Schwarz Group’s discount banner Lidl is to end its German entertainment streaming service Lidl You by the end of March, Lebensmittel Zeitung reports. The digital music and video platform was operated in co-operation with Deezer and Maxdome.
The service was launched by Lidl just one year ago. Any remaining credit on Lidl You account cards can be spent on streaming by 28 February. After that shoppers can use the cards to pay for items in Lidl’s online shop.
If you asked someone on a German high street if they have heard of Lidl You the answer would very likely be “What are you talking about?”. Although Lidl promoted the service heavily one year ago, it now seems to have largely faded into obscurity.
One of the reasons is that it was launched at a time when several German retailers were all attempting to gain ground in the streaming business. This could have made it more difficult for shoppers to keep individual offerings in mind. The retailers' motivation was probably that they had enjoyed the success of their affordable prepaid mobile phone cards. And they were probably jealous of the sales growth curves of operators like Netflix, Spotify and especially Amazon Prime, while feeling the need to embrace digitalisation.
Adding digital services, however, has turned out to be a very tricky business. There seems to not be enough room for small players in the highly consolidated market where only a few dominant providers obtain significant market shares.
The Lidl example is also another one to prove that retailers cannot simply jump on any digital bandwagon of their choice and expect it to be successful. Sainsbury's in the UK similarly acquired digital video, ebook and music services to complement its business, only to offload these again as non-core operations in 2016. Even digital prodigy Amazon announced this week that it is to close down its UK music and event ticketing business, after failing to gain significant traction to launch this in the US where large event companies dominate.
In Lidl's case, it could perhaps show that even the largest retailer in Europe is still taking baby steps in the digital world. Or maybe Lidl You was simply a marketing gimmick to help the chain portray a more modern and trendy image and lure in younger shoppers – currently the most sought-after target group of the discounters.
It is a very likely scenario that we will see more of these services being shut down. If they are not used as hollow marketing elements to show a broad and sophisticated online offering and to showcase expertise in the digital world.
With contributions from Senior Retail Analyst Lisa Byfield-Green.