Prague’s Kaufland Revamp Hints at an Economy-Wide Shift

ABOUT TEN YEARS AGO in Prague, German discounter Kaufland brightened stores, added in-house bakeries, and trained staff to smile. The result? Shoppers lingered longer and baskets grew—even though the chain kept its “discount” prices. This makeover previewed the experience economy shift now reshaping retail, banking, travel, and telco markets across Europe and the GCC.

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Why Price Alone No Longer Protects Market Share

• Crowded discount space: Penny Market and Norma launched rival “modern bakeries,” eroding Kaufland’s price edge.
• Service commoditization: Volume and low prices once differentiated firms; today they are table stakes.
• Rise of the experience economy: Harvard Business Review warned in 1998 that value would migrate from goods to memorable experiences.

Exhibit 1 – From Service to Experience Value Curve

Digital Disruption Fuels the Experience Imperative

• New entrants from nowhere: Fintechs, MVNOs, ride-hailing apps attack high-margin niches.
• Information parity: Social reviews break brands’ monopoly on product knowledge.
• Click-and-collect grocery: Even brick-and-mortar chains now compete with delivery platforms.

The Cost of Standing Still

A “discount only” playbook fails when a rival offers similar prices plus a better experience. Czech mid-tier grocers already roll out online shopping, echoing the UK boom. Delay means higher reacquisition costs and shrinking margins.

Act Now: Make Experience the Core Offer

• Audit every touchpoint: Map moments that hurt emotion, not just time and cost.
• Invest in digital: Smell, sight, sound. Kaufland’s bakery aroma is the offline version of Netflix’s personalized picks.
• Measure emotion weekly: Replace annual surveys with real-time sentiment scores.

For a step-by-step method, download the White Paper: From Satisfaction to Emotionally Connected

Bottom Line

The experience economy shift is here. Follow Kaufland’s lead: turn price-led stores into experience hubs before a digital challenger captures hearts—and wallets.