According to Germany’s retail association HDE, the number of retail stores in Europe’s largest economy has fallen by 18% over the last ten years – today, Germany has around 66,000 fewer stores than in 2015. While many retailers closed down, especially in the mid-price segment, the discount and fast-fashion segments are booming. Discounters such as Action, Tedi, and Woolworth are opening one branch after the other. A new opportunity for digital signage?
Aldi and Lidl have shaped food retail in Europe for decades, as has the incredible success of Zara and H&M in the fast fashion sector. After food and fashion, another segment is now being disrupted by discounters. A new breed of non-food chains are gaining traction.
Dutch retailer Action copied the hard discount business model of Aldi & Co and developed a Europe-wide, extremely successful non-food discount business model based on cheap household goods, decorative items, toys, and electrical appliances. Action currently operates more than 2,700 stores, primarily in Benelux, DACH, France, and neighboring countries. Almost 75,000 employees generated sales of €9.6 billion in the first nine months of 2024.
Action’s competitors such as Tedi, Woolworth and Kik are expanding less spectacularly but just as successfully. Non-food discounters open hundreds of stores every year and are thus increasingly penetrating attractive inner-city locations. Not only are the prices cheap, but so is the store design and marketing.
Only limited potential for digital signage?
Even if shopping at Action & Co hardly creates a shopping experience, non-food hard discounters in particular face a challenge. The assortment includes around 6,000 items, half of which change every few days. Communication at the point of sale is particularly important here.
One or two screens are already hanging in non-food discount stores, and digital signage is a permanent fixture in food discount stores (Aldi, Lidl) and fast fashion. The increasing competitive pressure between Action, Tedi & Co and the additional clothing range at Kik and Woolworth should make an interesting digital signage business cases. Great potential for simple display solutions at the store entrance and shop window.
