EXCLUSIVE: Lidl Fine-Tunes U.S. Shopping Experience One Store at a Time
As Progressive Grocer discovered earlier this year in an exclusive interview with Lidl US CEO Joel Rampoldt, the company is rolling out a shopping experience more tailored to its American customers, but what does that look like in practice? To find out, PG spoke with Frank Kerr, Lidl US’ chief customer officer on the occasion of the deep discounter’s long-awaited debut in the Fresh Meadows neighborhood of Queens, a borough of New York City.
Amid the general merriment, which included a DJ, giveaways, an ice plunge benefiting the Food Bank for New York City, and a giant blow-up version of Lidl’s signature 79-cent croissant, Kerr – who was one of the ice plunge participants – shared with PG just how the retailer is catering to its Stateside shoppers in Fresh Meadows and elsewhere. (Answers have been edited for brevity and clarity.)
Progressive Grocer: So, first, are you recovered [from the ice plunge]?
Frank Kerr: I was just saying to our marketing team out there that all my fingers and toes are still a little bit cold.
PG: I’m sure. Earlier this year, I spoke to Joel Rampoldt, and he told me a lot about how Lidl in the U.S. is sort of Americanizing its experience for the U.S. consumer. So what are the new store features, products and technologies here in this store that are meant specifically to appeal to American consumers in general, and to Fresh Meadow shoppers in particular?
FK: I’ll start with the first piece of the question, on Americanizing the assortment, or what the customers expect from a really high-performing U.S. retailer. That starts with getting our assortment right. That’s really been our primary focus of this calendar year is to get our assortment right to meet the U.S. consumer’s expectations. A great example of that is some things that we’ve done in the bakery.
There are some fantastic European products, like the croissant that is crafted in France, shipped over, and we bake it fresh daily multiple times a day in our store. But what we were really missing was a big, decadent American-size doughnut, so we brought [them] in. These are all-new products, all made in the U.S., all up to U.S. consumers’ expectations. A really exciting one is [our] New York-produced fresh bagel. It’s fermented for 12 hours, so it’s genuinely an authentic New York bagel. We retail it every day. It’s buy one, get one free, but every day, it’s 79 cents. The quality of the product is absolutely phenomenal.
PG: These [bagels] are made on site?
FK: They are baked fresh daily, multiple times a day, in the store, [after being] shipped from a New York supplier to our stores chainwide. Then another big thing that we were missing, we were completely devoid of muffins as well. We [now] have two new muffins, a blueberry muffin and then a chocolate muffin that we brought in. So, in our bakery department, we [now] have a perfect mix where you’ve got U.S.-produced products that the U.S. consumer expects, and then you have a great unique blend of some European products that, quite frankly, are just unmatched by any of our competitors within the market. My personal favorite is the Rosemary Olive bread.
PG: How do you determine which features to include in stores? Do you do a lot of consumer research? Do you survey consumers?
FK: I’m lucky enough to [work with] the consumer insights team as part of the chief customer officer role, staying very connected to the customer understanding what they’re telling us and where we can improve and what we know that we’re doing really well. Our customers appreciate our value proposition, our pricing, [but] what we have to work on is some of the layout of the store and some of the adjustments of the adjacency to improve that shopping experience to really get to the ethos of who we are as an organization of simplicity.
Do you know this value equation? It’s price, quality and then what you provide to the shopper that’s coming into your store each day. We have time studies that we’ve done and some heat-map analysis of our stores. A consumer can come to any one of our locations, and on average, they could do a completely full shop, save up to 40% against national brands on prices, and – what we think is really important as well – save 17 minutes of their time during that shop in one of our stores. We view that complex value proposition as delivering on price, delivering on quality, not sacrificing on either one of those, but then also the value of giving them time back to their days, because [it’s] a busier world than ever.
PG: It sounds like you’re constantly fine-tuning that experience and looking at what your consumers are telling you, or what you’ve gleaned from their shopping patterns. Do you use individual stores, or have you used individual stores, as testing grounds for particular programs?
FK: There are definitely some things that we test in individual stores. I won’t name the store in particular, but we do have one store that is kind of our test for our new layout, our new flow of our store, our new adjacency. We do have some really exciting stuff coming up in the pipeline that I’m sure we’ll talk to you guys about soon.
PG: We’re eagerly awaiting that.
FK: One thing we launched nationwide this week is [an enhancement of] the customer shopping experience both offline and how it relates to online. We made some upgrades to our myLidl app. It's our loyalty program. Our customers can typically, on average, save a couple hundred dollars a month by going through it, and so take advantage of even better prices. It has now allowed us to make that customer journey much more simple for them on that app to where they see the myLidl deals for all members, but then there's also the element of personalized offers that come in on time. We have made a lot of improvements on the back end to really enrich our customer data to provide a better personalized offer to the customer.
[RELATED: Consumers Expect More Out of Loyalty Programs]
That went live this past week, and another enhancement that we have [is] quick signup on our registers. It’s really important for any new stores, particularly like Fresh Meadows here, where we don’t have a full pool of customers already signed up on the loyalty platform. We’ll be able to do a quick register right at the point of sale here, type in their phone number to take advantage of all the myLidl rewards, and then we’ll have a follow-up journey with them to go through and do the full-profile buildout and sign up to take advantage of more personalized offers going forward.
That wasn’t something that was there before. For the customer to get signed up to the app on site, they’d have to download it. It’s not a cumbersome process, but it still holds up the line and it can be a little bit stressful on the customer. We wanted to completely eliminate that, make it as quick and easy, seamless [and] painless as possible for the customer to be able to take advantage of all those myLidl rewards and personalized offers.
PG: You mentioned changes to the store layout. Are there particular things that an American customer would expect in terms of store layout that might not be the case in Europe or elsewhere?
FK: Yeah, that’s definitely one thing that we’ve looked at. This store is very reflective of it. It’s a little bit of a smaller store, but we still have the core principles of what we want to [do,] and that’s lead with our fresh products. A lot of retailers say, “Yeah, we want to win on fresh,” but when we say that, we actually mean that and believe that we can and will win on [fresh]. That’s everything from, right when you walk in the door, getting the fresh smell of our bakery, to walking into our phenomenal produce deals that we have running every week. Like today, we got the 89-cent-per-pound strawberry pack, which is like 2016 prices.
So, great value and fresh right at the front of the store when the customer walks in, and then we’ll throw them right into our protein category, which we’ve done a lot of work on. We’ve done a major revamp to our entire fresh meat offering. It just, quite frankly, wasn’t the cuts [or] the packaging that the U.S. consumer expected. It was very much a European program that was taken here to the U.S. We’ve completely overhauled that program [and] seen really great customer response from it. It is a bit of a change operationally for our stores, but it’s allowed us to deliver on a much fresher product, a much more valuable product to the customer as well, and much more in line with what they expect from us.
[RELATED: Majority of Consumers Can Be Persuaded to Spend More on Meat]
PG: I know that a lot of American stores open with fresh, but I think Lidl might be unique in opening with bakery, which is a strong suit of yours. Why was it particularly important for Lidl to fine-tune the shopping experience for the U.S. shopper? Did you feel like you weren’t giving them the optimal experience previously?
FK: I wouldn't say we weren’t giving them the optimal experience previously. It’s maintaining those loyal customers [we already have in the United States], but also appealing to the mass American consumer. We’re a private label-forward discounter, but at the end of the day, we are a grocery store where a customer can come to save 40% on their grocery shop every single week and do a complete full shop with us.
A lot of what I mentioned earlier, just about adjacency, where items are expected to be within the store – that’s the one biggest thing to navigate. We’ve done a consumer poll on bananas to see purchase frequency and things like that. Often, it’s on every consumer shopping list, but sometimes they just forget it. [We ensure] that some of those key items are really prominent to the customer. They know exactly where to find navigational signage across the store, [because we’re] making sure that’s really clear and a seamless shopping experience.
Then also, [we highlight] some of the really cool in-and-out products that we have and the “Middle of Lidl” [general merchandise section]. That’s also kind of what sets us apart as a bit of a surprise-and-delight element, that treasure-hunt experience. It’s making sure that those areas of the store stand out to the customers, because every single week that they come into our store, they’re going to find something new and exciting.
