Finnish Lidl challenges market leaders with customer loyalty app

Germany-based supermarket giant Lidl has rolled 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.

Lidl Finland’s commercial director Mikko Forsströmsaid 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.

Available for Android and iOS, the Lidl Offers & Leaflets app requests device permissions to access to the user’s location, camera and storage.

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.