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Marketers missing out on convenience retail opportunities

Marketers missing out on convenience retail opportunities

Retailers are not taking full advantage of the untapped market potential when it comes to convenience stores, according to new research from Shoppercentric.

The study, titled ‘Windows of Convenience Shopping’, has found that a more informed and tailored approach is needed if the true potential of the convenience retailing channel, in its many guises, is to be realised.

The purpose of the study was to challenge the marketing industry to look at the convenience channel with fresh eyes and to investigate what differentiates the many faces of convenience.

It reveals that 56% feel they are currently compromising on the quality of products they buy in convenience stores compared with major supermarkets.
“The ‘convenience channel’ is a widely adopted concept in the retail industry, with business strategies and management structures projecting the vision of a unified business model based on common principles,” says Danielle Pinnington, managing director of Shoppercentric. 

“Of course the reality isn’t that simple. Shoppers care little for industry labels. Our research shows that they are more likely to dash into a supermarket for their short term shopping needs than into a designated ‘convenience’ store: for nearly nine out of ten shoppers, convenience shopping is all about location and opening hours, not store size and format. 

"That said, within the convenience stable, our research shows that shoppers do differentiate between different breeds of store and there’s work to be done across all types of these stores in order to meet shopper needs.”
More than three quarters (77%) of shoppers feel that convenience stores should offer more local products, according to the report, and more than 60% say they feel the range in store doesn’t reflect their needs.

“Nine out of ten shoppers claim they just want to be able to buy the basics quickly and easily from convenience stores but this is just a basic request that must be met,” says Pinnington.

He adds that a local setting provides unrivalled opportunities for building genuine loyalty based on a positive connection with the store, as a part of the surrounding community.

Shoppers perceive the major supermarket brands as the thoroughbreds, offering trusted quality, reassuringly clean and bright surroundings and (relatively) reasonable prices.

However, with reliability comes a somewhat clinical image. The humbler convenience multiples, Budgens, Spar and the like, appear to offer some of the personality and community feel that the retail giants lack.  While 32 % consider the Tesco/Sainsbury convenience store near to their home to be friendly, a significantly higher 46% associate friendliness with other multiples (Budgens, Londis, One Stop, Alldays, Spar, Co-op et al). 

Furthermore, just 11% consider the Tesco/Sainsbury’s model to project a community feel, compared with more than double (28%) for their purely convenience multiple rivals.
Predictably, local specialists, butchers, bakers and the like, are seen to beat all-comers for their friendliness and sense of community with 74% of shoppers agreeing they are friendly and 45% considering them to have a community feel. A further 46% recognise their support of local producers.

Pinnington says, “Perhaps more striking is the sense of value projected by these traditional formats.  They achieve the strongest endorsement for “quality I can trust” (58%) coupled with price perceptions as good as, if not better than, their convenience chain counterparts.  This winning combination makes them the most enjoyable of all the different types of store to shop in – perhaps warranting some pause for thought among more contemporary formats.
“At present shoppers seem to have to choose between slick professionalism and the more personal touch in the convenience stores they visit.  Why can’t they expect both on their local high street, breathing new life and enjoyment into their shopping habits? Such a mismatch points to a lack of clear understanding of the ways in which shoppers are using the various faces of the convenience channel, their needs and their expectations. 

“Shoppers’ relish of local specialists surely shows their appetite for shopping in a different, more engaging way that provides high quality products and connects them with their local area,” he concludes.

Other findings from the report include:

    •    Less than 15% of shoppers agree that their local store offers ‘something different’, such as freshly baked products, cakes & pastries, cashpoint services, etc.
    •    86% agree that convenience shopping isn’t about the type of store as much as it is about where the store is located.
    •    87% agree that convenience isn’t about the type of store as much as it is about them being open at times when they need to use them.
    •    74 percent of shoppers were most likely to rate their local specialist as friendly. At the other end of the scale were petrol forecourts - only thought to be friendly by 26 percent.
    •    Despite 83% of shoppers expecting to pay more for goods in convenience stores, 46% use them because smaller ranges help them stick to their budgets and avoid temptation.
    •    60% of shoppers said they were deliberately using cash in convenience stores so that they can keep a close eye on their expenditure.
    •    Four in ten shoppers say that a petrol forecourt shop is a place they would only go when desperate.

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