Lidl's International Strategy

If you read this blog, you must know all the respect I have for Lidl as a retailer. Actually, I believe that Lidl is one of the FMCG retailer that have the strongest concept, based on a very efficient operation model.

As I have said in my previous post this week, I have spent several days in Malta. When I arrived at the airport, I found the sign above. This is the same kind of signs I have seen when I went some years ago in Greece. Lidl is advertizing and has chosen its medium. 

This is part of an overal international strategy. Indeed, since 3 to 4 years now, Lidl has started to be more and more marketed in order to recruit new customers that did not used to go to their stores originally. The copy and implement the same strategy worldwide.

Here are some of the components of what we have seen.

Communication

• They communicate in airports for international and visiting clientele.
• They communicate also by sponsoring some sport national teams: Handball in France, Soccer in Italy

Categories

They implement specific categories in order to improve their image. Mostly the fruit and vegetable section, but also the bread section, that is heat up in store. 

They still keep their European strategy by buying in bulk products, but more and more they have specific offers to fit with the local culture. 

Internet

They have several local initiatives, but Lidl tends more and more to propose click & collect service, sometimes on specific offers only available online. I am thinking for example to the wine promotions in France with Premium brands.

Lidl is for sure one of the largest competitors to Carrefour, Tesco and even Walmart worldwide, and they have a clear vision of their strategy.

Retail In Malta

Not so long ago I spent some vacation on the Island of Malta. Even though it was for leisure purpose, and actually it remained mostly about that, as I have not spent much time visiting stores, I still was able to find out a bit more about the retail landscape.

About Malta
What is interesting about Malta is first its geography. It is at the south of Italy. Therefore, you will find a lot of Italian products and brands.
Moreover, it is an island. There is hence different factors that will shape the retail landscape.

1. First in terms of products: You will find a lot of fish products.
2. Secondly, the cost of retailing. Indeed, you need to import a lot of products. Two consequences. A fairly big part of the products are made in Malta, but some international products, especially cosmetics, were pretty expensive.
3. There is no potable water on the island. And it is very hot. Therefore, the water category is very large in the island, with large formats.

The retailers

A lot of small convenience stores can be find, or small hypermarkets. The roads are small, and the island is small. Therefore, no need to have a big hypermarket. I have found none there.

But another format of retail is thriving there: Lidl. Indeed, Lidl can have a very efficient supply chain, multiplying the stores in order to cover the whole Island. Good strategy.

Tower Supermarket

I haven't visited one (once again, not a long time, and really focusing on the tourism part of the vacations), but Tower Supermarket is really a great store. A big focus on fresh products, with specific concepts, well executed, a large health and beauty section.

A very modern store, that could work in most of European countries. It is always funny to see how local retailer can sometimes be so good.

Attention! Lidl arrive sur la publicité comparative!

Ca c'est une nouvelle qui est quand même importante: Lidl arrive en France avec de la publicité comparative. Mais pas cette fois-ci sur des produits semblables (c'est à dire même EAN, même format, même marque, etc...), cette fois-ci, Lidl attaque là où ça blesse: le prix de vente entre les produits à marque Lidl (MDD), aux marques nationales référentes. 

Qui plus est, l'enseigne allemande utilise le plus noble de média pour s’exécuter: la télévision. 

L'information n'est pas anodine. Alors que cela fait à peu près 10 ans que la publicité est permise pour la grande distribution et près de 20 ans que la publicité comparative est également légiférée par le droit européen, c'est la première fois qu'un distributeur ose comparer sa MDD à de la marque nationale.

Stratégie dangereuse, car à coup sûr on va voir des recours judiciaire par les grandes marques, voire peut être la concurrence (distributeurs). Mais elle met les pieds dans le plat.

Surtout aujourd'hui où la MDD est laissé de côté par la plupart des distributeurs "classique" pour cause de guerre de prix sur les marques nationales. Et finalement la stratégie la plus logique est ressortie par Lidl.

Je dis bravo pour ce courage, même si je trouve que l'execution aurait pu être mieux réalisée, même si on comprend l'envie de mettre en lien le basique goût des 2 produits en avant et donc le côté factuel de la comparaison.

Une communication néanmoins clé pour l'avenir.

Lidl Is Undertaking An Ecommerce Strategy

Lidl goes on with its strategy to modernize its brand image by launching new businesses. 

• In store, they have improve a lot their fresh produce offer.
• In terms of advertizing, they multiply TV and radio campaigns
• They modernize also their store network by investing massively in point of sales marketing.

But Lidl has recently decided to launch Ecommerce presence in both Germany and Belgium. They propose their technical products (no food products) online, with clear claims in term of quality of service:

• 30 days to give back if the product is deceiving
• 2 days home delivery
• Securized payment system

It is interesting, because I believe Lidl will experience tremendous success with this strategy.

• They will be able to provide a better service to customers (most of the time those products are out of stock very fast, especially as they are daily offers).
• They will be able to access other customers that may not go to their stores.
• Therefore they will be able to leverage extra sales.

Lidl has a clear strategy, and I believe that they execute it very well. 

Est ce que Lidl est le "vrai supermarché de demain"? Retail Stratégie

J'ai écrit un article la semaine dernière sur un article paru il y a peu dans le magazine LSA sur Lidl. Magazine événement, car Lidl, pourtant avare d'interview et d'annonces dans la presse, a laissé 3 de ces dirigents ("gérant", directeur des achats, et directeur de l'expansion), le soin d'expliquer la stratégie du groupe. 

Lors de cet article, une phrase a retenue mon attention : selon son patron, Freidrich Fuchs, "Lidl est le vrai supermarché de demain". En effet, Lidl a réalisé un revirement stratégique, décidant sa sortie du hard discount, sans rogner sur ses principes basiques: 

• 1400 m2 vs 800 m2 actuellement
• 1621 références (choix court)
• Peu de marques nationales
• Excellence opérationnelle pour base.

Maintenant, est ce que Lidl est le supermarché de demain? La roue du commerce veut que chaque concept discount rupturiste s'émancipe, vers plus de service et de qualité. Aujourd'hui, Lidl souhaite en faire de même. Aujourd'hui, les supermarchés modernes, tel les nouveaux concepts Intermarché, sont basé sur plus de choix, plus de frais, des services drive etc... Donc il y a clairement une place qui est à récupérer. 

Au moins, Lidl a très certainement un concept très marqué et spécifique, différenciant de sa nouvelle concurrence supermarché. Donc je pense que Lidl a effectivement une opportunité de développer un nouveau segment spécifique, où je ne pense pas qu'un concurrent risque de s'engoufrer (je vois mal un supermarché dégradé son format por concurrencer un Lidl, surtout au vue de l'excellence opérationnelle de l'allemand).

Et vous, qu'en pensez vous? N'hésitez pas à commenter sur Twitter.

Lidl Strategy in France

Amazing article in French magazine LSA. Lidl is one of the largest retailer in the world. Most of time, it is under estimated for several reasons:

• First of all, it is a hard discounter. Therefore it keeps it simple, does not innovate much on products or shopping experience, but maintain consistently excellent execution in store.
• It does not communicate much, as it has a low marketing budget, but also because the company culture is based on not discussing about the company. No public statements, no communication on the sales figures. It is a familly company.
• It does not try to have "avant gardist" store concept. When it takes a decision, for example to have in store baked bread, to spread it fast.

But Lidl has changed its strategy not so long ago, trying to leave hard discount to become "the real supermarket of tomorrow" as its French manager Friedrich Fuchs explains. Here are the great highlights of the article.

• Lidl is giving up the hard discount concept in all its countries, to become a new form of supermarkets.
• The share of sales under "national brands" is 10%, private label 90%
• The strategy is to extend the average store from 880m2 to 1300m2
• It will also implies larger employee staff, from 8-9 people in 1990 to 20-25 people (the double of people of the average Ed at the time I worked there).
• Lidl has a digital strategy based on click & collect deals, especially on premium wines. 
• They have 1 621 products in range. 
• They don't have any plans on extending their national brand range, focusing their effort on their private labels. They even said they don't need national brands! Watch out suppliers.
• They have purchasing agencies in all their European countries, but try as much as possible to buy at a European level. For example major brands like Coke (Coca Cola) are negotiated at Lidl International in Germany. But France have special products bought for the whole Europe, like cheese and wine in France. This is a great idea as France is the main market for those products, and as they are local suppliers, they could benefit from a better sourcing.
• Stores are delivered each day, by 25 warehouses (60 stores per warehourses, which is in my opinion not as much as I believed). 

Real Estate Strategy

• They have a clear real estate strategy: On the 1500 stores in France, they plan on rebuilding 900 of them. 
• They spend 4,5 to 5 million € to reshape each of their store renovation. Let's put it in prospective: Lidl France = 8,5 billion € in 2014. They have 1 500 stores. That means they spend 100% of a year's sales in each store!!!! Crazy investments!

Their strategic goals by 2020:

• Having renovated 100% of their current stores
• Reach 1800 to 1900 stores
• 8% of market shares (from 4.9% today)

This is amazingly detailed, and I hope you like the precision of the explanations and figures given in this article.

Lidl Ready To Conquer The US Market

Costco is coming to Europe? European are coming to the US! Indeed, this is a very important news for the retail world. As much as the arrival of Costco in Spain and soon (hopefully) in France, Lidl projects to enter the US competition starting in 2018.

Lidl is aiming to open mostly on the east coast, but also including some locations in California. Thanks to its business modell based on small and cheap stores to open, they can spread the country fast, with low investment.

In fact 200 people are already working on the development plan of the German company.

Lidl has evolved a lot lately, trying to be considered as a more modern actor of the retailing world, by enlarging their product ranges, adopting massive commercial campaigns, having more national label in store, and focusing more on the fresh products.

I believe there are clearly similarities in the two projects. 

• Both have unique concepts, based on low prices, but with different tools in terms of business models.
• Both have large investment capacities due to their size. They are both in the top 5 of the brick & mortar retail rankings.
• Both companies are facing a new kind of competition landscape: Mature businesses with already strongly founded retail concepts. In Europe, hypermarkets like Tesco or Carrefour. In the US, the tycoon Walmart. But this is actually also a great opportunities as it gives free space to specific concept far from those ones.

Now, negative people will tell you that Americans already have a wide range of choice in terms of retail, that at the digital age why a hard discounter would succeed, and I don't know other skeptical comments. The same that are skeptical about Costco's success in France, the land of good food and Carrefour. But if you see what kind of competition Lidl gives to Tesco in the UK, you would maybe understand better. On top of that, both retailers are thriving worldwide with a concept that yet no one has been able to master as they do.

Of course, Aldi is already located in the US, and it has been for decades. But Lidl I believe has a stronger concept, and its arrival could change the way the retail is organized in the US. Aldi is actually having great results thanks to its original Trader Joe banner.

It will be a long wait until 2018 to see how the Americans react to the historic hard discount modell.

For those of my American Audience (actually it is my first audience worldwide) whom may not know about what a Lidl look like, you may have a look below at the video showing you how a store look like.

Some Thoughts On Aldi's Strategy In The US

Aldi is one of the premium retailer in the world. Probably not the sexiest, as it is a hardcore hard discounter, not the hypest, as it barely use RP and do not advertize, but one of the best performing ones, with a unique concept.  Former CEO of Tesco Terry Leahy explained its fiercest competition came from the arrival in the UK market of Aldi. I have recently published a post about its international strategy.

Aldi has recently created a social media campaign with comedian Ben Bailey to promote its US store. The purpose, to show that Aldi has remarkable quality product, and have great prices.

Some thoughts come to my mind while watching those videos: 

• Aldi's store have nothing in comon with what I know of Aldi in Europe: Larger stores, more choice, better presentation
• Aldi is advertizing! This is for sure unique. But Aldi has been in the US (with the Aldi Label, not the Trader Joe's one) for a long time and struggling. This could be the reason why they are using advertizing.
• They use social media, which is probably cheaper than national advertizing, and better accepted than standard media which Aldi don't use in the other countries.

Now if you look at the number of subscription and the number of views, for such a large market, you can clearly see that the success is non really relevant. But Aldi is planning to open 45 new stores, and I believe that the US will become one of the strategic country for the company.

Also, a very important news in the article: Lidl is opening in the US! The potential growth of hard discount retailer in the US will for sure be a great story to follow. Especially because the US market is really difficult, and a lot of foreign retailers such as Auchan or Casino failed to enter.

Discounters Outspend Tesco On Christmas Ad: Some Thoughts About Lidl Strategy

Lidl is at a very interesting time of its history. Lidl is indeed one of the largest retailer in the world, and thrive on hard discount. It is one of the leading retailer in Germany and has two interesting challenges in Europe:

1 - Grow as the most important challenger of Tesco in the UK

2 - Keep on growing in France as hard discount is going in limbo.

To achieve these two goals, Lidl has one main strategy: Strengthen its concept, in order not to be a standard hard discounter, but a reference in term of price/quality ration. This is the reason why Lidl has worked to hard to get its stores more welcoming. 

I read an interesting fact on the Internet: Discounters outspend Tesco on Christmas Ads this year. Indeed, the hard discount concept does not comply with advertisement, as hard discounter cuts off all kinds of extra costs that are not directly linked to operational costs. Lidl has also advertized a lot in France lately. But is it so strange to see hard discounter making ads? It is not so surprising. Both in France and in the UK hard discounters are now in a mature markets, where they need to find grow beyond expansion. That also needs they need now to explain well their concept, and to attract new customers out of their core clientele.

Of course, now that Lidl is now advertizing and hence getting far from the original discount concept, we may in couple of years from now see the rise of a new discount concept that will emerge, as it happened with the department stores, supermarkets, hypermarkets, hard discount...

Social Media And Retailing: How Lidl Uses Facebook In France

Social medias uses in business and retailing starts to be common. Most of retailers on a fan page on Facebook, and sometimes a Twitter account. But today I wanted to write about not a standard retailer, but a hard discount retailer that have decided to communicate on social media : Facebook.

Lidl is one of the largest retailer in the world. Despite a low cost model, short product ranges and very little advertising, it has been able to spead all around Europe, and (even though they don't communicate their sales figures) it is believed they are in the top 5 ranking of the largest retailers.

Lidl has never communicate much. It is in its strategy. As a hard discounter, its goal is to minimize every cost possible, in order to sell its goods as cheap as possible, maximizing the mergins. 

But Lidl has changed over the time, as the hard discount model is starting to go in limbo. They have hence decided last year in France to create a Facebook Fan's page. After one year, they already have 280 000 fans! What is even more impressive, is that they have way more fans than retailers that are at least twice bigger than them in France: Intermarché (200 K), Leclerc (133 K) and Carrefour (the largest one with only 34 Ks). 

We must say that a year ago, Lidl has made a large advertising campaigns on its leaflets in order to launch their fan page.  But nevertheless, even though they don't communicate that much now about it, the fan community growth pace is still fast.

What does Lidl post on it?

Well, mostly, promotions and products reviews. Clearly they don't have a budget to animate the community, like some other brands have (proposing games, specific discounts, content such as receipes...). Despite the little budget they own (once again there are only two people dealing with the whole Internet presence, which is also encompassing emailing campaigns and the website maintenance), they really bond with the customers, as they have a 10% interaction rate on most of their posts...

Some thoughts about Lidl

Even though Lidl is a concept based on private label, and on proposing no brands, Lidl is not a no-brand, it is actually a strong brand, with which customers bond. This is the reason why they have been able to create such a connection with their community.

Social Media in Lidl Strategy

Lidl is evolving fast, leaving the traditional hard discount concept to a more modern one. Nicolas Calo, the communication manager of Lidl France, declares that the social media investment is part of the overal strategy of the group to modernize their concept. He also adds that "the concept goes more toward modernity and proximity: that is what Facebook is bringing to us: Modernity of communication, and proximity to our clientele".

I find that amazing that Lidl, despite very little budgets compare to its competition, despite a concept that is based on very little advertizing and customer service, has been able to become one of the best success story in the Facebook's retailing world.

What do you think about it?