LIDL express their growing confidence in the UK supermarket war

17Oct14

 

 

 

 

 

 

 

 

 

 

 

While I still firmly believe that when businesses fight solely on price they embark on a competitive race to the bottom.  Providing simplicity in how good value is accessed by your customers may be a great differentiator that augments a value message.  And this can divert some pressure from having to be the absolute cheapest competitor in order to claim difference or prowess in being a customer champion.

Providing simplicity to the customer can be difficult for the business.  It forces you to think about how to remove operational barriers and pressures on the customer to make them qualify in a way the business feels in control.

I first became aware of the change in approach at LIDL in 2013.  Thier activity in supplying a pop-up restaurant in Stockholm with LIDL produce showed more confidence over the quality of the food, extending relevance beyond their traditional the low price value.

This was followed in the UK by a recent TV campaign championing the surprising quality LIDL offer.

The UK ad reinterpreted the same idea for the British consumer and had middle class tonal appeal. The product quality established in a farmer’s market scene, then using the reveal to show the way consumers were pleasantly surprised when the LIDL brand was revealed.

As both mid-price and value price competitors scrabble to demonstrate their worth and difference selling often similar commodities.  A new press ad from LIDL has now emphasised how at least one competitor makes it difficult for customers to access value similar to that offered by LIDL; because they don’t make access to value simple and straightforward.

Having worked with Waitrose on their customer communications and services, I’ve come to appreciate the amount of training, dedication and focus required in order to provide a consistent quality of retail service. Particularly one that customers appreciate is truly centred around helping them gain better food. While providing cheap food in itself is easier.  Making your brand appreciated requires brand difference and service quality people respect and prefer.

If Tesco, Morrisons, Asda and Sainsbury’s in the UK place barriers in front of service and make it difficult for the customer to identify if they are indeed truly gaining competitive value on price; they will continue to find the approach demonstrated by LIDL difficult to challenge.

There is an interesting article exploring these points further at Contagious: HERE

Sainsbury’s have also made it less simple for customer’s to gain value by halving the rewards available automatically through Nectar points collected for every £1 spent.  Sainsbury’s intend to tactically deploy additional point bonuses that hope to target customer shopping benefits more closely, by incentivising specific purchase bevaviour.  But this adds a barrier to simplicity and the clarity of reward available on a regular basis for the customer.

Marketing Week discuss Sainsbury’s change of Nectar Points: HERE

 

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