Dennis Claus, vice president, strategy at APPLY, looks at the strategies that physical-first discount retailer Lidl could deploy to stay ahead in the incoming agentic shopping era.
It’s hard to miss the rise of German discounters. Both Lidl and Aldi have gone from plucky underdogs to dogged rivals of Britain’s supermarket sector, enticing shoppers with a stripped-back, discounted experience.
And it’s a strategy that’s working. Lidl’s recent results show UK sales up 10.8% to £13bn, alongside plans to open more than 50 new stores.
These results point to a discounter with a strong proposition that’s moving quickly. But the challenge now is to keep that growth going long into the future, especially as Britain’s shopping habits change.
The next test is whether Lidl can keep shoppers coming back as AI makes it increasingly easy to find the best discounts anywhere.
Making AI shop, not slop
The emergence of LLMs and AI chatbots means we’re increasingly seeing a new avenue for how people plan, and potentially complete, their weekly shop.
Recent research from Rithum found over a third (36%) of shoppers have used AI to help buy groceries. But that’s different from handing over their entire weekly shop to an agent to make decisions on their behalf. That’s something we may not see today, but over time agents will play a bigger role in deciding where people spend their money.
For Lidl, this presents an interesting challenge. Unlike many of its competitors, it doesn’t offer online grocery shopping in Britain. Its digital experience centres on Lidl Plus, an app offering discounts, points and rewards for shopping in-store. This investment in the app shows they are trying to get ahead of the agentic shifts that are happening – creating a destination with unique value and where they can connect with shoppers beyond the transactional.
As shopping becomes increasingly agentic, the question is whether people will still choose to visit Lidl’s stores or app, rather than shopping the best deal through an agent.
Competing on connection
Think about the everyday shopping list. An agent looks at what’s available and finds the best deal. Meaning a retailer risks becoming a repository of products and prices, and there’s no longer a unique reason somebody has chosen to visit.
Interestingly, Lidl is better placed for that future than many retailers when it comes to price. But it also can’t risk losing the other reasons people currently seek it out.
In the Netherlands, where I’m from, its fruit and vegetables are part of that appeal. You go in for the quality and end up buying everything else because it’s cheap. In the UK, a shopper might walk in looking for crisps, but leave with a new barbecue from the infamous middle aisle.
That’s part of the magic built into its in-store experience. But how much of that survives when an agent makes the decision? Competing on price may serve Lidl very well in agentic commerce, but it can also become a race to the bottom.
There are two valid paths forward. Lidl could prepare for shopping through agents, which would mean looking beyond its current in-store model. Or it could use the same technology to give people more reasons to keep coming to it directly.
Making experiences personal, not personalised
For that second path, Lidl already has a starting point in Lidl Plus.
The app connects the retailer with shoppers beyond the store, with active users growing 23% according to its latest results. But there’s an opportunity to make that relationship more valuable.
Ten years ago, everyone was building mobile apps. Then came the argument that people didn’t want yet another app. Now retailers are revisiting them because, if you can deliver unique value through an app, you give people a reason to stay connected to your brand.
That’s hard to do, but agentic tools make contextual experiences less of a lift to build.
Loyalty programmes need similar thought. Too often they’ve become a way to pay people to stay. You buy something, you collect your points, you get a discount. An agent can optimise all of that, including shopping around for the best offer. But it doesn’t create much of a human relationship.
What’s important now is making experiences personal, rather than just personalised. On your birthday you might get a slew of emails offering you 10% off. But that’s not a gift. It’s you buying something.
Instead, a more useful experience would recognise the context around someone. Like on their birthday, instead of sending a generic 15% discount code, an agentic experience could recognise that they typically buy themselves a gift the following week, have been building a fitness routine over the past year, and that rain is in the forecast.
It could use those insights to time an offer for the following week, suggesting a local gym or fitness experience, alongside a relevant discount on products to support their routine. It’s about offering something that feels genuinely considered and useful.
And it doesn’t have to end at the checkout. Retailers need to think about the moments they don’t own and offer customers something beyond the shop floor.
For Lidl, this could be something like partnering with a theme park during the summer holidays. That doesn’t mean just offering discounted tickets. What if someone could also use their Lidl account to arrange a lunch bag for collection at the park?
With a bit of creativity and the right technology, a partnership becomes more valuable than a discount.
Make your experience feel like magic
During my time of writing this, Lidl has already launched a new recipe builder through its app – building an experience that becomes the reason people keep coming back, even more than the products themselves.
But for other retailers, there’s a risk of overcomplication, building elaborate AI chatbots that people don’t actually want to use. Instead of forcing technology, one question to consider is how do you make your experience feel like magic?
Just like a magician and audience, if you can see how the trick works, it’s not magic any more. People should be thinking, ‘Wow, how did they do that?’ rather than noticing the technology.
For Lidl, the answer may include both paths. Its pricing gives it an advantage when agents compare deals. But a discounter doesn’t need to deliver a discount experience every time it interacts with a person.
The decision retailers need to make now is whether they’re building for a future where agents do the shopping, or using the same technology to make sure people still want to come to them.
Both paths are valid, but they require different strategies. It’s a decision worth making today.
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research. Click here to subscribe to the FREE newsletter sent straight to your inbox. Why not follow us on LinkedIn to receive the latest updates on our research and analysis?
You are in: Home » AI » GUEST COMMENT Lidl is winning the high street. Can it win the agentic shopping era?
GUEST COMMENT Lidl is winning the high street. Can it win the agentic shopping era?
Dennis Claus
Dennis Claus, vice president, strategy at APPLY, looks at the strategies that physical-first discount retailer Lidl could deploy to stay ahead in the incoming agentic shopping era.
It’s hard to miss the rise of German discounters. Both Lidl and Aldi have gone from plucky underdogs to dogged rivals of Britain’s supermarket sector, enticing shoppers with a stripped-back, discounted experience.
And it’s a strategy that’s working. Lidl’s recent results show UK sales up 10.8% to £13bn, alongside plans to open more than 50 new stores.
These results point to a discounter with a strong proposition that’s moving quickly. But the challenge now is to keep that growth going long into the future, especially as Britain’s shopping habits change.
The next test is whether Lidl can keep shoppers coming back as AI makes it increasingly easy to find the best discounts anywhere.
Making AI shop, not slop
The emergence of LLMs and AI chatbots means we’re increasingly seeing a new avenue for how people plan, and potentially complete, their weekly shop.
Recent research from Rithum found over a third (36%) of shoppers have used AI to help buy groceries. But that’s different from handing over their entire weekly shop to an agent to make decisions on their behalf. That’s something we may not see today, but over time agents will play a bigger role in deciding where people spend their money.
For Lidl, this presents an interesting challenge. Unlike many of its competitors, it doesn’t offer online grocery shopping in Britain. Its digital experience centres on Lidl Plus, an app offering discounts, points and rewards for shopping in-store. This investment in the app shows they are trying to get ahead of the agentic shifts that are happening – creating a destination with unique value and where they can connect with shoppers beyond the transactional.
As shopping becomes increasingly agentic, the question is whether people will still choose to visit Lidl’s stores or app, rather than shopping the best deal through an agent.
Competing on connection
Think about the everyday shopping list. An agent looks at what’s available and finds the best deal. Meaning a retailer risks becoming a repository of products and prices, and there’s no longer a unique reason somebody has chosen to visit.
Interestingly, Lidl is better placed for that future than many retailers when it comes to price. But it also can’t risk losing the other reasons people currently seek it out.
In the Netherlands, where I’m from, its fruit and vegetables are part of that appeal. You go in for the quality and end up buying everything else because it’s cheap. In the UK, a shopper might walk in looking for crisps, but leave with a new barbecue from the infamous middle aisle.
That’s part of the magic built into its in-store experience. But how much of that survives when an agent makes the decision? Competing on price may serve Lidl very well in agentic commerce, but it can also become a race to the bottom.
There are two valid paths forward. Lidl could prepare for shopping through agents, which would mean looking beyond its current in-store model. Or it could use the same technology to give people more reasons to keep coming to it directly.
Making experiences personal, not personalised
For that second path, Lidl already has a starting point in Lidl Plus.
The app connects the retailer with shoppers beyond the store, with active users growing 23% according to its latest results. But there’s an opportunity to make that relationship more valuable.
Ten years ago, everyone was building mobile apps. Then came the argument that people didn’t want yet another app. Now retailers are revisiting them because, if you can deliver unique value through an app, you give people a reason to stay connected to your brand.
That’s hard to do, but agentic tools make contextual experiences less of a lift to build.
Loyalty programmes need similar thought. Too often they’ve become a way to pay people to stay. You buy something, you collect your points, you get a discount. An agent can optimise all of that, including shopping around for the best offer. But it doesn’t create much of a human relationship.
What’s important now is making experiences personal, rather than just personalised. On your birthday you might get a slew of emails offering you 10% off. But that’s not a gift. It’s you buying something.
Instead, a more useful experience would recognise the context around someone. Like on their birthday, instead of sending a generic 15% discount code, an agentic experience could recognise that they typically buy themselves a gift the following week, have been building a fitness routine over the past year, and that rain is in the forecast.
It could use those insights to time an offer for the following week, suggesting a local gym or fitness experience, alongside a relevant discount on products to support their routine. It’s about offering something that feels genuinely considered and useful.
And it doesn’t have to end at the checkout. Retailers need to think about the moments they don’t own and offer customers something beyond the shop floor.
For Lidl, this could be something like partnering with a theme park during the summer holidays. That doesn’t mean just offering discounted tickets. What if someone could also use their Lidl account to arrange a lunch bag for collection at the park?
With a bit of creativity and the right technology, a partnership becomes more valuable than a discount.
Make your experience feel like magic
During my time of writing this, Lidl has already launched a new recipe builder through its app – building an experience that becomes the reason people keep coming back, even more than the products themselves.
But for other retailers, there’s a risk of overcomplication, building elaborate AI chatbots that people don’t actually want to use. Instead of forcing technology, one question to consider is how do you make your experience feel like magic?
Just like a magician and audience, if you can see how the trick works, it’s not magic any more. People should be thinking, ‘Wow, how did they do that?’ rather than noticing the technology.
For Lidl, the answer may include both paths. Its pricing gives it an advantage when agents compare deals. But a discounter doesn’t need to deliver a discount experience every time it interacts with a person.
The decision retailers need to make now is whether they’re building for a future where agents do the shopping, or using the same technology to make sure people still want to come to them.
Both paths are valid, but they require different strategies. It’s a decision worth making today.
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research. Click here to subscribe to the FREE newsletter sent straight to your inbox. Why not follow us on LinkedIn to receive the latest updates on our research and analysis?
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