‘Fresh, cheap and Scandinavian’ – How Netto’s marketing director plans to take on Aldi and Lidl

Netto has arrived back in the UK with a more slimmed down estate than the almost 200 stores it had when it pulled out in 2010. It has now opened five shops in the North of England, with plans to open 10 more in 2015 as part of a year-long trial between Sainsbury’s and Dansk Supermarked.

It also returns to a very different grocery scene – all the big four are experiencing like-for-like sales declines while Aldi and Lidl’s growth continues to soar. However, Netto’s UK marketing director Tom Hampson believes there is room for a third player in the discount space, with Netto hoping to differentiate itself through fresh food, cheap produce and its Scandinvian roots.

“The heart of the proposition is fresh and value with a Scandinavian twist. If I had to reduce the brand to three words they would be: fresh, cheap, Scandinavian,” says Hampson.

The marketing plan

Hampson says his main objective is to boost local awareness that a store has opened in the area to drive footfall and therefore sales.

Marketing has focused on local activations including its mascot, Scottie, touring city centres, social media, digital and print. Local press has pushed its fresh food and bakery produce, with ads launching today (11 December) for its whole British chicken that costs £2.

The “backbone” of its marketing is the leaflet which is distributed to households in the local area. It features “spot deals” – an ever-changing range of limited deals stocks, “once they’re gone they’re gone”, as Hampson puts it. They feature a mixture of food and non-food and its standard and “premieur” range, which Netto is keen to push in the run-up to Christmas.

An ad for Netto doughnuts
An ad for Netto doughnuts

Hampson says its communicatons have a “clipped, Scandinavian tone of voice” that “cut to the chase”.

“Our ads cover the things that need to covered. There is nothing that is not needed. That reflects the offer customers get in store.”

The importance of being “cheap”

Hampson acknowledges that “cheap” is an interesting choice of word to describe Netto because of the negative connotation. However he believes the meaning behind the word has changed.

“Now cheap means cheap and let’s celebrate it. The sense is that cheap is good. It’s not loaded in the way it used to be.”

Tom Hampson, Netto UK marketing director

“Before if you saw something was cheap you’d think ‘cheap and nasty’. Now it means cheap and let’s celebrate it. The sense is that cheap is good, that if something is cheap people now want it. It’s not loaded in the way it used to be,” he adds.

The Netto brand

Hampson joined Netto from Sainsbury’s and is part of a team of three working in the marketing department for the discounter. He says the cultural differences are huge – at Sainsbury’s marketing was about being the “custodian of a brand with 146 years of success and trust”. Netto by contrast can take on an underdog status.

“What we are doing is setting something up from scratch, we are pretty much launching a new brand,” he says.

That doesn’t mean Netto doesn’t have some negative baggage. Awareness levels are high and the internet is full of digs at the brand. Hampson highlights the joke on Urban Dictionary – “what’s yellow and black and full of crap”.

“[The brand] has some history but the store offer now is very different and the brand itself is very different. We are still cheap but the offer has moved on leaps and bounds,” he says.

netto dog 2014

To reflect that, Netto has “softened” its logo. It is now in lower case, rather than upper and there are colours in mascot Scottie’s basket aimed at adding warmth to the logo and the stores, which make use of the colours.

Hampson admits there is “not a lot of logic” behind Scottie but says the dog was introduced as part of an ad campaign 20 years ago and “stuck around” because people liked him. He also helps bring “warmth, character and life” to the brand, he says.

Netto is still a trial, with Sainsbury’s and Dansk giving the initiative a year to see if it works. However Hampson believes there is room for a third discounter in a market that has more than doubled over the past four years and now accounts for 8.1% of the total grocery space.

“The discount market is growing rapidly, there is definitely space for another player. For price comparison we are in the same space as the discounters but where we stand out is commitment to fresh. I would challenge people to find a better bakery in the market,” he says.

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