Dive Brief:
- Lidl announced its U.S. stores will introduce an exclusive “high-end, yet affordable” fashion line from fashion designer Heidi Klum later this year, according to a company release.
- The German retailer, which operates 10,000 stores across 27 countries, will periodically feature clothing assortments as part of its “Lidl Fashion Weeks.” Lidl is set to open its first nine U.S. stores on June 15.
- “At Lidl, we believe high quality fashion should be attainable for everyone and we look forward to sharing this collection with our customers later this year,” Boudewijn Tiktak, Lidl US’s Chief Commercial Officer, said in the release.
Dive Insight:
Clothing, much less “high-end” fashion, isn’t something you’ll find at most supermarkets. But that’s just one of the ways Lidl looks to distinguish itself in a crowded U.S. grocery market. The new line from Heidi Klum is a way for the German discounter to draw in customers, and perhaps even succeed where many department stores are failing.
Nonfood items are a significant piece of Lidl’s merchandising strategy. The company will feature a rotating selection of everything from yoga pants to lawnmowers, all meant to give the stores a treasure-hunt feel. These “Lidl Surprises,” as the retailer calls them, are a popular part of its European stores. They have a way of encouraging shoppers to drop in regularly to see what’s new. It’s the same tactic Costco has used to keep customers coming back to its stores.
Most grocers offer a limited assortment of nonfood items, including greeting cards, toys, kitchen supplies and seasonal items. But these items don’t usually generate much sales volume and are often add-ons to food purchases.
Lidl, in contrast, wants its merchandise to be a differentiator and a sign of the store’s focus on quality. It also could signal the company’s intention to reach more affluent consumers. In England, where Lidl’s 650 stores have disrupted longstanding operators such as Tesco and Walmart-owned Asda, the discounter focused on low- and middle-income shoppers before moving to more upmarket locations.
There are other signs of the company’s intention to reach across the income spectrum. The company offers a limited selection of wine selected through more than 10,000 tastings by Master of Wine Adam LaPierre. Lidl recently touted its many wins at the INDY International Wine Competition.
Can Lidl reach all the shoppers it hopes to reach? The company's pared down, quality-meets-value approach could deliver, but it could very well fail to resonate with American consumers used to a wide selection of fresh goods and national brands. Likewise, stocking a premium fashion brand in the same place where people buy cereal and orange juice could be off-putting.
At the same time, American consumers' demand for fresh items and emerging brands have shown they're bored with the typical supermarket experience. Lidl's east coast entry comes at what seems to be an inflection point for U.S. grocers, and that could pay off handsomely for the German discounter.
