As I have discussed in past articles, the convenience channel is evolving by broadening offers and creating destination occasions outside of the traditional fuel category. I have been fortunate to present at several conferences this year and feel that the message of ‘investing in your future’ is getting through. This goes for both retailers and suppliers because as retailers, you need to own your future and suppliers need to adapt your offerings/products to meet that future.
There are several factors forcing the hand of retailers and suppliers to change and to look at how you can develop offers that drive foot traffic. The reality is that if you don’t or haven’t acted on current trends by now, you are playing catch up. I see three things that are driving the current investment by retailers into new store formats:
- Changing shopper habits
- The future of current fuel offers
- Technology and the millennial
Changing Shopper Habits
The investment by retailers in Hot Coffee and Food as well as equipment to support the growth of these categories has been happening for many years now; however it particularly has a real momentum at the moment. We are seeing a category like Hot Coffee continue to grow in acceptance and sales from the shopper and it remains the fastest growing category for retailers with varying offers in the market. The retailers that have invested in this are reaping the rewards and so too is the broader channel. The fact that Hot Coffee shoppers visit on average 3.5 times per week or more than 25% more than any other category shows that implementing a great Hot Coffee offer will drive foot traffic. Doing this on its own will be limiting so you need to continue to look at how to broaden the Food category with both on the go and ready to eat meals. This will take time and some of the offers will fail however, from what we have seen globally it is worth the effort and compliments the Hot Coffee strategy.
The future of the current fuel offers
Whether you are a believer in all the publicity around electric cars or not, what we do know is no matter what, cars will become even more fuel efficient in the future. A number of car makers have already publicly stated that within the next two years their fleet of cars will be mainly Hybrid and Electric. What this will do is change the frequency that shoppers will need to come onto the forecourt, meaning that you must develop other reasons for shoppers to come. You can create an occasion for when electric charging stations are required as your customers will need to spend 10 -15 minutes on your forecourt.
Technology and Millennials
While the average age of the convenience shopper is a little under 40 years of age, the next 10 years will see a very different shopper coming through with a significantly different view to the previous generation. Millennials are the most diverse culture, often being first generation Australians, that are demanding more in terms of offers. To be relevant to this generation technology will play a key role in your success, whether it be communication through apps or social media it is something that must be implemented. We are also seeing the best retailers use of LED screens and interactive media to drive occasion based offers and even can “upsell”.
As we see the Convenience channel at the forefront of changing shoppers needs, it remains extremely important to remain relevant, as other retailers will be looking at ways to capture this market.
If you haven’t planned or implemented your future strategy you need to act now or in the words of the outing Nokia CEO when the business was sold to Microsoft you will be thinking “we didn’t do anything wrong, but somehow, we lost”.