Recently I was in the Lidl discount store in Germany (should be mentioned, as Lidl also operates in other countries), when shopping, which we regularly do there as a family, there was a surprise at the checkout during the checkout process. The discount for the fish, there was not, well, not for us normal people, but only for those who had the Lidl Plus App use. In this article, I explain what it's all about and how Lidl is creating a two-tier society at the checkout.
More and more companies in the retail sector are using their own apps and bonus programs within the apps with the aim of providing customers with better suggestions and, in some cases, allowing customers to pay for them, for example with LIDL Pay.
Bonus programs of the retail trade
But why is it so important to force this app on customers at the checkout?
The reason is not the interest in being able to offer customers better prices, because it's about something else.
The reason: Data and accessibility.
Lidl Plus discount on a digital price tag, 2024, taken by Petr Kirpeit
Imagine you read the newspaper, a company has to pay a lot of money to have offers printed as advertisements in the newspaper and to advertise products in the offer, so that the potential customer, perhaps sees the picture and reacts to it, but the reaction cannot be measured directly, but only indirectly through more sales.
But what if you could reach people in other ways?
Social media! Yes, with social media you can also arouse interest and show offers to people relatively cheaply and thus encourage them to buy, with the advantage that you can see how many people have seen the respective offer and the advertising.
This can be done via your own social media pages and through favorable advertising, so you can see which offers are relevant and well received by which customer segments. And with social media, there are also algorithms that decide for people which posts are relevant.
A few years ago, supermarkets began to conquer the digital sector with online stores (you don't just want to leave the field to Amazon 😉 ), including the store from Lidl Online. Where you can shop online at any time. You can offer the customer products 24/7, but the customer has to take action themselves and go to the online store to make a purchase.
No, you need something that everyone has with them, that you can make user-specific offers to people and determine interest profiles in order to identify potential target group demand and make enough purchases accordingly.
The solution: a mobile app
The Lidl Plus app offers discounts, coupons, promotions and digital receipts.
What looks like nothing special at first glance is actually a powerful tool for retailers. For Lidl, the app does much more than just display discounts.
Once installed, you have to register your e-mail address, date of birth, payment information and bank details, which you need to be able to pay via Lidl Pay. Lidl therefore receives the customer's name and e-mail address. This is nothing special in itself, as most apps require you to create a new account so that you can use the app.
Lidl Plus with additional items in a store in Saxony-Anhalt, 2023, photographed by Petr Kirpeit
Lidl Pay - more than mobile payment
And by using Lidl Pay, the company also receives information about what the customer has bought. How is that possible? When you debit the account, you only see that the amount has been deducted from the bank account, which you pay via the app at the checkout.
This is true in principle, but when you shop with the app, the products you have bought are assigned to the LIDL Plus app user's account, so you know what the user buys, when and in what quantity.
With Lidl Pay you can then pay via smartphone in the app and discounts are deducted, a little gimmick, you can then view the receipt digitally in the app at any time.
The cash register knows that too, you always get a receipt for the purchase, whether by cash or card payment, that can also be used, right?
Not quite, because only the payment is processed at the checkout, i.e. what was purchased and whether cash or card payment was used, but there is no customer information there, this is stored in the app or on the server from which the app retrieves the data. Without Lidl Pay, it is therefore not possible to see what the customer has purchased.
Although it is possible to track card payments using identification codes to determine when the card was used for which products, this alone is no more helpful than determining how many goods need to be reordered. When paying in cash, you are also anonymous and therefore cannot be technically tracked (however, this is technically possible with any card payment, not specific to Lidl).
Optimized merchandise management
But you can do even more with the app. For example, to find the nearest supermarket in the app, you usually need GPS or enter the zip code, and Lidl knows a bit more about how many customers in the area are interested in this Lidl store.
This is not even far-fetched, many apps ask for GPS location information when using the app in order to be able to offer the user added value, in exchange you then receive information on how many potential customers are in the vicinity of the respective markets, which means you also know how many customers are interested in offers and with push notifications, you can control which products and promotions can be advertised in certain markets and thus test faster which products, promotions etc. lead to higher sales faster.
Lidl Plus, also when you visit a Lidl in the Czech Republic, you are greeted with the Lidl Plus offer, which saves you money. Photographed May 1, 2024, Czech Republic, by Petr Kirpeit
The problem
While I have now listed the points that apply to the economic aspects, which I can undoubtedly understand as an entrepreneur, I see a problem here with the discounts for app users only, because in order to save money, you are forced to install something that you don't need and then share data that you don't want to share. So it's not free, it's a trade:
For discounts, I exchange the money I save for my consumption data.
As someone who enjoys chocolate, it was a little harder for me to resist when a cheap chocolate bar at Lidl cost €0.69 per bar, but for Lidl Plus customers, only €0.39 per bar. 2 bars of chocolate for under 1€ and that in exchange for not really important information .... right? I couldn't let myself get carried away and could resist, but it was a good try 😉
Now this is not in itself reprehensible, that a supermarket wants the attention of customers and wants to optimize its product range and promotions, but I find it questionable, and above all unfair, especially if the company is one of the basic suppliers, that you want to establish a 2-class society as normal.
Older people or people without a smartphone are disadvantaged by this and thus become second-class people at the checkout. I think it's reprehensible that older people, who often have a small pension, are being put at a disadvantage because they can't benefit from savings if they don't have a smartphone, which can be problematic for many older people. The smartphone is also a tool or accessory, nowhere is it written that you are not allowed to leave the house without a smartphone, and yet it is taken for granted that you must always have your smartphone with you. Is that absolutely necessary?
I don't think that's right, although I understand the intention to attract more people to the app, but as a primary care provider, you shouldn't have to use such methods.
What do you think?
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