Will Aldi Express revolutionize US online grocery?
Aldi has strengthened its partnership with Instacart in the US by introducing Aldi Express, an online grocery service that offers delivery within 30 minutes. This move expands Aldi's ecommerce presence in the country and provides customers with convenient access to nearly 2,000 items from over 2,100 Aldi locations across the US. In addition to Instacart, Aldi has recently partnered with Doordash to expand its delivery services across 38 states.
The delivery range includes a variety of products such as ready meals, snacks, drinks, staple foods and household goods. Scott Patton, Aldi's VP of National Purchasing, stated that the collaboration with Instacart aims to help Aldi continuously innovate and make online grocery shopping more effortless and accessible.
The Aldi Express service is designed for impulse or refill purchases rather than weekly shopping trips. The partnership between Aldi and Instacart began in 2017 as a pilot project and has since expanded nationwide. Aldi also added alcohol delivery to its offering and started accepting online payments through Instacart.
A significant milestone for Aldi and online value
This is a major move for Aldi and US online grocery. Traditionally, Aldi and the value channel have been seen as exclusively brick-and-mortar. Value players have been slow to adopt ecommerce as it isn’t seen as a cozy fit with their rigorously efficient models. This makes it plain that Aldi is now taking it seriously and putting its foot to the accelerator. It's also likely this shift will generate more movement across value and the wider grocery space.
For Aldi, adding such a service could help it attract new customer cohorts looking for convenient and affordable ways to shop groceries. Essentially, it gives it entry to a new consideration space that is a hybridization of value and convenience. Our Q2 2023 US shopper capture rate study shows Aldi maintaining its high share of shopper preference, and the introduction of Express from almost all stores will only enhance its position, especially for shoppers for whom value matters.
Oftentimes, customers avoid rapid delivery options as it typically carries a higher price tag. However, having a lower-priced option will aid shopper mentality when seeking such solutions. This is also a timely move for the US market, as consumers look forward to the summer BBQ season and the upcoming Juneteenth and 4 July holidays. Emergency and impulse missions are more in focus around these occasions, making the Express offer highly relevant. Half-hour delivery is ideal for when party supplies run low, and Aldi’s affordability should encourage the building of bigger online baskets.
Aldi Express is a direct challenge to other grocery chains like Walmart, Target and Amazon Fresh, which have been offering delivery for years. Aldi’s move could force other retailers to step up and offer faster delivery options. This could see more players entering the race and further innovation in the rapid delivery space.
Across the Atlantic, Aldi Süd (the parent of the US business) recently announced it is testing grocery delivery in its home market of Germany. Rapid delivery is not new for Aldi, as in the UK during the Covid pandemic Aldi offered delivery through Deliveroo, but subsequently ditched the service, citing low demand and inefficiencies.
Pressure has growing inside the company for action in the space for some time, with overseas markets like the US, UK and Australia reportedly the most vocal in their demands. In early 2021, both Aldi units created a dedicated ecommerce unit to explore the sector, and we should also not overlook the fact that Aldi Süd has a Chinese business that works with hyper-local fast-fulfilment providers to offer 30-minute delivery from all stores.
Kantar’s Point of View
Aldi Express is a sign of the changing retail landscape, as more consumers are demanding convenience and speed when it comes to grocery shopping. It is a win for consumers as they can enjoy faster fulfilment at a lower price.
This move puts pressure on other retailers and highlights the importance of ecommerce in the wider grocery space. It is likely the competition will intensify as retailers further invest in the channel and look to compete with Aldi in terms of affordability.
Aldi Express could lead to a change in the way people shop for groceries. Instead of planned full-basket trips, consumers could switch to more impulse shopping.
