As Lidl sets its sights on the British mid-market occupied by Tesco, Dominic Mills says there’s only one way Tesco can go – and it’s not upmarket…
It was no doubt with a large helping of schadenfreude that Lidl executives unrolled their first major, co-ordinated, marketing assault on the British market last Wednesday evening.
Their timing gained an added piquancy 36 hours later when Tesco announced another profit warning, slashed its dividend, and promised to cut back its extensive store renovation programme.
The centrepiece of Lidl’s assault is a new £20 million branding campaign which goes live on TV this Thursday (4 September). But the fact that I saw the ad in the upmarket HMV Curzon cinema in Richmond on Saturday evening (ok, I confess: it was an arty Franco-Belgian film) tells you much of what you need to know: Lidl hasn’t just set its sights on the mid-market occupied by Tesco and Sainsbury’s, it wants the Waitrose and M&S shopper too.
For those who can’t wait till Thursday to see the ad, it’s available here on Marketing Week.
It features a fictitious farmer’s market (called the Little Market, ho-ho) where trendy foody-type people (mostly under 40, as far as I can tell) are tempted to try tasty morsels of cheese, meat and fresh produce. And guess what? They are all amazed a) by the price and b) by the fact that it comes from Lidl.
Lidl is on a roll, its rivals are mostly between a rock and a hard place, and the chain has a clear proposition.”
Well, that’s how it looks, but as the latest copy of #LidlSurprises (its weekly offers pamphlet, available in all stores etc) notes, all the people in the ad are actually Lidl customers. This may explain why their ‘acting surprised’ look leaves a little to be desired.
Nevertheless, while the strategy may be bleeding obvious, the price message is relatively underplayed. Those with long memories, however, will recall the similarities the famous Tesco Dudley Moore series of 20-plus years ago, which marked the start of the chain’s relentless drive away from its pile-it-high, sell-it-cheap roots and subsequent climb into the mid-market.
The difference is that the Dudley Moore ads were witty, entertaining and subtle. Lidl’s effort has none of those qualities. But I don’t suppose any of this matters too much.
Lidl is on a roll, its rivals are mostly between a rock and a hard place, and the chain has a clear proposition. And don’t forget that Lidl’s agency, TBWA, is helmed by Peter Soutar who, as former creative director of AMV BBDO, knows a thing or two about supermarket advertising.
In many ways, however, it is what is going on around the ad that is more interesting. First, Lidl is cutting back on carpet-bombing the nation with leaflets. Apparently that looks cheap and sends out the wrong message. Second, it is – as with the TV ad – allowing its customers to become its voice. This means featuring them in press adverts, Twitter, Facebook and so on.
As Lidl says: “From now on, our advertising will feature the authentic, unvarnished voices of our customers. After all, they’re the ones who know us best.”
That is the mark of a confident retailer. And a canny one too, since they will do a lot of the work for Lidl, and the media budget can be cut back accordingly. In its current state, you certainly can’t see Tesco handing over its voice to its customers.
Talking of which, how long will we have to wait to see Tesco’s response, both operationally and then how it communicates any changes via its marketing and advertising?
No doubt Tesco executives are pouring over their Clubcard data in the hope that the answer lies within.”
My bet is that we won’t see much before Christmas. For retailers, the key is to get the product offering right before there’s any point in communicating it. That has certainly been Lidl’s approach.
Over at Tesco Towers, therefore, somewhere near the top of incoming chief executive Dave Lewis’s over-flowing in-tray (where pretty much everything is marked ‘Urgent’ and ‘Important’), will be the positioning question.
Just over a year ago, Tesco and its then newly appointed agency, Wieden and Kennedy, unveiled the first post-horsemeat campaign, an attempt to position the chain as the champion of authentic food. I thought it was pretty feeble and unoriginal then – a ‘plateful of poo‘, to be precise – and Tesco’s performance since offers me no reason to change my mind.
So what now? Well, Tesco’s room to manoeuvre is limited. It can’t go upmarket, and the middle-market is no place for the faint-hearted. So downmarket it must go, which suggests a return to its roots.
Of course Tesco has to get it right, but it can’t afford to dawdle either. With Lidl and Aldi ramping up their efforts, every week that goes by represents another million or so fewer baskets being filled in Tesco aisles. Once gone, shoppers are hard to get back.
No doubt Tesco executives are pouring over their Clubcard data in the hope that the answer lies within. At the same time, the City is speculating that Tesco might sell Dunn Humby, creators of the Clubcard phenomenon.
But here’s an interesting thought: if Clubcard-style ‘Big Data’ is so brilliant, how come Tesco has gone down the toilet in such spectacular fashion? Is the data garbage? Or is Tesco just incapable of analysing it?
Meanwhile, Tesco’s attempt to reinvent itself as a supermarket with a nice media arm attached (i.e. the Hudl, Blinkbox, Tesco TV etc) will also come under the spotlight.
Increasingly, this looks like a self-indulgent exercise that involved playing with some shiny new toys, and wilfully ignoring the boring but critical business of fixing the retail proposition. And, you have to ask, if retailers dabbling in media was such a good idea, why has no-one else has tried?
In the UK, the Christmas advertising season is now the equivalent of the US Superbowl. Numerically speaking, there’s still 116 days to go. But, with so much hanging on it this time round, Christmas will no doubt begin even earlier than usual.
