader Joe’s, and DIA (3), the success of these firms around the world (4), and the way they wish to dramatically affect the American grocery landscape (5). After that the author examines competitive counterstrategies for conventional retailers (II), specifically how retailers are affected by hard discounter entry (6), how retailers can compete with these firms (7), and strategies on reducing procurement costs (8). The authors then move to discuss brand manufacturer strategies against hard discounters (III), including the competition between national brands and private labels (9), how brands can cooperate with private labels (10), and how national brands can co-opt hard discounters and generate sales in their stores (11), after which the book closes with a look into the future of disruptive retailing, notes, and an index.
Why was this book so interesting to me? For one, the book talked about the way that a particular type of firms has managed to make their stores dramatically more efficient through limited brands and low labor costs that also meets the desires for low prices and high quality for its customers. Such a combination can be deeply threatening in a world where gross margins for conventional grocery stores are so low and where the automatic first response of many retailers is to ignore hard discounters until their market share is such that stores feel it necessary to slash costs as a way of competing on the area where hard discounters are at their strongest. The authors suggest a better response is to mimic the blue-ocean strategy of hard discounters and increase quality and make for a more enjoyable shopping experience that is clearly differentiated from the low-cost one adopted by hard discounters. Admittedly, I do not know of any Aldi or Lidl store near me, but if one is built, I will definitely have to check them out and see what kind of experience it is.