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Convenience truths: How independent grocery stores can compete with multiples and how brands can leverage the convenience boom

By Maria Sze | managing director

The thinkpeople family


The Drum Network article

This content is produced by The Drum Network, a paid-for membership club for CEOs and their agencies who want to share their expertise and grow their business.

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July 21, 2016 | 6 min read

I love my local shop.

Grocery store display.

Three quarters of shoppers 'mostly' use convenience stores for groceries.

Apart from stocking the essentials I’ve run out of, or the ingredients I’ve forgotten, it has a whole fridge dedicated to cheese and last Easter they had amazing hot cross buns with dark chocolate chips in them. What’s more I know the people who run it – they own it, they work hard, their kids go to the same school as my kids, so I like to support them.

With 30 per cent growth predicted over the next five years and three quarters of UK shoppers ‘mostly using’ convenience for their grocery shop [Source: IGD] it appears that I’m not alone. Why? It’s easier to manage your budget, it reduces food waste, the opening hours are much better suited to our busy lives - it’s simply more convenient for us.

The multiples have caught onto the opportunity. The heady combination of the business gains coupled with the chance to rebuild some local trust and engagement has seen a ‘space race’ with multiple-owned stores delivering the largest increase in numbers (+10.6 per cent YOY). However, despite what appears to be an invasion of Sainsbury Locals and Tesco Express formats popping up in a town near you, multiples actually represent less than one in ten convenience stores.

But are they all delivering for us?

From a shopper point of view overall satisfaction is still an issue. The key driver of location can only sustain you so long. The biggest challenges remain around price, range and layout. So what do independent convenience stores need to do to survive and grow?

Three things independent convenience stores can do to grow their business:

Solve shoppers’ problems

Get under the skin of why shoppers are in store. Understand their missions and merchandise to meet the shopper need. Make sure your food to go offer is right - if it’s food for tonight, don’t slavishly merchandise to reflect category ranging. Instead merchandise multiple categories together to make it easy for customers to pick up everything in one go – putting ambient, vegetables and chilled together might not feel natural but it helps provide a swift solution. Suggest and upsell. ‘Perhaps try this starter, dessert or wine?’ Support, enable and enhance customers’ everyday lifestyle.

Push local credentials

You’ll never compete with the multiples on their terms. Instead build a reputation around community spirit and local quality. Some local independents have delivered this by working in partnership with other local businesses and producers e.g. butchers, green grocers, florists. As small business owners catering to the same local catchment you are stronger against the multiples when you work together and your opening hours provide more opportunities for them e.g. fresh flower display on Sundays when the florist is closed.

In store excellence

Clear away the crap, take down the day-glow hand-written signs and make sure that your store is well stocked, well presented, easy to navigate and swift to serve. Consider ways to elevate your produce to suggest freshness and quality. Are there cues from farmers’ markets that might work e.g. blackboard signs and wicker baskets?

So, how can brands get more involved to benefit from the convenience boom?

Because of their fragmented infrastructure and sketchy retail compliance, many brands struggle to engage in these store formats. However, convenience provides a unique brand experience opportunity, as the shopper is often looking to make a purchase to consume now. Are most brands missing an opportunity to engage with the end consumer at that moment of truth? For those brands that are repared to commit, the rewards are worth it.

A confectionery brand I worked with recently saw their product return to growth for the first time in 10 years. A successful focus on supporting convenience improved their prominence within the category, drove growth with younger consumers and helped them step away from a damaging cycle of multiple pack discounting within the grocers.

Three things brands can do to win in the convenience channel:

View it as a longer journey

Unlike shopper activation in grocery, the rewards may take longer to deliver in convenience. Instead of thinking campaign planning by brand, start thinking long-term (years not months) portfolio investments.

Help them deliver local resonance for their community

Most c space owners/managers have no time for local marketing but have an appetite to engage. Providing meaningful tools and inspiration to help them build their local market share and engage with local consumers can transform your trading relationship.

Help them deliver in store excellence

Schemes like Heineken Star Retailer have really helped retailers with useful product information and merchandising guidance. It’s a perfect win win. The retailer grows their category and profits whist the brand secures prominence of display and gains the retailer’s trust.

My local shop brings out something almost patriotic and protective in me. It’s more than some faceless façade run by fat cats – these are real people and by supporting them I’m putting money back into my community. Shopping there makes me feel better about me.

If they gave me a free sample of something it would feel personal, not some mass commercial push. In a world of cynicism and disillusionment, this is marketing gold dust.

Wouldn’t it be amazing if more brand spend started landing there? Smarter signage, more of the products you expect and need, when you need them. Perhaps some seasonal food and wine tastings for regular customers - and if it meant more of those hot cross buns with the chocolate chips in them, I’d be first in the queue.

Maria Sze is managing director at whynot! thinkpeople

Marketing Retail Creative

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