Lidl Plus - an excellent loyalty programme but a strategic mistake ?

The Lidl Plus app is interesting on a number of levels. First, I like the way it is fully mobile enabled and doesn't rely on plastic cards or paper (incredible that even now 25 years since launch, Tesco Clubcard, Nectar and Boots Adcard are still mostly plastic/paper based). Second they have integrated targeted offers that give meaningful discounts on prices that are already low. It looks as if the discounts are applied at till via a single scan of the phone to give money off (as opposed to earning more points) and I don't think this is still possible at other supermarkets in the UK. It will be interesting to see whether Mobilize Systems believe this breaches their patent. Next they have included partner offers (first ones from Sky, Readly and Chili). An easy win that creates value for customers, Lidl and the partner but one that few of the UK supermarkets have been able to pull off. But perhaps the most interesting thing is that Lidl have done this at all. Like Aldi, they have evolved and continue to evolve their proposition from hard line discounter to "premiumised" [made up word = low priced but looks premium] convenience/supermarket and whilst this will almost certainly increase near term profits, it may be a strategic mistake as we head into recession. Those with long memories will recall that Kwiksave (the UK's first hard line discounter) followed a similar path back in the late 1980's only to be wiped out in the early 90's downturn as Lidl and Aldi entered the market and undercut them with their (then) stripped back, pallet displayed, focus on a limited number of mainly grocery lines. Its difficult to see anyone waiting in the wings with the firepower to undercut Lidl and Aldi at scale (B&M ? Biedronka ? Jacks ?) but there is a soft underbelly for someone to nibble at. Tesco are confident that they can price match Aldi these days. Industry observers expect Aldi to launch their own loyalty programme something that would have been anathema to their founder fathers. In the same way that Kwiksave left the door open back on the day it may be that we are close to peak Aldi/Lidl in the UK with an opportunity for someone to take market share with a new take on stripped back basics at ultra low cost.