Major retailers and supermarkets have had to alter their strategies and target consumers a different way, due to the closure of high street stores amidst the Coronavirus pandemic.
Supermarkets have operated as usual, whilst applying covid-secure measures. Online activity has increased in the last few months, as many consumers have opted to do their weekly shopping online, however, there are still some consumers who prefer to be in-store; as their supermarket or store may not have an online presence.
Perhaps one of the successful supermarkets to not have an online presence is the German discount grocer, Lidl.
In comparison with their competitors, Lidl do not have an online supermarket store where consumers can order their favourite groceries. Their newly launched mobile application offers rewards such as a weekly money saving coupon and loyalty schemes.
Despite Lidl’s efforts to hold onto customers with loyalty schemes, research has shown that consumers will happily switch between loyalty schemes, depending what is on offer at the time. The pandemic has disrupted customer loyalty schemes and retailers are now finding ways to win their customers back.
Lidl have seen continuous success with their customers regularly popping into the store to pick up their favourite items. With Brits strongly considering a switch to online post covid, following a change in consumer behaviours and a successful trial in Lidl’s new app, this could put them in very good stead going forward. However, could Lidl’s lack of online presence dent their progress?
Lidl’s is rewarding new customers by offering £5 off their first shop, the opportunity to scan their digital card using the app after shopping to receive a scratchcard, or £10 off when they spend £200 a month. Just like retailer Primark, will a lack of shopping drag sales in the long term?
Chief customer officer at software company K3 Business Technologies, Carole Gilkes, argued that having no online presence was Lidl’s “biggest strength”.
“Lidl has a clear, focused and distinguished brand that has made considerable gains by cutting out the middle-man,” she explained.
“What’s more, grocery shopping will always be tactile for consumers. There will always be individuals who want to physically visit the supermarket and handpick their food for the week.
“And with Lidl’s quicker, cheaper and more efficient shopping experience – which offers something considerably different to the big players like Tesco or Waitrose – it has succeeded in attracting customers looking for these experiences.”
James Calvert, chief data strategy officer at advertising agency M&C Saatchi, believes that other factors such as the financial implications of the pandemic means a visit to Lidl is more convenient to customers.
“Lidl’s business model and distribution strategy rely on people visiting, buying regular items at great value and picking up a heap of other things from the middle aisle that they never knew they wanted,” he said.
Sebastian Hill, UK managing director of retail marketing firm TCC Global, argued that the launch of Lidl’s discount programme was a big sign that retailers shouldn’t just compete on price alone. Building long-lasting relationships with customers is the key.
“Lidl has historically used low prices to grow its market share and radically shake up the grocery industry – but it now wants to create lasting relationships with its customers in order to maintain this success,” he said.
“Long-term advocacy from shoppers goes far beyond the price point and into the realms of emotional connections. Shoppers remember the rewards they are given by supermarkets far more than they do the occasional promotion or money-off deal.
“Lidl Plus seems to be a menagerie of successful loyalty programmes, rolled into one. It combines coupons, scratch cards, digital receipts and partner offers in one app that allows customers instant accessibility and usability. It should be an effective way to increase the discounter’s connections with customers both in and out of store.
Lidl’s new app allows their customer base to transition towards digital, whilst being able to learn more about their habits through the app. Customers can then benefit from regular loyalty rewards and discounts. Time will tell whether Lidl will suffer from a lack of Ecommerce, however, this is a step in the right direction.
Check out: Customer Experience Testing Customer Loyalty