At first glance the state of Britain’s grocery trade has little to do with higher education, but recent warnings from those in the know, and the supermarkets themselves, suggest a vital parallel.

Recently, the credit ratings agency Moody’s predicted tough times ahead for the leading mainstream supermarket brands as outlying competitors make inroads into their traditional customer base. Something is clearly up. Naturally, supermarkets, like other service businesses, have always had to fight competition, but this time it’s different. Traditional brand loyalties have been disrupted. Customers are not following the predicted course. The same is true for prospective university students.

We know that the so-called marketisation of universities has put pressure on universities to compete. In a sense they always have competed for the best students. It is just that nowadays information, and even misinformation, flows much faster. Prospective students no longer rely on advice from teachers and family; they find out what they want to know for themselves. This can make their choice even more bewildering. It’s a bit like looking at a supermarket shelf stuffed with products and suddenly everything begins to look the same, whether you are in Tesco, Sainsbury’s or Asda. What the brand stands for becomes as important as what’s on offer.

The big supermarkets have been battling it out among themselves for a share of the market, paying scant attention to the outsiders who have been doing things a bit differently. The so-called discounters, such as Aldi and Lidl, have been playing a clever game. Their story is no longer just one of price, but also of difference and convenience, realising that recession has changed people’s behaviour. Buying locally, buying less but more frequently has resulted in some customers spurning the big supermarket outlets. To challenge stale brand perceptions Lidl, for example, are now promoting themselves seriously as a fine wine supplier. This trend away from the norm has also favoured the more established top-end players such as Waitrose and Marks & Spencer.

So, what are the lessons for universities?

Firstly, competition comes from where you least expect it. Private universities, and those offering focused degrees faster and at less cost will attract some students who do not consider the university experience per se a priority. A good qualification in a subject directly related to their envisaged career is likely to count for more, especially if it can be delivered quickly and at lower cost. Overseas universities can attract the more adventurous and offer an experience that no British university can match in quite the same way. Winning university brands will be the ones that anticipate the future needs of students, rather than trade on past successes.

Secondly, students are behaving more like customers. Much as academics may bemoan the fact, the truth is that a university education is becoming more of a transaction. This should not be a threat to academic excellence or inspirational teaching, but once money enters the equation, as it does now, no one can be blamed for seeking value, as they perceive it. The challenge is to define the value of the institution’s brand and make sure it is delivered.

Thirdly, convenience and living costs will often trump other factors. It’s not just fees that worry students. Living costs are clearly becoming a major factor in deciding where to study. Student accommodation is already prohibitively expensive in some cities, so more students are likely to study close to home – buying locally, if you like. This indicates a re-focusing of marketing effort for universities best placed to make a compelling ‘local’ offer.

Fourthly, big may not mean better. While this has never been a generally accepted assumption, it is now much more likely that small and different can be beautiful. Universities that carry big costs and heavy bureaucracies are less likely to move fast to take advantage of changing circumstances, as some new providers have done. Brand strategies need to be light on their feet, engaging not constraining.

Finally, offering clear difference gets you noticed, being a ‘me too’ doesn’t. Like the big supermarkets, some universities are not thinking differently. So many still offer a wide selection of courses, but now it is time to concentrate on where the brand strengths and real quality lie. Being famous for something is always better than being perceived as just another commodity provider. The challenge for universities is to make some radical decisions about what their brands stand for and how they are communicated.

The battle lines now being redrawn amongst supermarkets can help higher education institutions to see their own vulnerabilities and opportunities more clearly. Increasingly, students will ‘shop around’ for the kind of educational experience and outcomes that suit them best. The online option is already with us, and while universities will never award ‘click and collect’ degrees, there is still something useful to be gleaned from the current crisis in the grocery trade.