EXCLUSIVE: A New Direction for Lidl US, Part 2
Lidl has been in the United States since 2017, but it was somewhat of a bumpy ride until the company eventually hit its stride in this country. Now, however, with a new leader at the helm, the European limited-assortment store chain is ready to unveil an experience more tailored to the U.S. consumer. To find out more about this new vision, Progressive Grocer talked with Lidl US CEO Joel Rampoldt about the division’s next phase. Part one of the conversation dealt with Rampoldt’s background, what attracted him to Lidl US, the new approach he’s taking out and the team he’s put in place, while part two covers what customers can expect in the aisles and beyond, as well as lessons that Rampoldt has learned from customers and associates that he’s applying to shape his strategy.
Progressive Grocer: What are you doing or planning to do in terms of promotions, programs, other implementations that shoppers will eventually notice in the coming months?
Joel Rampoldt: We’re going to be relaunching the fresh protein business for the 4th of July holiday. It’s a great time to do it, obviously, because it’s one of the biggest grilling events of the year. So you’ll see big changes in the product that’s on the shelf, what the product is, how it’s packaged, how we brand it, how we present it. Obviously, that takes time.
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Some of the things that we’re doing immediately is working on our circular. In fact, one of the changes that we’ve made is to the front page of our circular, above the fold. We really want to emphasize fresh items, fresh poultry, fresh ham, strawberries, tomatoes. In the past, we had a lot of different things on the front cover of the circular, but we want to focus it down to the things we really want to stand for and be known for. For us, that’s fresh, and that’s something that we’ve already done that’s already starting to take hold.
PG: One of the aspects of Lidl that I find maybe the most interesting in some ways is what a British consultant I met referred to as the “Middle of Lidl,” which are all of these unique items that are carried by the store. Do you have any plans to tailor that section more for an American audience?
JR: Yes, it’s a good question, and yes, we do. The way I think about this is that the “Middle of Lidl” is a great traffic driver for us, and it works differently in different countries, but it’s the same basic idea, which is, I’m going to come in every week because I have no idea what they might have for people. We have great capabilities in this. We’re only able to do that because we have people who are really experts in sourcing great product at great prices, without getting into specifics. We do that really well. But right now, what I’m focused on is our core. Our core is great food and great prices, and that’s all the things that we’ve been talking about.
Over time, we are going to make some changes to the nonfood area to make sure it’s relevant to the U.S. consumer. One of the things I think is really important in that area is that we’re seasonally relevant and that we have the right products for the right holidays, since the calendar drives really in the U.S. much more than in some other countries. The calendar drives what categories people are interested in, and we need to really be right on top of that and really sharp. But that will come in time.
PG: It’s a fun treasure-hunt experience that I don't think is normally associated with food shopping, in terms of unexpected products. There’s more general merchandise than your average American supermarket would offer.
JR: It’s definitely a different approach, and the approach is surprise and delight, but that has to rest on a foundation. That’s the core, and delivering the core excellently, day in day out, that's our focus.
PG: Have you been soliciting any kind of feedback or doing focus groups with shoppers to see what they’re looking for in the various markets where your stores are located in the United States? What are you doing in terms of your direct communications with shoppers?
JR: We have a lot of great sources of information. We talk to our customers all the time. We reach out to them and ask them what they think, and they reach out to us and tell us what they think. But what I find most rewarding is being in the stores and talking to the customers and talking to the employees. By the way, here at Lidl, the way we do things is everybody who works here at headquarters does what we call “feet on the ground” on a regular basis, which doesn’t mean you show up in the store and wander around and try to look busy. You actually go to the store and work.
You’re paired with someone, and you typically work with that person or two people throughout the entire day. Last week, I was working in the bakery, so I worked with a guy all day baking various items, and that means I spent seven hours with the guy. So you can have a real conversation about what your customers tell you, what are they asking for that we don't have, what do they love the most about us, what are they disappointed in?
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That, for me, is a really rich thing. I love spending time in stores in that way. It’s great when you talk to an employee – that employee talks to hundreds of shoppers, and he or she can tell you exactly what they’re hearing from the market, and then you try to combine that with all the other information sources. We have put together a picture of, OK, this is where we’re doing really well, we need to double down on that; this is where we have a gap, we need to make a change.
PG: So, not only do you discover all these interesting customer insights through working there, from being in contact with actual shoppers and with the associate, but then you also get to find out from the associate about his experience, exactly what his job is, and any pain points that associates in that position might experience.
JR: That’s right. In fact, before I even came to work for the company, I went to Europe and I spent several days working in one of our stores in Ireland. I worked in the fresh area, we were packing out fresh fruits and vegetables, and the associate told me that the way we do things here is we make everything as simple as possible so we can do it as fast as possible. And I thought, that’s a pretty good summary, that’s how you get to this point where you can have the best quality at the lowest price. When you work in a store with that mindset, you think [when encountering a system that needs streamlining], this is not as simple as possible, we’re not making this as simple as could be for the store employees, and that’s ultimately going to reflect on what our customers see. So, you can come back and say, 'Look, here’s how we can do a better job here.'
PG: In keeping with this continuing execution in this new direction, we’re going to see the transformation of these core departments and then eventually across the whole store. What will the timeline of this transformation be?
JR: Over the course of the next several months after [the 4th of July protein relaunch], we’ll work our way across the store rapidly.
We have great customer loyalty. Many of our customers use the myLidl app. We see how often they come in. We have great customer loyalty, but we always want more. Of course, we want more customers, we want our customers to come in more often. But one of the reasons I’m so confident is I know that as we do things to make the store better and make the offering better, our customers are going to see it. Coming in, they’ll see it, they’ll notice it, and that will translate into results.
PG: And attracting new customers that you didn’t have before.
JR: What typically happens, in my experience, is customers, when they see something, they will tell their friends, and the friends will come in and try it. If they like it, they will do the same.
PG: Going forward, what do you want the shopper and the employee experience at Lidl US to be?
JR: The U.S. consumer has unbelievable choice. They have, on any given day, a fantastic set of choices they could go to. And we want to be the first choice, because we have the best quality, and then we have the best price. We’re also an easy way to shop. Our stores are smaller; we don’t carry every single item that you could imagine. We do that for a reason: It’s easier to get in, get what you need and get out. You can get what you need, and at great quality and a great price. We want to be our customer’s first choice. We recognize that they’re always going to go to many different stores to get everything that they want, but we want to be their first choice, and we want them to really love shopping with us, because they get what they need and it’s very low hassle for them. It’s the same for our employees.
We want to be the first choice for our employees as well, because we provide a dynamic, interesting work environment where their work is really meaningful. I think that going out there and serving customers, providing Americans with great food and great prices, is really very meaningful work. We want all of our employees to feel the same way, and for us to be the employer of choice.
