Convenient truth

grocery market - changing consumer trends

Notions of convenience have significantly sharpened in the last few years, with competition for convenience stores intensifying through increased take up of online grocery shopping and the widespread expansion of supermarket giants into the sector with smaller format stores such as Tesco Express and Sainsbury's Local.

We believe there are four ways in which convenience stores can utilise their strengths and take advantage of changing consumer trends to survive and thrive:

Community feel

Convenience stores typically have a highly localised catchment area. In an increasingly digital and disintermediated world, there are still many people looking to engage and connect. We have seen a trend of stores distributing local produce and supporting community events. In Bethnal Green, Simply Fresh found success selling items grown in a community garden and Fresh and Go label items that "give back to the local community".

There’s also a growing provision of 'dwell-space' for convenience providers to offer fresh coffee, events and services to drive footfall and encourage time in store. By moving away from the one size fits all approach, convenience retail can reinvent themselves as a community hub and a platform for emotional engagement, as well as offering a less formulaic offer than the small format stores of the larger chains.

Extreme convenience

Operators in the market who utilise their knowledge of the local catchment area can gain a significant advantage. Local convenience stores can complement groceries with tailored services to provide a one-stop destination for their community. Historically, this has included postal services and cash machines in remote areas, but increasingly organic and fresh produce in health-conscious suburbs, or click and collect services and ready-made meals in areas with a population of time-poor workers have made inroads.

Furthermore, software as a service and third party logistics solutions now mean that convenience store chains can also offer digital home-delivery services that mirror that of their supermarket competitors, as evidenced by Co-Op's partnership with the Finnish company Digital Goodie (seen in the image above) and the launch of its two-hour food delivery service at the end of March.

Faster response

In addition to closing the data and technology gap, convenience stores have the benefit of more personalised relationships with their customers and the potential for a faster transition from idea  to implementation. Using the right analytics, range and performance management tools and approaches to understand and respond to the latest events and trends for the local catchment can be a key differentiator for convenience when done properly.

Getting the basics right

Today's consumers expect a lot from convenience stores: long hours, a curated product range, fast services and modern environments – as well as reasonable pricing. Mastering the basics such as easily-navigable store formats, a compelling and relevance range (including, increasingly, better quality own label products) and well-developed visual merchandising,  provides a strong foundation on which to build, inspire and engage.

Growth and competition in the convenience sector is set to remain strong. Convenience and symbol groups are in prime position to take advantage of changing consumer demands for extreme convenience, instant gratification and personalisation.

Shelley Guo