Aldi and Lidl have not built well-rounded relationships with their customers even as they continue to grow, while Tesco and Sainsbury’s are seen as the most rewarding supermarkets by their regular shoppers, according to new research. Loyalty marketing agency, ICLP reveals that when it comes to supermarkets, UK shoppers have much stronger and deeper relationships with [...]

Aldi and Lidl have not built well-rounded relationships with their customers even as they continue to grow, while Tesco and Sainsbury’s are seen as the most rewarding supermarkets by their regular shoppers, according to new research.
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Loyalty marketing agency, ICLP reveals that when it comes to supermarkets, UK shoppers have much stronger and deeper relationships with Tesco and Sainsbury’s than they do with discounters, Aldi and Lidl. ICLP surveyed over 1,000 UK consumers and found that Tesco shoppers (37%) and Sainsbury’s shoppers (34%) were more than twice as likely to say that they felt that their custom and loyalty was rewarded than Lidl shoppers (16%) Aldi shoppers (9%).
Key findings:

  • 71% of Brits do not feel that their loyalty is rewarded by their regular supermarket
  • Tesco performs best, with 37% saying that they felt that their custom and loyalty was rewarded, closely followed by 34% at Sainsbury’s. This figure dropped to 9% for Aldi and 16% for Lidl
  • Only 1 in 4 Brits believe that they get something back when they share their personal information with their preferred supermarket brand. Consumers’ trust in protecting personal data varied across the supermarket sector. 52% of Sainsbury’s shoppers and 35% of Tesco shoppers said that their personal information was treated with respect and that they benefited from sharing it with them, compared to 26% of Aldi shoppers, and 20% of Lidl shoppers

Furthermore, 34% of Sainsbury’s shoppers and 31% of Tesco shoppers feel that they are rewarded by offers tailored to them, while just 3% of Aldi shoppers and 4% of Lidl shoppers felt this way. According to Nielsen, the two discounters now account for a combined 12.3% of the UK grocery market, a figure which has been on an ever upward trajectory for years. However, the inability to build rewarding and reciprocal relationships with their customers show a potential long term vulnerability for the two challenger brands.
While Aldi and Lidl ranked highly when it came to trust in discounts and offers (63% for Aldi and 52% for Lidl), consumers did not trust these supermarkets with their personal data and did not feel that they would get anything back in exchange if they shared this information. Only 26% of Aldi shoppers and 20% of Lidl shoppers said that they felt their personal data would be treated with respect (compared with 52% at Sainsbury’s and 35% at Tesco), and only 9% of Aldi shoppers, and 4% of Lidl shoppers thought that they would get something in return for sharing their information (compared with 31% at Sainsbury’s and 26% at Tesco). While Aldi and Lidl are reaping the rewards as UK incomes are squeezed by inflation, they are failing to build long term brand loyalty that extends outside of offering low prices.
Thanks to Tesco’s Clubcard and Sainsbury’s Nectar reward programmes, shoppers at these supermarkets felt that their repeat custom was being recognised and rewarded, although both are still falling short of building deeply devoted relationships, and hence are still losing customers to their discounter rivals. Working with Professor Rogge from the University of Rochester, ICLP applied Sternberg’s Triangular Theory of Love to the relationships that shoppers have with brands. According to this model, a deeply devoted relationship is one that involves commitment, intimacy, and passion. 13% of Sainsbury’s shoppers were found to have a devoted relationship with the brand, whereas none of the Aldi shoppers surveyed were in a devoted relationship.
Nonetheless, 71% of Brits who named a supermarket in ICLP’s survey still believe that their loyalty is not being rewarded by their selected retailer including market leaders Sainsbury’s and Tesco. Meanwhile, a total lack of reward programmes at Aldi have meant that only 1 in 4 of their shoppers said that they felt valued and not just like another customer, while Lidl’s relatively new ‘My Lidl’ programme is yet to shift consumer opinions when it comes to loyalty.
As part of the research, ICLP asked shoppers questions in order to ascertain how they felt about the relationships they had with particular brands that they considered to be their preferred retailers. The results demonstrated that:

  • Reward programmes are falling short across the board: 71% of Brits do not feel that their loyalty is rewarded by their named supermarket. Tesco was revealed as the top supermarket in ICLP’s research, with 37% saying that they felt that their custom and loyalty was rewarded, closely followed by 34% at Sainsbury’s. This figure dropped to 9% for Aldi and 16% for Lidl
  • Supermarkets are not making the most of personal data: Only 1 in 4 Brits believe that they get something back when they share their personal information with their preferred supermarket brand. Consumers’ trust in protecting personal data varied across the supermarket sector. 52% of Sainsbury’s shoppers and 35% of Tesco shoppers said that their personal information was treated with respect and that they benefited from sharing it with them, compared to 26% of Aldi shoppers, and 20% of Lidl shoppers
  • Trust in discounts and offers is low: Only 1 in 3 UK shoppers believe that their preferred retailer is always honest in the way that they discount their products. Aldi and Lidl were the most trusted supermarkets, with 63% and 52% of their shoppers respectively saying that they were honest in their discounts
  • Supermarket shoppers don’t feel special or unique: Only 31% of UK shoppers say that their preferred supermarket brand makes them feel valued and not just like another customer. Similarly, 69% said that they were not appreciated by their preferred brand, even if they were a regular customer

Jason De Winne, General Manager at ICLP, commented: “The battle of supermarket customer acquisition has been raging for years, but with challengers Aldi and Lidl, the focus has shifted from customer acquisition to retention. The UK’s longer standing supermarkets are unlikely to benefit from engaging in a never-ending price war, and Aldi and Lidl have already built strong brand recognition for their deep discounts and no frills service. While their market share has reached impressive new heights, Aldi and Lidl lack a well-rounded relationship with their customers.
“UK shoppers want their supermarkets to reward them better and to make them feel like individuals, not just like everyone else. To keep customers coming back, supermarkets need to put in place loyalty programmes that use personal data to deliver bespoke rewards, recognition, and money-can’t-buy experiences. Across the sector, supermarkets have a huge opportunity to build truly devoted relationships with their shoppers by rethinking their reward programmes and go beyond simple points collecting.”
Methodology
*Deeply Devoted Research undertaken by Survey Sampling International across 1,004 UK consumers, on behalf of ICLP, July 2016.  Random error on a sample of this size is +/- 2.2% at the 95% confidence level.
 http://www.iclployalty.com.