On July 2, Lidl Hungary turned off its monthly coupon scheme and replaced it with Lidl Points, where every 100 forints spent earns one point. The points themselves can be redeemed via 250 different coupons, and points can last up to 24 months.

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Tesco already provided something similar to their customers. With their Clubcard system, Hungarian shoppers have earned one point per 100 forints for many years already, so it seems like Lidl is only now catching up.

The fact that two of the country’s largest grocers are now running the same promotions says a lot about the business landscape. Retention rates have never been so important, and the points are designed to keep you coming back.

How Points Pay

The math on a single shop doesn’t really benefit anyone. At Lidl’s rate, a 10,000-forint basket earns 100 points, so rewards build slowly rather than arriving in a single day. 

That’s the design, however. Collecting a large number of points on the first or second visit isn’t the plan. They want you to shop there and there only. That way, you can build up points gradually, meaning more visits to their store (online and offline).

It also somewhat gamifies the supermarket experience. You want to feel like you’re getting a deal, so you save points (and spend more) to eventually receive something in return.

Does This Happen in Other Industries?

Regardless of location or sector, businesses thrive on having repeat customers.

Airlines, for example, do it with memberships. Wizz Air, Hungary’s own low-cost carrier, sells an annual discount club to those whose savings only show up on the second and third booking.

Bingo chains run similar promotions as well. One club gives its existing club members a free 10 no-deposit bingo bonus when they register online. This helps introduce the customer to their online services, hoping they’ll engage with the business both online and offline. 

Even cinemas do it with paid memberships. Members usually get a certain number of free films per month or a discount on food or drinks, keeping them coming back for more at a better rate.

What Hungarian Shoppers Should Expect Next

Grocers will keep rewarding the return visit. Whether through points, special deals, or anything else, for that matter. Retention is where the revenue is for them, so they must strategize ways to get you to return.

They’re looking long-term as well. Lidl, for example, has coupons that expire within 30 days after activation. With their point system, however, they last up to two years, so they’re really stretching the horizon to collect points.

Second Visit Is the Real Price

Hungary’s grocers have stopped competing only on what a basket costs today and have started competing on whether or not you come back.

The first visit is a one-off, if anything, a cheap win. However, the second, third, and fourth visit? That’s where the revenue can be generated for them.

Because of this, they’ll continue to run offers that incentivize customers to return, hoping to turn them into lifelong customers, not just one-off grocers.

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