“Aldi Life”: Why should a supermarket discounter enter the music streaming industry?
It´s not the first time that the German based company Aldi is tackling an industry with a low competitive price. This time it is the fast growing music streaming industry. What sounds like a curious sideline business could be a central element for changing the brand in the next years.
Two weeks ago Aldi launched on own music streaming platform in cooperation with Napster. For only 7.99€ per month, Aldi offers more than 34 million songs and audio books. At first it seems to be nonsensical to enter a highly competitive market in which already big competitors such as Spotify, Apple Music, Deezer or Ampya exist. And even that Aldi is cooperating with Napster has only limited benefits, as this brand is only partly known by the young target group.
However, Aldi has a good timing for this launch. The pioneer Spotify has demonstrated that music streaming in a performing and lucrative market. And Apple Music and Deezer are currently highly investing in advertisement and thereby keeping this topic continuously at customer awareness. This enables an opportunity for a low-cost provider.
Aldi has already proven in the past that they provide good multimedia products. In the hardware market they have a very fruitful cooperation with Medion, and in the mobile communication market AldiTalk is very successful as well. These two examples have shown that selling products or service at a low price but with high sales number can be profitable. Additionally, Aldi can use synergies and offer bundles, as mobile services as music streaming are closely connected. For example they can exclude the data volume for Aldi Life from the monthly data volume. Furthermore, they already have an existing customer (data) base. Therefore, the success prospects for Aldi Life are high and it is very likely that this discount strategy will be successful for music streaming as well.
This new tender is strengthening the retail competence within the field of digital and virtual products, a topic that is becoming more and more important in the future. Currently price and quality are the crucial factor which grocery story the customers favor. But, especially in the e-commerce these boarders are diminishing. Amazon Fresh is a good example: It is very likely that customers that had a good (service) experience are getting to know Amazon as a retailer much better then Aldi & Co.
For traditional retail companies the only counter strategy is the development of digital products and thereby getting contact to young customers who have high potential for their core business. And nevertheless, soon or later e-commerce is becoming a non-negligible topic for every stationary distributor.
Additional note: Aldi Life is currently not available in the Netherlands, but it is very likely that is will be available here so pay attention.
- Aldi Life (20159. Aldi Life. Available at: https://www.aldilife.de
- Campillo-Lundbeck. S. (2015). Warum sich der Discounter in der digitalen Welt so wohl fühlt. Horizont. Available at: http://www.horizont.net/marketing/kommentare/Aldi-life-Musik-Wo-die-Musik-bei-Aldi-wirklich-spielt-136540
- Kerksmann, C. (2015). Aldi wird zum Musik-Discounter. Handelsblatt. Available at: ewww.handelsblatt.com/unternehmen/it-medien/streamingdienst-gegen-spotify-und-apple-aldi-wird-zum-musik-discounter/12358744.html
- Vincent, P. (2015). Aldi teams with Napster to launch music streaming service. The Sydney Morning Herald. Available le at: http://www.smh.com.au/entertainment/music/aldi-teams-with-napster-to-launch-music-streaming-service-20150929-gjwwtp.html#ixzz3nV7aeukv Follow us: @smh on Twitter | sydneymorningherald on Facebook http://www.smh.com.au/entertainment/music/aldi-teams-with-napster-to-launch-music-streaming-service-20150929-gjwwtp.html