Submitted by: Tasneem Mahbub 19/06/2017
German food retailer Lidl has been rapidly expanding across Europe, with an impressive 7.5% UK sales growth over the past year. And key to that growth, is print, says Sam Gaunt, Head of Media, Lidl.
“We’re confident in what print is delivering for our sales and that counts for the full breadth of printed communications”
I know that our customers respond well to print,” says Lidl’s Head of Media Sam Gaunt. “We use econometric modelling to measure different channels and it gives us the confidence to know the effect of our marketing on sales. It’s no accident that we’re investing to the levels we are in the print industry – we know it delivers for us.”
Anyone who has kept a casual eye on the supermarket industry in recent years will struggle to argue with the man who oversees the German grocer’s advertising strategy. Over the past decade, Lidl has been rapidly gaining ground on the ‘big four’ of Tesco, Sainsbury’s, Asda and Morrisons. In the 12 weeks to 29 January 2017, Lidl commanded 4.5% of the UK market, meaning their combined share of the UK market, along with fellow budget-conscious German retailer Aldi, has grown by 50% in three years.
Last year, Lidl overtook Asda as the supermarket with the biggest traditional media ad spend, and last Christmas they upped their spend on newspapers alone by 14% year-on-year, according to Nielsen figures. Their competitors are starting to take heed too. As Campaign magazine editor Maisie McCabe noted in January, “Some of the biggest retailers returned spend to press advertising in the final months of the year.”
The facts bear that out: in the same period Tesco and Waitrose’s press spend was also up, while Aldi and Morrison’s both devoted over a quarter of their Christmas budget to print advertising. And while British supermarkets enjoyed a record festive period in sales terms, Lidl saw handsome sales growth of 7.5% compared to Christmas 2015.
So what does Gaunt, whose role requires him to “deliver competitive advantage through media, technology and insight”, think about the role print has to play in the marketing mix for an ambitious, upwardly mobile retailer such as Lidl, whose public image has evolved in recent years from, as Gaunt frankly puts it, “a badge of shame to a badge of pride”?
“Our audience isn’t as downmarket as it’s been portrayed,” he says, “and that’s demonstrated by our recent partnerships with The Mail titles and the Metro. There was a time when you would have only expected to see us in the tabloids, but increasingly we’ve seen a great response from a more upmarket readership for some of our communications. The Times called some of our customers ‘The Lidl classes’, and this is absolutely the case. When you look in our car parks now you see quite a few prestige models and you may be surprised at the affluent areas we’re expanding into.”
Clearly Lidl’s competitive pricing, allied with a strong marketing message surrounding the quality of their products, has been a key factor in their growth. But in reaching the British public with that message, they have consistently found that print channels are the most effective.
“Printed communication is particularly important,” says Gaunt. “We distribute millions of leaflets every week and our business has been built around that communication channel in the UK. Along with point of sale, our media builds out from the leaflet. Leaflets in store, in local areas and national press advertising have been the foundations of our media strategy.”
Digital – a false dawn?
This is not to say that Lidl haven’t diversified their marketing approach to include digital channels alongside more traditional formats, but Gaunt feels that brands have got too carried away with the futuristic promise of digital. “There’s absolutely no doubt in my mind that the marketing industry has become distracted by digital and it’s high time a lot of advertisers woke up to the true performance of different media channels,” he says. “There are some basic principles we adopt in interrogating different communication formats.
The great selling point of digital is the targeting it offers, but a lot of brands have got distracted by that. We also have to look at impact – the digital space is very cluttered and all the formats just add to the clutter and the negative user experience of that channel. “I think a lot of brands focus on the theoretical reach you’re getting to an audience,” he continues, “and when you couple that with the targeting and the data it offers, it all sounds like this perfect wonderland. But then you examine what that user experience is: is it a little banner amongst hundreds of thousands of other little banners? “Meanwhile, you look at a newspaper ad, particularly the full-page, which is a really key format for us, and it offers that attention-grabbing quality – however short that period is. It may only be a couple of seconds but you’ve got that reader’s attention. And with a powerful creative it can be a very effective form of communication.”
The direct approach
Meanwhile, although they have spread their marketing spend more widely in recent years, Lidl’s continued reliance on direct mail and door drop is a lesson for other grocery brands considering abandoning these supposedly old-fashioned marketing channels. “There’s a negative perception of door drop and direct mail, but it gives you that quality of time with the consumer,” says Gaunt. “In the busy world in which we live, there are certain media that can talk to customers in that moment of downtime, and when a well-designed piece of communication comes through the letterbox, it can persuade people to spend an important bit of time with your brand. It only needs to be a few seconds, but it’s enough for a brand to connect with a potential customer.”
The Lidl approach
“There’s something uniquely Lidl about our media strategy,” says Gaunt, and you get a feel for that Lidl character when you walk in their stores – a refreshingly unpretentious approach to shopping where quality and value are what matters. You might find your fruit and veg next to an offer on dustpans and brushes, but surveys have repeatedly found that they beat the big four on quality as well as price, while last year Good Housekeeping named them UK Supermarket of the Year. Meanwhile, the abundance of catalogues at the checkouts again remind us that print plays a key role in every stage of Lidl’s customer experience. “We’re confident in what print is delivering for our sales,” says Gaunt, “and that counts for the full breadth of printed communications, from point of sale to the leaflets we give out, through to the newspaper advertising. It’s all played a very important role in driving our growth and it will continue to do so.