Every Wednesday, Yahoo invites you to get to know a business better. Little secrets, anecdotes, unusual stories, don’t miss the opportunity to wow your friends. Focus this week on one of the favorite retail chains of the French: Lidl.
1 – You probably mispronounce his name
Despite its success across Europe, many customers continue to flirt with Lidl’s name. If you say “Lid-eul”, you are on the wrong track. As Lidl is a German company, its pronunciation is Germanic. Ideally, you should say “Lee-dul” to be right.
To continue to impress your friends, know that the owner of the “Lee-dul” stores, Dieter Schwarz, 81, is at the head of a fortune of more than 40 billion euros. Which makes him the richest man in Germany. He is the heir to his father Josef Schwarz, who founded the blue and yellow brand in 1930. The next time you shop at Lidl, you are bound to think about it. Don’t thank us.
2 – Red to bait
Like Ikea, Lidl relies heavily on its catalog to make people want to come. To the point of making it an essential communication tool? It is very likely since the catalog represents two thirds of the advertising budget of the company, according to the program Capital broadcast on September 6 on M6.
Distributed to 12 million copies each week, the prospectus is very attractive with a neat layout. With or without reduction, many prizes are placed on an impossible to miss red background. The goal ? Always give the customer the impression that they are getting a good deal. Stopping the distribution of the weekly catalog would drop sales by 20 to 30%, according to the sign.
Thanks to this trick, the company is doing well and saw its turnover, constantly increasing, jump by 7% last year.
3 – How Lidl manages to cut prices
“Our range includes 90% of own brands available only at Lidl”, underlines the German brand. The advantages of selling your own brands are twofold. This makes it possible to eliminate intermediaries and to better control manufacturing costs in order to fix prices. Thus, Lidl can achieve more margins than with national brands because the starting prices are much lower.
Another explanation for the low prices displayed by Lidl: the offer is much smaller than at Leclerc, Auchan or Carrefour. Each store offers nearly 2,000 items to its customers compared to an average of 60,000 for the largest hypermarkets. This limited variety allows Lidl to trade very large volumes at the lowest prices.
4 – His promotions drive the French crazy
Wireless AirPods at less than 20 euros, Lady Gaga’s piano at 449 euros, a PS4 below the symbolic bar of 100 euros … For several years, Lidl has become the specialist in aggressive promotions. “Lidl has always made interesting and aggressive promotions. Bread machines, robot cookers or laptops: each time they are boxes!”, Says in the columns of La Dépêche Jérôme Parigi, deputy editor in charge of distribution at LSA. “It’s part of their identity to regularly do non-food mega promos,” he adds.
The French approve. Almost every exit of a non-food product causes a crush in its stores. Last June, an exceptional promotion on the PS4 console sold for 95 euros instead of 300 in a store in Orgeval (Yvelines) had forced the gendarmes to intervene.
A year earlier, the release of “Monsieur Cuisine Connect” had caused a big crowd in its shelves. The next promo not to be missed? A Silvercrest stainless steel fryer available since Thursday at the unbeatable price of 34.99 euros.
5 – Employees to promote products
Who said you necessarily need big stars to advertise your products? Not Lidl, since the German brand trusts some of its employees to promote certain products. As Capital explains in one of its reports (see below), Tamara, a Lidl cashier, has been selected to be the gastronomy muse. His role ? Record tutorials on YouTube to tout the benefits of a juicer or food processor.
A double hat that allows a handful of employees to put butter in the spinach and Lidl to save money. Still according to Capital, Tamara would be paid up to 3,000 euros per year for her services. If cooking isn’t your thing, you can also tinker with Julian, play sports with Audrey or even garden with Ronan.
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Episode 8 – Lego
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