While last week, Lidl created riots by offering PS4 at 95 euros, the brand has just announced the marketing of a piano for an unbeatable price of 449 € in September. But why and how does the hard-discounter offer such “punch” operations?
Lidl announced this week that it will market a piano in September for an unbeatable price of € 449 in its stores in the west of France. “The first piano of this level elsewhere far exceeds 1000 euros,” explained to Capital Michel Biero, purchasing director of Lidl France. “If it works, it will then be extended to all of France”.
Lidl, the specialist in “punch” business operations
The German brand is renowned for its operations at “aggressive” prices. It had already been talked about last week, by offering the Playstation 4, a Sony game console, at only 95 euros (against 299 euros in other brands), on the occasion of the opening of a new store in Orgeval (Yvelines). Overwhelmed by the situation and facing the large crowd gathered in front of the doors, the management had to remove the product from its shelves.
Last May, Lidl had already put on sale a sewing machine on sale, at 79 euros, also causing a rush in the stores. The stocks were gone in just a few minutes. Similarly, in June 2019, his cooking robot “Monsieur Cuisine Connect”, a copy of the Thermomix, at a price of € 359, had caused real riots.
“An offer that generates store traffic”
“Lidl has always made interesting and aggressive promotions. Bread machines, cooking robots or laptops: each time they are boxes!”, Underlines Jérôme Parigi, deputy editor in charge of distribution at LSA. “It is part of their identity to regularly make non-food mega promotions,” he continues. “It helps generate traffic and bring customers to the stores.”
An explanation shared by Olivier Dauvers, specialist in mass distribution. “The principle of promotion is to give reasons for frequentation to customers beyond those they might already have. Lidl is a store that sells food, so customers come there to fill their cupboards. give them additional reasons to come, nothing better than products that are not naturally on their shopping list and that they did not think about. “
In addition, the brand of “hard-discount” is positioned each time on products very sought after by consumers and inexpensive. “This contributes to their ‘image-price’, knowing that Lidl is the French brand that has the best, far ahead of Leclerc for example”, specifies Jérôme Parigi. “The sale of the food processor has also generated relationships with its customers,” explains the professional. Indeed, Lidl has created a website specially dedicated to Mr. Cuisine Connect and offers many recipes to users.
Purchasing power and negotiated rates
But how does Lidl offer its customers products at such attractive prices? “We have to distinguish two cases,” explains Olivier Dauvers. “That of the PS4, infrequent, where it is local destocking, and that of organized national promotions, as for the robot cooker or the piano.”
In the second case, Lidl has such purchasing power (the brand manages 10,500 stores in 29 countries) that the brand manages to negotiate prices that defy all competition. “Lidl buys in very large quantities on a single product and in general, for the whole world. Thus, it will not buy for a store or a country, but for all Lidl who want to follow the operation”.
In fact, the cooking robots have not been sold only in France, but in other countries of the world. They were manufactured for Lidl in China, with a single model and in very large quantities. “The brand manages to concentrate its purchases on a very limited number of models and with very high quantities, and thus succeeds in breaking prices.”
Lidl also prepares operations with its suppliers well in advance. “The Monsieur Cuisine Connect food processor has been planned for a long time with the supplier. It is this long-term relationship that will allow such prices. Prices with very little margin on it. advertising “, specifies Jérôme Parigi
More specials to come?
Regarding the promotion on PS4, it was a destocking. As Olivier Dauvers explains in his article, Lidl had organized two years ago with Sony, a double national promotion on PS4 televisions and consoles. After the operation, Sony had recovered the unsold items, but certain packaging being damaged, the Japanese firm had sent Lidl 400 game consoles. “The brand kept them for two years and this year decided to distill them in small batches small batches, during store openings, without advertising. As the commercial life of PS4 is over [une PS5 est sortie récemment], selling at a loss is allowed, “he explains.
In any case, for the specialist, these “punch” operations could develop in the future. “As a matter of principle, as soon as consumption is tough, and it is likely that this will be the case in the coming months, promotion becomes more important. If brands want customers to be interested in them, they have every interest in offer them promotions that justify traveling. “
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