The competitive landscape of grocery retail is shifting faster than ever. Generative AI has quickly integrated into businesses as a strategic tool for competitive advantage, not an optional upgrade. It drives innovation, streamlines operations and, in the Dutch grocery market, this shift is already reshaping customer expectations.
Generative AI is no longer a “nice-to-have” capability. Although still in the early stages of its adoption lifecycle, many firms are already integrating it into their customer interaction journeys to deliver more personalised and data-driven experiences. AI tools can provide tailored recommendations and instant feedback that humans may not be able to offer as efficiently. In the grocery industry, retailers such as Albert Heijn and Jumbo have already implemented AI-powered assistants within their applications, offering recipe suggestions and customised product recommendations. Even though Lidl is the biggest grocery chain in the Dutch supermarket sector, the absence of similar AI-driven tools represents a risk, mainly because customers expect convenience and hyper-personalization in their interactions. If the company fails to address this gap, it may lose its current digital relevance to competitors that provide these personalised and tailored shopping experiences.
Moreover, generative AI enables sellers to address customers’ needs beyond traditional loyalty programs. In general terms, the Dutch population is health-conscious and sustainability-oriented, and with the current constant price fluctuations, also increasingly budget-sensitive. Generative AI aims to respond to these changes in consumer behaviour by offering additional features and capabilities such as real-time promotions, customised meal plans and product suggestions. By meeting these new expectations, Lidl could shift from a transactional relationship with customers (discount-focused) to a relational one (experience-focused).
Our project proposes integrating an AI assistant into the Lidl Plus application to transform it from a discount-based loyalty app to a proactive tool. This integration would not only help Lidl to catch up with the current market demands, but it also enhances nearly every component of its business model, with personalised recipes and products, location-specific promotions, and the possibility to locate products in-store, etc. Lidl is able to address both of the main components of its value proposition: customer satisfaction and low prices. Our analysis confirmed that customers would find the assistant intuitive and useful, while Lidl’s existing infrastructure and cost-leadership culture align well with AI implementation.
In conclusion, the question for Lidl is not whether to implement GenAI, but when and how quickly they can achieve it. While generative AI offers clear strategic advantages by evolving Lidl Plus into a multi-service hub and unlocking platform economics benefits, the company must navigate important considerations. Data privacy regulations such as GDPR and the emerging AI Act require careful implementation planning. However, the cost of inaction outweighs the complexity of responsible AI implementation. The retailers that win in discount grocery retail will be those that combine unbeatable prices with genuine customer understanding and hyper-personalised experiences.
