"Advertising budgets will hardly grow"
Daniel Staib, author of the study and senior researcher at the GDI, on the implications for advertising and discount store communications.
Senior Researcher at the GDI, on the implications for advertising and the
Discount communication.WW: David Bosshart said in his introduction that we are living in an increasingly
more interconnected and unstable world, we cannot say what tomorrow will bring.
will be. Accordingly, the CEOs of the participating companies
retail company reacted. How do you interpret the reaction?
Daniel Staib: We have the
results were, of course, strongly spun. In addition, we have
also tried to create contradictions. The reaction was indeed
that many played it down and said that the situation was not that bad.
changed quickly. We also have this kind of feigned composure
expected. It has to be said, however, that we did not analyze the four scenarios in
with the CEOs, but also with those directly involved in the
levels of management. In this respect, the
Results of their perception.
WW: And it shows that, although the market is no longer growing strongly, the sales area is increasing by leaps and bounds.
Daniel Staib: Exactly.
And this naturally begs the question: Where are the losers? And that can
simply not just the little ones.
WW: In the study you come under
concluded, among other things, that it is the shopping centers that are severely under
will suffer from the changes. Nevertheless, several major
experience shopping centers are planned in Switzerland. Will these be built on sand
built?Daniel Staib:
It is not possible to generalize and say that the shopping centers
will lose. Good mall concepts definitely have their justification
as well as the shopping experience. Especially in scenarios that
uncertainty and terror, the protected environment is
Shopping atmosphere in shopping centers a positive factor. My
The objection is more to the effect that all CEOs are already saying that
we are equipped with more retail space than any other country
except for the USA. That makes me wonder about the
profitability and how the investments are amortized. On the other hand
a new shopping center is more attractive and straight,
If the new experience concepts are implemented well, I recognize in them
certainly has great potential. But someone will still
lose. In the Zurich area, for example, this was Shoppiland, the
suffered a drop in sales of almost 25 percent between 1995 and 2004.
WW: Independent
of the scenarios, they all have two key trends in common: 1.
Switzerland as a special case has had its day and 2. the times of manageable
price competition are over. What consequences will the upheavals in
of the retail industry for the communications sector?
Daniel Staib: In the
In an international comparison, the Swiss market was more strongly
quality competition, especially in the food sector. The question is
now: How will retailers behave when Aldi enters the market soon?
occur? It can be assumed that the more intense price competition
Initially, the advertising industry was also involved. This phase
of the announcement, in which more and
more intensively, but will soon be followed by a
consolidation phase. You have to realize that discount chains like
Aldi communicates very little via traditional advertising channels. And
If the retailers' sales do not increase in the medium term, the
advertising budgets hardly grow. If Aldi grows at the expense of the major distributors
should take over a substantial part of the market, then the
sales losses are expected for the two major players, and this will
sooner or later this will have an impact on their advertising budgets.
WW: Turning
We move on from visions to actuality. Here you get more
the impression that in the next ten years we will have to deal with the special case of
Switzerland will remain: Lidl is delaying its market entry, Aldi will
German pricing policy for Switzerland, while
the growth rates in its country of origin have declined noticeably,
and the philosophy of greed seems to be pretty much exhausted.
Daniel Staib: The
Retail is actually a local business, which means that the
special case will certainly not disappear completely. Nevertheless, I am firmly convinced
convinced that in the coming years the retail industry will
will change a lot. The fact is that Aldi in Switzerland is not
can be as cheap as in Germany. But you have to assume
assume that Aldi will do everything in its power to create a very strong
maintain a good price image.
WW: But our customers are more demanding than our neighbors to the north.
Daniel Staib: In
In England, Aldi was apparently unable to compete due to similarly high demands.
on a larger scale. Now they are trying to
and "upgrade" the brand.
WW: Upgrading
seems to be the order of the day: Walmart is improving its clothing range,
Denner is now appearing with image commercials. The big players are responding to this
Retailer with low-cost and premium lines. Does this dilute
not a clear brand positioning?
Daniel Staib: The
depends on how well you do it. If you take Migros' expansion strategy
with M-budget to premium offers, then this corresponds to
what Tesco is already doing in the UK with great success.
has taken place. If a company that is so well anchored in the population
Companies such as Migros, in addition to the standard, a low-cost and
premium product range and communicates this well, then
it can work. In its pioneering days, Migros was actually
the hard discounter per se and then made a big
conversion process.
Interview: Luca Aloisi
