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How convenience stores are meeting shopper needs

Living in a remote village means I am reliant on our local convenience store, as are many other residents – given the volume of people that are always in there!  And it’s not just my village store that is seeing this success – along with discounters and online, convenience stores are one of the key growth channels in the UK. This growth is demonstrated (and fuelled in part) by expansion in the channel from the major multiples. Tesco has expanded from just 100 convenience format stores in 2000 to over 1,700 Express stores today, as they respond to the desire from shoppers to make food and grocery shopping better fit in around their lives.

Convenience stores are all about servicing the local community by meeting the shopper needs for the missions they are fulfilling. In my community, there is a mixture of working professionals and families. Having spent some time snooping in people’s baskets (a pastime of mine I really must stop doing!), I would say their main missions/needs, aside from the traditional confectionery, tobacco and news mission are – the essential top up (milk and bread etc.) and meal for tonight. So what has the store done to cater for these needs?

Essential top ups are catered for very well – both milk and bread are easily accessible as soon as you enter the store. It’s a myth that putting these items at the back of the store encourages shoppers to buy more – in fact it only serves to annoy them, and as such acts a long-term barrier to attracting shoppers to the store for this type of mission. The traditional thinking was that by placing these items at the back of the store, shoppers would impulsively purchase other items on their way to buy their essentials items.  It doesn’t work that way, because shoppers don’t work that way.  When shoppers are on a task focussed mission (such as an essential top up), the blinkers are on and they filter out any unnecessary information that is not relevant to the task in hand.  Anything else is just wallpaper and is ignored.  It is therefore better to get shoppers to their essential items as efficiently as possible, and then look to influence their purchasing from that point on.  This is where the layout in my local store works very well for shoppers. The route from the essential items to the till takes shoppers past impulse items like confectionery, DVDs and key offers at the point when the blinkers are off and shoppers are much more likely to spend incrementally.

The store has recently been refurbished, and it’s very obvious that attracting and appealing to meal for tonight shoppers has been a key target. First of all, fresh fruit and veg is now the first thing you see as you enter the store (it used to be packaged cakes). Having fresh first in flow creates a good initial impression and also allows you to complete your meal building mission more easily. The store has also invested in signage and attractive displays which add to the “fresh” appeal. This addition certainly makes it more acceptable to buy your basic fresh produce from this store, overcoming a traditional fresh quality barrier for the channel.

The success of the layout continues as you move from produce to meat and into dairy – allowing you to buy the perfect pudding! They also have some clever dual sites which further enhance a mission based layout, with cooking sauces and chilled wine displayed close by as an example. Within a few minutes of entering the store, you can pick up an entire meal for tonight, parking easily outside the store and being only a few minutes away from home. What could be easier?

The range in store is not huge – but it has at least one or two key brands for everything you could need – satisfying that emergency “run out” mission, and reducing the decision time at fixture via this simplified range – a feature which has also been a key driver of success in the discount channel.

The key barrier to convenience stores is often price – which in my store can be an issue. However, with lots of clearly communicated deals on categories like crisps, chocolate and wine, you can still feel like you are getting a bargain – and end up with items in your basket you didn’t even know you needed – with most of them visible (and most importantly accessible) whilst you are queuing (which you often are!)

With the macro trend of increased “little and often” shopping, convenience stores are going to be a key channel of focus in 2015 and beyond. To win within convenience stores, understand the c-store shopper.  Consider the key missions visiting these stores.  Are your categories visible and relevant to these missions? Have you got the range specifically tailored to meet the needs of shoppers in this location? And are you overcoming the barrier of price by demonstrating value for money?  By understanding more about your shoppers within these stores, you can develop a growth driven strategy for the channel that enables you to benefit from its anticipated growth.

Savvy shopping tactics

My name is Rob and I am a shameless shopper….

… there, I’ve said it.  I am unashamed to say I will split a big shop into two smaller £40 shops to take advantage of a loyalty programme.  I make use of multiple online grocery accounts to utilise free delivery coupons.  On an ongoing basis, I plan our family meals for the week, then I use a price comparison site to compare the price of high ticket items before deciding where to shop.  I am not on my own however, and if you do not employ at least one of these tactics, you are in the minority.

This is not shameless shopping, this is savvy shopping and this is the landscape within which we operate.

The savviest tactic of them all, and the one that has caused the most seismic shift in the UK grocery landscape, is the rise of multichannel shopping.  Shoppers shopping across multiple channels to better meet their food & grocery shopping needs.

Multichannel shopping is primarily driven by the desire to save money; paying reduced prices for goods and making money go further by reducing waste.  This has driven more frequent, smaller basket missions, and has seen the power shift into the hands of the shopper, as they pick and choose where to shop to best meet their needs.

Take me for example.  I shop online to bulk buy cupboard staples.  I top up throughout the week as required across the supermarket, hypermarket and convenience channels (depending on which one best fits into my plans that day).  I visit a food discounter each week to bulk buy soft drinks, and I visit a high street discounter for toiletries and household products.  This is typical multichannel shopping behaviour.

The retailers I visit also cover a diverse spread.  A recent addition to my repertoire of retailers has been Waitrose.  Thanks largely to the influence of his grandparents, my 2 and half year old son has taken a shining to Waitrose apple and elderflower sparkling water.  Sadly, I kid you not.  Having been bought up myself on Rola Cola and Council Pop (that’s tap water, to anyone who hasn’t heard that expression), it pains me to say one of my most common shopping trips is to head to Lidl to buy soft drinks for myself before heading across the road to Waitrose for the “sparkly juice” my son is currently favouring.  Although the driver may be unusual the practice is not, with many people now shopping at both food discounters and the high end supermarkets.

So what drives shoppers between channels, and as such fuels this multichannel landscape?

The key driver for mutichannel shopping is to save money, however the convenience multichannel shopping brings should not be underestimated.  Shopping across multiple channels may take up a larger amount of time than one large weekly shop, but the key for shoppers is how this time is used.

Thanks to retailer expansion, shoppers are now better able to visit stores in a location and at a time convenient to them.  Visiting a town centre store during the working day, an out of town store on the way home from work, even conducting a top-up mission at the petrol station.  This may appear time poor, but it is time convenient for the shopper.

Each channel has strengths to pull shoppers in, and weaknesses that encourage shoppers to look elsewhere.  Supermarkets have tried to find a solution that best meets the needs of all, while discounters, convenience stores and online have grown by better meeting one or two distinct needs.

So what does that mean for us? Well, firstly, until George Osborne, Ed Balls or Russell Brand find a solution, the majority of the British public are still some way off seeing a rise in their disposable income.  Therefore we can expect shopper focus to remain on price, meaning we need to ensure the value of our products is communicated above the line and in-store.

Secondly, some of the tactics learnt during the recession will remain as good practice.  Multichannel is here to stay, so we need to ensure we have dedicated strategies in place to meet the distinct needs of shoppers in each channel.

Finally, savvy tactics cost shoppers’ time and energy.  As prosperity improves we can expect shoppers to place more emphasis on higher quality products and the experiences they have within the stores they visit.  Therefore, to achieve growth, we need to understand in-store behaviour and the drivers behind it.  We must then adapt our offer to ensure the drivers are met in-line with the behaviours we have seen.

Overcoming the barriers to implementing shopper

There are very few companies who don’t now recognise the importance of the shopper as a business stakeholder; yet despite their importance, a truly shopper focused business culture is still something of a rarity. So why is this? What are the barriers to shopper centricity and what needs to change to create this culture?

Barrier #1

Lack of shopper insight

In recent years, the shopper has become a more important stakeholder than ever. The shopper has the power to choose, and the fight for retailer loyalty is failing. Meeting shopper needs is therefore more important than ever, and we can’t do this if we don’t know what those needs are in the first place! Yet most organisations are still lacking in shopper data. Without the right insight, we can’t engage with customers and develop shopper orientated category, customer and brand plans. We should have 360 degree insight; covering everything from shopper confidence & macro retailing trends right through to the detail of how our packaging operates in a shopper context. If you truly understand how your shoppers think and behave along the journey, you will uncover new opportunities, and can use this for your own commercial gain.

Barrier #2

Shopper strategies have to be implemented into another business

The other difficulty with “shopper” in contrast to “consumer” is the challenge of the chain! We have to gain buy in from our retail partners, as well as our colleagues. We often have some great ideas, but struggle to get traction with retailers. The secret to this is early retailer engagement in the project process. Work in partnership with them, suggest shopper marketing initiatives that fall in line with their corporate calendar rather than your corporate agenda.  Design research programmes together, with agreement for testing from the outset. To truly drive top to tops, we should be working with retailers on initiatives that fall outside of our own category and brands (e.g. helping them with their on-line store design or creating a vision for a certain part of the store). The long term benefits of this will be a stronger voice at the table, which in turn will help you to drive your internal agenda.

Barrier # 3

Business Silos

Most businesses will work in silos to a greater or lesser degree. Marketing and Sales often work separately, and shopper will typically sit within the Sales function of an organisation. This means that shopper focused thinking rarely gets included in the marketing and brand planning process. Yet it’s essential that Brand Managers and Marketeers DO adopt shopper thinking. How can we develop NPD and packaging when we don’t know how it will stand out on-line or on shelf to shoppers? How can we advertise to shoppers through Shopper Marketing without understanding their mission and mindset when exposed to this material? Unfortunately, this way of working won’t change unless organisations drive shopper thinking from the top down. Shopper checkpoints should be built into all business processes; with clear KPI’s set for each function. This will require having more shopper experts within the organisation who understand this and help to drive

it within the business.  HR functions must implement shopper performance metrics into appraisal systems if business cultures are truly going to change towards this way of thinking.

Barrier #4

Benefits of shopper implementation are not widely understood

In many cases, the reasons why Marketing functions don’t implement shopper thinking into their planning is due to a lack of understanding as to HOW and WHY shoppers are an important stakeholder for them. Even if we DO have the insight at our finger tips, we need to educate and prove the value of ‘shopper’ to our colleagues through running training programmes and showcasing best practise case studies. This is a large undertaking, and will again require experts who have the back up from senior leadership to drive it.

In summary, having a shopper focused culture within our organisations will be crucial if we want to win with shoppers in the future. This will require investment into shopper insight, changes to how our businesses are structured and top down support to ensure it is embedded into the business culture.

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