As one of the busiest times of the year, the Christmas trading period provides many opportunities for convenience stores and retailers to benefit.
In Australia, the weather is hot and people travel to see their family members, these two factors alone offer many areas for retailers to expand their offering and cater to their customers’ needs.
Managing director at Zanak Group, Karim Sumar, said the Christmas period is the largest trading period for most of the channel.
“Some of the key categories over Christmas that are significant include gifting, ice and gas,” he said.
“It is the largest trading day for ice, whereby the majority of suppliers do pallet drops on Christmas and Boxing Day.”
A pallet drop is when an entire pallet of product is dropped directly onto the store floor for an instant display. Demand for ice is so high that the ice is usually sold well before it melts.
Mr Sumar noted that as deregulated trading hours have changed over the last couple of years, the relevance of convenience stores had fallen away.
“It’s still a significant period but it is the unusual categories that really pick up sales like health and beauty products, Berocca, condoms, headache medication, and these items will offer a peak trade at this time.
“Depending on the location, grocery can place a big role because people want last minute things and all the supermarkets are shut, so the convenience space becomes a hub.”
Mr Sumar said that gifting in convenience stores can be placed into one of three buckets.
“One bucket is the traditional confectionary boxed chocolate and the likes, the second one is emerging but not all retailers are really playing big on it yet, is gift cards,” he said.
“Petrol convenience can be a significant opportunity for gift cards. But it’s very hit and miss at the moment. The third one that is playing out now is telecommunications, headsets and music devices.”
Mr Sumar specifically mentioned the company Pacific Optics and its speciality in gifting.
“They have actually created gifting for listening with their brand ‘Fuse’ and that’s become a big thing.”
Pacific Optics general manager sales Theo Foukkare said across all of Pacific Optics general merchandise, there is a gifting option for everyone.
“We have developed pre-pack solutions to make life easy for retailers,” he said.
“Once they decide what they want to buy, they simply open the box and put out the display and it’s ready to sell! In addition to the over and above gifting items, we have introduced new designs across all of our sunglasses, caps and thongs range as well. Our buyers have been working hard to find the right balance between fashion forward and functional – so we can capture both the traditional P&C consumer as well as influence customers who would not normally buy these items from a convenience store.”
A trendy Christmas
Mr Foukkare said Bluetooth products will continue to evolve as a trend within the channel, and will continue into 2018.
“This is being driven further since Apple removed the 3.5mm auxiliary jack on the iPhone, so your only option, in this case, is to buy expensive headphones that have a special Apple certified audio connector attached to the wire to plug in or use Bluetooth,” he said.
“Bluetooth / wireless headphones are very affordable, and we have options starting at $25.”
Mr Foukkare also noted that wireless charging has been around for a few years with Samsung, but that Apple has also introduced it with their new iPhone range.
“This technology is good for very slow charging times, but it is very inconvenient when you need to power up & keep moving. We have some wireless charging products that we will be releasing in 2018, but demand is still very slow – and we feel it will be this way for many years to come,” he said.
He said another key trend is premium quality and differentiated products in the tech accessory and audio headphone ranges.
“The cheap and cheerful stuff simply disappoints consumers time and time again,” he said.
“All of the leading retailers in the country are focusing on high quality, fast charging and unique products that deliver amazing consumer experiences. This trend is a key driving factor in our development program for new products, and our plans for 2018 are shaping up to be very exciting!”
Healthy snack food and on-the-go options are also trends to be mindful of.
Mr Sumar said as families are travelling around Christmas and New Year period, retailers should be focusing on who they are their target consumers are.
“When you think about the customer who is looking for healthy options for the family, think meal deal opportunities whereby you can mix and match, and then give value for money to the customer,” he said.
“These are all opportunities that I think quite often retailers, and traditional franchise retailers don’t always take advantage of.”
“Many have this notion that they don’t need to run promotions around Christmas/New Year because customers will just buy regardless of the time of year.”
Gifted an opportunity
Mr Sumar said retailers should look at on-the-go as an opportunity.
“People are on the road more at this time of year, and it’s good to ask: do we have family friendly food offers rather than just your tradition pies and sausage rolls?” he said.
“The retail opportunity is driven by suppliers rather than the customer, so all the suppliers will want you to promote your big bag of snacks and big bottles of drinks.”
“Generally the key goods segment around the take home pack is the idea that someone is on their way somewhere so they want the multipack of chips or of beverages.”
Mr Sumar also noted the opportunity that lies with technology and telecommunications.
“There is opportunity with the telecommunications range and gift cards to play a big role,” he said.
“I don’t think anyone is doing it really well, I think it’s more because of smaller margins, a lot of people aren’t realising that desperate situations provide an opportunity.”
He suggested that gift cards are a great opportunity for customers looking for last minute gifts for family and friends.
Moving away from telecommunications and mobile phone accessories, Pacific Optics has many other gifting options that are available around Christmas to delight and interest consumers.
“ Star Wars Episode 8 is being released mid December, and we have a great range of merchandise available to support the movie release, including things like plush toys, kids activity packs, action figurines and some special edition diecast cars. Star Wars is the biggest licensed brand globally, so this presents a real opportunity to capitalise on both the brands strength and movie release during school holidays,” Mr Foukkare said.
“Continuing along the toys theme, we have partnered with Mattel & Disney to offer a tight range of impulse gifting items that would make great stocking fillers, keep the kids occupied whilst travelling – and there is even Uno Cards so the whole family can enjoy together. This stand has products that range in price from $3 through to $11.99. This offer has been extremely popular with everyone as it is also is a healthy alternative for the kids whilst travelling – no sugar, not junk food and can last for more than three minutes in terms of keeping them occupied.”
Tips for retailers
Mr Foukkare has some tips for retailers to help them prepare for the Christmas season.
“Have a go, create a display, get your staff behind it and make sure that you smile!” he said.
“Invest in the categories that you know work best in your local area. Don’t buy toys to sell as gift ideas if you don’t really attract that type of customer, when you overtrade on tech products for example.”
“So create a complete display of Tech in a high impulse bay location – you will be amazed at the difference it makes. The average retail price of tech accessories in the P&C channel is approximately $22 – think about how many chocolates or packets of gum you need to sell to make the same dollar margin.”
Mr Sumar said to think about as a channel how P&C is both prepared and not prepared for this time of year and then go from there.
C&I would like to thank Karim Sumar and Theo Foukkare for their contribution to this feature.