Silence may be the key to Lidl’s Lithuania strategy

There is very little information available about Lidl’s plans in Lithuania, from details on when Lidl is planning to open its first store in Lithuania, to how many there will be in all across the country, what kind of products will populate their shelves or how much they will cost.

The German global discount supermarket chain operates over 10,000 stores in 28 European countries and generally makes no secret of its expansion plans. In 2018, Lidl is to make its entry into the United States and Australian markets.

Is tiny Lithuania, with a population of under 3 million, too insignificant for Lidl to bother with a promotional campaign?

Something only the big can afford

That is certainly not the case, said Rytis Buračas, board member of the Lithuanian Marketing Association (LiMA). On the contrary, silence is a conscious strategy that has worked brilliantly so far.

“Obviously, the silence gives rise to all kinds of talk and speculation, without Lidl having to do anything. Apple does something similar – when everyone knows that something is happening, but have little idea what that is exactly, everyone is waiting. Waiting creates tension, people come up with all kinds of ideas what might or might not be the case, rumours proliferate and here you have the hottest piece of news without any investment into communication,” Buračas said, adding that only the biggest market players can afford to toy with such a strategy.

He adds that Lidl might have consciously chosen an unconventional strategy: allow rumours to spread and then, one month before the grand opening, they might throw a media conference and present their vision, mission, goals and everything else they choose.

“True, the Lithuanian market is not a big one. But if after all these years of considerations, to-ing and fro-ing, buying and selling land plots they [Lidl] decided to work here, it means they understand they will have to invest. Especially bearing in mind the intense competition we have here. Backing down now would be too costly, therefore in order to break into the market and become a successful player, they will need to invest in communication, too. I do not think they have not considered that,” Buračas said.

“In Lithuania, competition among supermarket chains is fierce. The market is electrified, therefore any message from the majors is of interest. This is a very fertile ground for silence, which gives results.

“It would be bad if they remained silent amidst negative news. So far, however, the air has been neutral or even positive; for consumers, the more competition, the better, especially since Lidl’s selling point is low price,” Buračas said.

Lidl is a solid player from Western Europe, which is also a good news for Lithuanian consumers, he adds, quoting a recent example of the Belarusian Fresh Market chain which failed to carve out a piece of the market and had to leave.

Norfa opened the door

Marketing strategist Linas Šimonis agrees that Lidl’s way of arousing interest has been very apt. It is safe to bet that people will flock to the new supermarket during the first days just to satisfy their curiosity.

“Some people will be curious to see if there are any products different from the offering in other supermarkets, others will be interested in prices, but everyone will have something for them. If any of these or both prove to be true – different products or lower prices – popularity with customers is guaranteed,” Šimonis said.

Many Lithuanians are already familiar with the brand and have shopped at Lidl supermarkets abroad, so they know that the company positions itself as a budget chain. The shops often have a feel of a warehouse, which might also be a conscious decision to drive the point that the buyer is not paying for unnecessary glitter.

Šimonis said there is already a supermarket chain in Lithuania that positions itself similarly, Norfa. Recently, however, he says he has noticed signs that the brand is taking a different direction.

“Norfa has become more polished now, to its own detriment. Especially in Vilnius, where some of its supermarkets are trying to outshine Maxima. A shop cannot be both polished and cheap. It is hard to buy – polish costs money, after all. Therefore Norfa itself has opened a door for a new budget chain to enter,” he said.

Successful precedents

Šimonis notes that there is one more advantage for Lidl from keeping silent. With over two decades of a market economy, Lithuanian consumers have developed an immunity to advertising, which requires a more subtle approach to PR. It is much more effective to have the media talk about it rather than to air advertising videos.

“In my opinion, the best PR campaign in Lithuania was conducted 20 years ago, when Kraft Jacobs Suchard Lietuva, as the company was called back then, bought the confectionery factory in Kaunas. If anyone can remember those times, everyone was talking about a German factory paying several million dollars or marks – what seemed incredible sums of money at the time – for a local one. It was on TV, radio, front pages of all newspapers,” Šimonis recalls.

Two decades ago, supermarket chains were still in infancy and not a single coffee maker was an undisputed market leader.

“In a supermarket, you would see shelves with boxes of coffee from different makers. But then one day you come in and see a stand twice as big as all the others, with green boxes of Jacobs’ coffee. What did Lithuanians do? They felt they had to buy one just to try.

“This is how Lithuanians got used to the taste of Jacobs and when the ads started airing on TV, it had already become the most popular coffee in Lithuania,” Šimonis said.

Is Lidl going for something similar?

So far, one can only speculate, but experts are convinced that when the time comes, the chain will find ways to reach out to potential customers. In the meantime, Lidl representatives in Lithuania deny that their silence is a calculated move.

“It is not our conscious intention to create an aura of mystery by holding back our opening dates and other strategic plans. Until the start of the operations, we do not conduct active external communication and limit ourselves to responding to reporters’ questions,” said Agnė Dalia Gaižauskienė, marketing and PR head of Lidl Lietuva.

“We hope for the public’s understanding, since the exact opening date depends on the progress of our preparations. At the moment, we are pursuing active expansion. A regional company is setting up in the logistics centre built in summer 2015. Meanwhile we are putting together the offering of the future shops and are hiring staff. We will announce the opening day when we are ready.”