How ‘third-way’ thinking has helped ALDI cement its place in the lives of Australians

While Australian consumers see supermarket stalwarts Coles and Woolies as agile yet old-school, ALDI comes across as more of a free spirit. Wayde Bull explains how this positioning comes straight from the ‘third-way’ playbook and how other retail brands could apply a similar approach.

As idealistic new leaders, both Bill Clinton and Tony Blair championed the concept of a ‘third way’ in politics that might break with the stifling conventions of left or right-wing thinking and unlock a fresh way forward. Both young leaders, talented with words, sought to tap into the energy and hopefulness of fresh thinking, unconstrained by what had come before them.

While it may feel like an unlikely parallel, third-way thinking neatly summarises the appeal of the ALDI brand in Australia that today offers a refreshing alternative to the predictable Coles versus Woolies brand choice.

While Australian consumers see supermarket stalwarts Coles and Woolies locked in tit-for-tat combat, they’re essentially viewed as variations on an oh-so-familiar theme. They each reinforce existing conventions in the market by battling for primacy on the same buying factors.

In contrast, ALDI is seen by Australians as a significant departure from the Coles/Woolies convention in terms of product range, store format, merchandise mix and marketing.

ALDI’s brand personality, encapsulated by its “Good Different” promise is assertively alternative. And this is registering, in a positive way, with Australian consumers.

For the past 13 years, Principals has conducted the Brand Alpha study, research that gauges the attitudes of consumers towards brands in the Australian market. In the most recent Brand Alpha study, an attribute the ALDI brand was especially associated with was, “feels free to be original”.

ALDI’s free spirit lends it confidence as a brand that’s far greater than its market share. It feels like a serious contender because it’s running its own confident race. While the brand welcomes direct comparison with the majors on price and value, it seeks to defy comparison with them on practically everything else.

It’s a strategy clever third-way challengers are embracing. Other brands strongly associated with the “free to be original” trait include iiNet, the lovable tech nerd versus Telstra and Optus. Then there’s Jetstar, the colourful value leader versus Qantas and Virgin. Netflix is the personalised entertainment leader versus Foxtel and free-to-air and Bank Australia fearlessly asserts its ‘clean money’ beliefs versus the big four and last century ‘friendlies’.

These third-way challengers are brands with an almost irrepressible personality. They really know themselves and where they stand, so convey a self-confident feeling that’s differentiating versus brand leaders who are much more restrained and predictable in their behaviour. Third-way challengers are also skilled at taking the friction out of the brand experience, carving out a role in people’s lives with a real sense of ease and positivity.

It’s a clever approach for retailers looking to take on incumbents in their category. To best leverage the tactic, start by identifying the two category leaders and the buying factors they choose to emphasise that define the category status quo. What have people come to expect from those brands and how can you subvert expectations to forge your path?

If, as a challenger brand, you break with the notion you must obey all the rules ‘loudmouths’ in your sector reinforce and choose instead to offer customers a refreshingly different experience built around one or two striking points of difference, then that rule book might just start to be rewritten on terms more favourable to your brand.

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Wayde Bull is a founder and planning director for branding agency Principals.

This article first appeared on Inside Retail.