Recently Tesco found itself in a legal dispute with competitor Lidl, which has resulted in Tesco needing to change their branding strategy. Tesco’s Clubcard Prices programme, aimed at offering exclusive discounts to its loyal customers, had long been represented by a distinctive logo: a yellow circle on a blue square. However, this logo is now off limits for Tesco, after they lost a lengthy legal battle with Lidl.
Capitalising off another’s reputation
Lidl’s mission statement is around providing their customers with the best value for money by running their business in a simple and sustainable way.
Lidl is also known for its eye-catching yellow and blue branding in a circle, which led to comparisons between their branding and that of the Tesco’s Clubcard Prices.
Lidl claimed that Tesco’s Clubcard logo infringed upon its copyright and unfairly capitalised on Lidl’s reputation for providing excellent value to customers.
What is the mere exposure effect?
The mere exposure effect is when people tend to like things more after being exposed to them repeatedly. The more we see something, the more we’re likely to prefer it. It’s a psychological principle that explains why familiarity often leads to preference.
Did Tesco use the mere exposure effect to their advantage?
Lidl’s market success is no secret. The fast-growing grocer retailer’s straightforward yet memorable branding has become widely recognised among consumers. This recognition of Tesco’s logo and its colours might have increased their attractiveness, causing consumers to link their products with similar quality and value. In other words, the mere exposure effect may have been drawing shoppers from the Lidl’s consumer market subconsciously.
Customer loyalty can make or break a business
For Tesco the familiar Clubcard Prices logo, which featured on promotional materials and in-store signage, will be replaced with a new design very soon. How this will be translated by its customers, only time will tell, and we will see whether their branding changes have a negative effect on customer retention.
While similar branding colours and logos may not appear to be significant at first thought, the long-term effects certainly could be.
Yellow, blue and red: common retail colours
Selecting branding colours in retail takes careful consideration. Choosing colours means thinking about how they are going to make customers feel and making sure that the associations align with the brand’s identity and their target market preferences.
So let’s look at some of the primary colours used in the industry.
- Yellow
Retailers often use the colour yellow to represent value because it’s bright, cheerful and as it’s widely used, it’s often associated with affordability. The colour catches attention and signals discounts and deals, making shoppers feel like they’re getting good value for money. - Red
Red is a colour often used among food retailers; think about Iceland, Home Bargains, Costco, Spa and Farmfoods. It’s used because red is known to stimulate appetite, making it the perfect colour selection for food-related businesses as it encourages consumers to shop. - Blue
Blue is often used too – think of the likes of ALDI and Co-op. That’s because blue is associated with trust, reliability and professionalism. By incorporating blue into their branding, grocers aim to convey a sense of trustworthiness and competence, which can attract and retain customers.
Lidl known for their lookalike knockoffs
The irony lies in Tesco being called out for copying Lidl’s branding, while Lidl, known for its copycat products, often gets away with it.
Lidl’s strategy of producing copycat products stems from a desire to offer customers affordable alternatives to well-known brands. By closely replicating popular products, Lidl aims to provide consumers with options that are comparable in quality but priced more competitively. This approach allows Lidl to cater to budget-conscious shoppers while also capitalising on the success of established brands.
Lidl using the mere exposure effect to their advantage
While Lidl has long used the strategy of imitating established brands to reap the rewards of the mere exposure effect, Tesco has been reprimanded for a small pricing logo that uses similar colours.
While Lidl appears to benefit from its emulation strategy, Tesco faces criticism for a minor design element, highlighting a discrepancy in how such tactics are perceived and regulated.
Or perhaps, Lidl have a really great legal team.