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Lidl challenges market leaders with customer loyalty app

The German supermarket chain opened its first store in Finland in 2002 and now commands nearly 10 percent of the market.

Lidlin Plus-kortti kännykässä
Lidl supermarket's loyalty programme is moble app-based. Image: Markku Pitkänen / Yle
Yle News

Germany-based supermarket giant Lidl will roll out its loyal customer programme in Finland, a move that will likely put pressure on the country's two grocery store market leaders, S-Group and Kesko.

Store loyalty programmes are very popular in Finland, particularly at groceries and other establishments run by Lidl's two top competitors. Retail giants S-Group and Kesko, which jointly command around 90 percent of the market, have both offered loyalty programmes to their customers for decades.

Lidl has not been in Finland very long. The German chain opened its first supermarket in Finland in 2002 and has since grown to 186 stores across the country and now holds 9.6 percent of the nation's grocery market.

Meanwhile, retail mega-firms S-Group and Kesko command 46.4 percent and 36.1 percent of the market, respectively.

Not a two-tiered scheme

Lidl Finland's commercial director Mikko Forsström said the firm does not aim to split its customers into two groups.

"We can hold on to all our customers. Our regular sales and price levels will remain the same for everyone, anyway. This isn't about moving promotions to the app. This is for customers who want to join up and give the app permission for marketing purposes, to gain even more benefits from Lidl," Forsström said.

The app, called Lidl Plus, will be launched to customers later this year, the company said.

The managing director of the Finnish Grocery Trade Association, Kari Luoto, said the benefits of customer loyalty membership are twofold.

"There are two things here - on the one hand it's about rewarding the customer and on the other the store gets customer information to guide their operations," Luoto explained. He added that he's confident all of the grocery store chains will handle the data they receive with care, saying the most important thing for those companies is maintaining consumer confidence.

Article corrected at 12.20 on 22 February to make clear that the app will be available later this year and is not currently available, as previously stated.

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