Lidl’s online delivery service: what should they offer?

Lidl, currently the only major supermarket chain in the UK not currently offering an online delivery service, is finally considering starting one, as reported by a few media outlets. This comes after a launch in Ireland last year, using a third-party provider. For the UK market Lidl is said to have registered a holding company, called Lidl Digital Logistics.

Discount chain Aldi has a limited online offering, enabling customers to buy wine and general merchandise such as clothing, children’s toys and DIY tools. Food and non-alcoholic drinks are only available in-store. Using a multi-option steer, we asked Aldi shoppers which product categories they usually buy online:

It will be interesting to see whether Lidl will use Aldi’s limited service model or aim to compete with the likes of Tesco and Sainsbury’s by having a full grocery delivery service. In contrast with Aldi, Sainsbury’s customers can get everything available instore delivered to their homes, including food and soft drinks. 

Only three product categories managed to top 20%, one being ‘reduced special buys’, which attracts value-conscious consumers looking for more substantial discounts. Home & garden stands out as the top category consumers buy online from, perhaps thanks to the retailer offering free delivery of shopping over £20, which is particularly convenient for larger items such as garden furniture, seasonally offered by Aldi.

Over 41% of Sainsbury’s customers shop online for food, according to the steer above, making it the main online shopping category. Buying non-alcoholic drinks online is also popular, with 24%. High rates of food and drink purchases trigger an increased interest in household products, alcohol and health and beauty, which are likely to be picked alongside the main shopping. This is important for Lidl’s delivery service to consider in order to maximise its impact.

Supermarket chains offer online delivery for their customers’ convenience rather than making a profit out of it, and therefore try to keep delivery prices as low as possible. In a split-by-description steer we asked two separate groups of Lidl customers whether they would shop online with free delivery, and £1 delivery, respectively, and obtained the following results:

A large majority of consumers show interest in shopping online at Lidl and are ready to pay a small charge for delivery services. Although £1 might seem too low for a delivery service, other retailers offer it on certain conditions, such as minimum value of shopping and off-peak delivery slots. The only UK supermarket offering free delivery is Waitrose, however they require a minimum order of £60.

Delivery passes promote regular online purchases and are touted as the best money-saving option by consumer finance websites. We ran a Qualified ‘Would Pay’ Pricing steer, asking Lidl shoppers who had been using online shopping elsewhere how much would they pay for a monthly delivery pass from Lidl:

Assuming that the unit cost is below £3.56, the profit maximising price would be £5. This price is comparable with the monthly delivery pass offered by Asda, which is the cheapest such service available.

Beyond helping brands optimise new product development, Vypr can be used for testing a new part of a customer service strategy. Consumer expectations can be gauged using steers targeting particular subsets of our consumer community, for example, customers of a certain supermarket.

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