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You can’t ignore Lidl – but don’t lose your mind

Chris Field
Chris Field

Years ago, Lidl broke the competition rule, which said that you shouldn’t get distracted by what your rivals are up to and just keep focused on your own business.

The theory is that worrying about the competition instils a sense of inferiority in your business from top to bottom, preventing you from trading at the top of your game – or from confronting the challenges ahead.

Now, Lidl (and other companies, like Amazon) is having such a devastating impact on the status quo, that you simply can’t afford to ignore it.

After all, it changed everything in UK grocery – the size, shape and operation of the market. It also changed existing ideas about the consumer. Who thought the middle classes would ever slum it at Lidl? A shock that the US has yet to confront, as the eponymous retailer sweeps into the Eastern seaboard states.

But paying attention to game-changing retailers shouldn’t mean trying to be like them. Lidl’s ‘when it’s gone it’s gone’ mantra is part of the brand, and customers understand it and embrace it. The company is good at focusing on what it does well.

Other grocery retailers have followed suit by focusing on what they do well and then doing it better: Morrisons has used AI to beat the market on replenishment – so profoundly that it jumped a place to number three in the rankings. Meanwhile Tesco has got out of any business that was distracting it from fixing the core business. 

And herein lies the clue. Pay attention to disruptive competitors in the market, but don’t lose your mind. Almost any business can be better at managing their costs by pricing, allocating and promoting based on customer insight. Equally, by actively using customer data as well as other market data – weather, seasons, locations – most businesses can smash all the averages on availability, optimal pricing, fulfilment, returns; the concrete good retail is built on.

No one, not even Lidl, can break that up.

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