Are convenienceĀ retailers the next shopper revolution?

With shopper habits evolving rapidly, the convenience format can take advantage by offering solutions that fit with changing lives.Ā 

Filling up at the service station and about to use my 4Ā¢-a-litre discount voucher, I spied an offer to spend $20 in-store and get a further 10Ā¢-a-litre discount.

Normally I would skip these obvious attemptsĀ at upsellingĀ and chuckle to myself about who would spend that much in aĀ convenienceĀ storeĀ unless they were buyingĀ bags of ice, gas canisters, or car products.

However,Ā whenĀ walking to the counter, I saw two products that changed my mind: a 24-bottle case of water for $7 and a 20-roll pack of toilet paper for $10 ā€“ not your usual buy from aĀ convenienceĀ store, granted, but it was a different day.

Iā€™m the father of two little kidsĀ and, withĀ a full-time working wife,Ā myĀ familyā€™s weekendsĀ areĀ filled with sports and birthday parties. As a result, my grocery shops have begun to happen later and later in the day with, typically, two to three shops a week.

Long gone are the big weekly shopsĀ where a heavily edited shopping list and a weekly overview are a necessity.

On weeknights, itā€™s a quick dash after work betweenĀ 8 and 10pm, or during a rare free spot on a weekendĀ (usuallyĀ Sunday,Ā aroundĀ 5pm,Ā before the rush of dinner and getting the kids ready for the week).Ā 

For anyone else shopping the grocery store at these times, there are theĀ obviousĀ benefits of fewer crowds and trolleys to battle (along with more chance of finding a car spot somewhat close to the elevators), but the biggest problem is the lack of products on the shelves. Most of the popular buys have been ransacked by the time I get there.

So, back at the service station ā€“ a sub-brand of one of our major grocers ā€“ I noted that the bottled water and toilet paper were the same price as at the grocery store. In addition, there were plenty of products on display and, even better, it was only a short walk to my car, so no heavy, out-of-control trolleys to deal with.

All I had to doĀ to make a savingĀ was buy my water and toilet paper, then spend another $3 to receive $10 off my petrol. As a shopper, the numbers and the situation added up. In my head, I scored a chocolate bar and my case of bottled water for free.Ā Everyoneā€™s a winner.

RunningĀ integrated marketing agency Now Comms, and with a specialist interest in all things shopper-related,Ā I always observe whatā€™s happeningĀ when I, and those around me, shop.Ā 

So what happened inĀ the case of the petrol upsell?Ā Yes, IĀ spent more money than Iā€™d intended, butĀ I saw an opportunity to receiveĀ great value for my money. I was able to buy products more easily than from my usual grocery store, and make that purchase outside of my normal shopping trip at a time that suited me. Ding! I just hadĀ a properĀ ā€˜convenientā€™ shopping experience.
In doing so, I had also become part of the growing statistic of shoppers moving away from traditional large-format grocery stores.

Weā€™re now finding alternative and more relevant ways to match our shopping needs to our lifestyle. ConvenienceĀ store sales have increased 10.3 per cent so far this year, with sales continuing to go from strength to strength during the past quarter, thanks to a focus on improving the products on offer to us, the mere customers (Ausfoodnews.com, April 2015).Ā 

Being able to get what we want, when itā€™s mostĀ convenientĀ for us and not the retailer, is changing the way we shop.Ā 

Think about what Costco and online grocery shopping are doing to the purchase of large household or heavy shopping items. Buy in bulk and save money, or order online and have the goods delivered to your door, meaning no carrying troublesĀ and a shopping solution that isĀ convenientĀ to you. Or consider a different version of this ā€“ click and collect ā€“ which allows you to bypassĀ the mayhem of a busyĀ store and just pick up your bags and head off.

Think about the rapid growth of ALDI in Australia ā€“ a shopping format with a smaller retail footprint per store than Coles or Woolworths, with fewer product offerings, but with a sharp price point across all product categories.Ā 

As modern living leads to more apartment and higher-density homes being built, large-format grocery is going to change. Battling the hordes at peak-hour shoppingĀ canĀ be worse than Boxing Day sales in some metro stores. The two leading grocers understand this and weā€™ve seen the move towards new, smaller-formatĀ Coles and WoolworthsĀ convenience-style stores ā€“ with or without fuel, but both with smaller product ranges and extended opening hours ā€“ opening up across Australia in higher-density areas.

The lesson for theĀ convenienceĀ channel is not just to offer a small range of essential items to attract spend, but to recognise that shopper habits are evolving rapidly. Shoppers are now looking for solutions that fit with changing lives.

What marketers need think about now is howĀ convenienceĀ stores can be more useful and relevant to a major international brand. How canĀ convenienceĀ stores and brand owners make use of the connected shopper? How canĀ convenienceĀ stores adapt their model to meet the omnichannel needs of shoppers? With eBay now offering its own click-and-collect service, will we see the likes of Amazon buying aĀ convenienceĀ store chain soon?

The game has definitely changed.Ā For now, you can find me shopping at whicheverĀ convenienceĀ store I happen to pass on my way home.

Kingston Lee-Young
Managing Director

Kingston has more than 17 years’ experience in marketing and communications across FMCG, pharmaceuticals, alcohol, retail, professional services and IT, in Australia/New Zealand and Asia Pacific. He is also the founder of the ā€˜thought to boughtā€™ model for shopper marketing.

About Now Comms

Now Comms is anĀ integrated marketing agencyĀ delivering smart solutions in the new content-led, data-driven and digitally engaged world. Based in Sydney,Ā its passion is to help clients better engage theirĀ customers, shoppers and consumers through the right mix ofĀ creative, digital, social, PR, communications andĀ activations.

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