LIDL's Retail Surprise

Some 10 years back hard discounters wore facing a tough challenge on the market compared to traditional supermarkets due to their discounter business concept. They wore well-known for offering low price, with a focus on own brands. To gain market share they had to challenge customer’s belief that cheap prices mean poor quality. And in the case of LIDL, they did just that. 

Lidl managed to evolve its business, transitioning it to a mainstream retailer concept and positioning itself as a one-stop destination. How? In order to become one-stop-shop, they are moving to a larger store footprint concept, that besides increasing sales floor area will have better look and feel to it thanks to better visual merchandising. What we are also seeing, in the last few years, that Lidl is actively working on boosting quality perceptions of its own private labels and, untypical for discounter concept in the past, investing heavily in marketing... including sponsorship participation at public events and use of celebrity chefs in their communication.

Since I mentioned Marketing, you must keep in mind that one of the key features of hard-discount retailers was the absence of a marketing department. Surprised? The concept is not that strange as by focusing on operations, customer satisfaction and ? quality products at low prices ? there is no need to invest in marketing or communication, as the products and operations model sell themselves. This culture was established more than 40 years ago and still endures today. However, with a one-stop-shop destination, things are changing a bit.

Result? I would say they are close in getting there.