Europe’s largest discount retailer Schwarz Group is updating its tech capabilities to strengthen its European foothold and enter new markets.
Strong investments are being ploughed into new concept stores for Schwarz Group’s Lidl and Kaufland banners, complemented by new technology.
As the German giant seeks to take on mightier, more traditional rivals in many markets – such as the US – it is steadily implementing an IT strategy designed to enable ever more efficient processes, as well as facilitating entry to the digital realm.
Bucking its old hard discounter model, Schwarz Group is determined to harness sophisticated technology in the years ahead to compete directly with mainstream grocers, and woo more varied and diverse customer groups.
Building an IT foundation
Over the years, both Lidl and Kaufland have transformed their IT landscapes.
Lidl is currently upgrading its IT systems to create a fully-integrated business intelligence environment, based on expanded data warehouse architecture from Teradata in combination with SAP Retail and its Business Warehouse module.
By migrating to SAP’s HANA platform, the discounter will be able to evaluate merchandising performance in real time.
Reportedly, Hadoop – an open-source software framework for distributed storage and processing of large data sets – will also be implemented.
This move will allow the retailer to access huge amounts of unstructured data available from third parties, its retail operations and customer interactions, including data sourced from social networks.
The SAP and HANA platforms will become the cornerstone of Lidl’s IT strategy when entering the US market, allowing the discounter to offer customers relevant assortments and systematically analyse data to better understand and react to customer behaviour.
Taking the digital highway
As the Schwarz Group banners test more upmarket stores, they are also attempting to augment the shopping experience with digital elements. Seeking to appeal to digitally-savvy shoppers, Kaufland recently launched a ‘scan and pay app’ in Romania.
Although not a new innovation, this represents a noteworthy digital leap for a discounter.
“This move will allow the retailer to access huge amounts of unstructured data available from third parties”
Given Carrefour’s digital initiatives in Romania, Kaufland seems to be keeping pace digitally to further enhance its appeal, in a market where it is already the leader.
Furthermore, Kaufland has deployed electronic shelf labels across its European estate. Not only will this improve customer experience, but it will allow fast and efficient price changes – important when responding to dynamic price changes from online rivals.
In April, Kaufland also launched its first ever shopping app in Germany, while Lidl surprised the sector last month when its Italian arm introduced a smartphone app dedicated to its Cien beauty range.
Kaufland and Lidl seem ready to engage and connect with shoppers digitally – a significant shift away from their traditional methods.
The Schwarz banners are also keen to test the ecommerce waters, with Lidl expanding its online offer in European markets and Kaufland set to follow by 2017.
This would see Schwarz further build out its capabilities as an omnichannel grocer, able to compete on equal terms with traditional players like Tesco, Carrefour and Walmart, for example.
Steadily, the discounters are seeking to develop a 360-degree view of their processes, as well as customer shopping habits and preferences that can be used to enhance their overall physical and digital offer.
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