By Darrin Duber-Smith
There was much fanfare when the German grocery giant entered the U.S. market, opening a headquarters in Virginia and challenging long-held turf in that state, Georgia, Delaware, and the Carolinas. The plan is to gain a nice following and expand outward from there. Indeed, Lidl enjoyed an initial burst of customers as it introduced its successful small-format, discount pricing model that features a limited selection of inexpensive, store-brand goods. Lidl siphoned off 11% of customers in the markets it entered during its first few months, but the fun didn't last very long at all.
Lidl failed to keep those customers, and the company should be very, very worried. Wal-Mart and Kroeger have already regained their respective market shares suggesting that the consumers that did visit the stores were not happy enough to return. In other words, the success achieved in international markets (namely Europe) might not translate into success in the U.S.
Marketers will need to begin conducting marketing research to see what's going on. Perhaps consumers don't like the selection, or the brands themselves, or maybe something is wrong with the store layout or aesthetics. There are many possibilities, and the key is to do some homework. And do it soon. This is why it can be a good idea to enter an unfamiliar market slowly, rather than en mass, so that marketers can adjust the business model before too much has been invested in a flawed effort. Lidl has been smart in this respect, but it looks like marketers have indeed failed in some major way. Luckily the company ha slots of cash. Now they just have to find out what they missed.
What marketing research techniques would you recommend Lidl marketers employ, and what information would you want to get from the market if you were conducting the research?
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