Safe, local, convenient.
The past 18 months in Australian retail have been filled with unprecedented disruption and adaption and has seen the role of petrol and convenience (P&C) retailers grow in importance. As Australians’ shopping habits have been forced to shift, it’s become even more vital that we step up to maintain our own newfound momentum and thus ensure we secure our share of retail spend.
The impacts of COVID restrictions have seen more customers visiting our stores more often. Our position as ‘the local store’ and the convenience of our offer, has perfectly suited the retail climate. New shopping missions have brought new customers to our stores, and we have become trusted, reliable, and valuable members of our local communities. But how long can we expect this window of opportunity last?
Despite fears that 2020 was an anomaly, the latest figures from the AACS State of the Industry Report suggest that the convenience channel is still in a healthy position. The second half of 2020 was strong, and the first half of 2021 saw us grow by +7.9 per cent and +7.8 per cent in quarters one and two respectively. But these figures were on the cusp of the 2021 NSW and Victorian lockdowns commencing. While some variables such as lockdown duration and category nuances will have an impact on the remainder of the year, this is a positive start for us all. However, we must continue to provide the safe, convenient shopping locations that our customers have become accustomed to.
Doing what we do and doing it well is the key to our success. We are seeing fresh growth, but our staples such as comfort foods are still strong and must remain in focus. The latest NACS Convenience Voices (2020) report suggests that the ‘at home’ economy continues to maintain strong momentum as restrictions remain in place. As long as limited individual travel remains the norm, most consumers (46.7 per cent) are keeping their trips to short, local occasion shops, for essentials and staples. This gives me confidence that we will continue to benefit from delivering vital services to our communities during these difficult times.
In fact, I see this as an opportunity for us to consider how we can evolve our channel. Recently on a State of the Industry webinar, we looked at the ‘Future of Convenience’ and saw some great ideas that can guide us towards a vibrant, valuable, and viable future convenience channel. The consistent theme was that although we are a commodity-driven channel, at a time when choices for customers are many, our channel’s greatest opportunities lie in improving our service levels.
For our retailers and stores, we must consider and explore how we can become genuinely service-driven businesses. Whether it’s best in class customer experience instead of simply ‘transactions’, tailored and personalised experiences for shoppers, instant or ‘frictionless’ shopping, or even exploring hyper-localised and differentiated product ranges, there are many ways we can make our channel experience special for customers. We must seize every opportunity, which is every customer who comes through the doors. They must feel welcome and special – it must feel like they are at their ‘local’.
Our trade and distribution partners can also help us improve, with a service focus of their own. From trade partners leveraging the unique, brand-building qualities of our channel with targeted and exclusive products, promotions, and competitive pricing, to wholesalers helping our stores with benchmark efficient and effective service, we can all work together to create a stronger, service-driven future for the channel.
I’ll close by saying that maintaining (let alone growing) our relevance and value to Aussie consumers post-COVID is not a quick fix, these are difficult and dynamic times. As an industry and as individuals, we must be in this for the long haul and continue to innovate how convenience stores operate to deliver optimum service across the board.
Remember, according to Australia Post research in March 2021, online retail sales currently represent only 16.3 per cent of total retail sales, meaning 83.4 per cent of sales are through bricks and mortar stores. Let’s makes sure bricks and mortar continue to be that great place to shop, where service stands out. This is an exciting time for all of us and I look forward to being a part of it with you.
This article was written by Darren Park, CEO, UCB, for the October/November issue of Convenience & Impulse Retailing magazine.