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News

….A matter of convenience?

19/06/2019

The changing face of retail in the UK, prompted by factors such as online shopping and faster-paced consumer lifestyles, requires adaptability on the part of retail business to meet the needs of the 21st century shopper.  It is, quite literally, an ‘adapt or die’ scenario. The closure of an almost unprecedented number of High Street retail outlets in 2018, with Debenhams and Topshop expected to follow suit in 2019 with the closure of several of their stores, to be possibly followed by the closure of some Marks and Spencer’s stores by 2022, led The Guardian, on 2nd May 2019, to describe the situation as a “high street crisis”. 

But with crisis there is potential for opportunity.

Is this the opportunity for multi-channel privately owned and chain-store retail outlets to embrace the challenge and seize the opportunity?  What about the Convenience stores? Is this an opportunity for the renewal, and the restoration to former significance of the Convenience Store to occur?  Can the well-loved and well-patronized corner grocery store of old morph into a thriving 21st century business which incorporates the technology and requirements of the day without losing the charm and personal customer service of yester-year?

This certainly seems to be the opinion of EFM partner, Field Sales Solutions, a UK based field marketing company, who are experts in the Convenience retail sector. Their expertise was demonstrated by their award winning targeted distribution drive across Foodservice and Convenience channels to promote Innocent Bubbles, a healthy, fruit-based drink in a can. They gained 2,204 new stockists by running a van sales distribution drive, using 8 teams of 3 in a team, out in the field for 6 weeks using geodemographic software to target Convenience Store outlets. A campaign that won Field Sales Solutions ‘The Most Effective Tactical Campaign’ at The Field Marketing and Brand Experience Awards.  

They share some of their insights on ‘Influencing in the Convenience Market’  in a booklet offering guidelines on how to prepare a channel plan in order to activate sales and deliver a return on investment (ROI) in that sector. With over 300,000 visits to Convenience outlets in 2018 to drive Distribution, Availability and Display, while gathering Insights and Educating retailers; they are well placed to do so. It is their view that the Convenience sector represents a huge opportunity for most brands. However, they recommend factors that need to be taken into consideration, which they outline as the ‘Stepping Stones to Success’:

  1. The Proposition: They make the point that while wholesalers and other sources can provide guidelines on which products to stock and about new trends in the sector, the key concerns for the Convenience Store retailers will be whether they can sell the stock and how quickly; what Profit on Return (POR) will be made; and whether there is a regular source available from which they are able to re-purchase stock? They propose that satisfactory answers to these questions, coupled with a trusting relationship and consideration of the requirements of each retailer’s clientele, will determine whether or not they accept your proposition to be an influencer in their business.
  2. Target Outlets: Field Sales Solutions propose that you decide which stores you want to target while bearing in mind the need to optimise in-store time and maximise profits. They suggest using electronic data to determine geo-demographics and transportation networks, as well as software to determine sales data and propensity to buy. And ultimately to do store visits to confirm data, to test and evaluate the situation.
  3. Route to Market: They outline that the RTM can be via transfer order, cash and carry, or direct to market stock. There are other variables, such as telesales, which can also be taken into consideration
  4. KPI’s and ROI. Field Sales Solutions point out that the purpose of any influence that is brought to bear in the Convenience Sector is to drive sales, meet targets and deliver a return on investment. However, other factors such as Distribution, Availability, Display, Insight and Education about the product also affect ROI outcome.
  5. They aim to be the outsourced Field Sales partner of choice in the UK.

So clearly, from the perspective of Field Sales Solutions, it is worth pursuing the Convenience Store Channel in this regard.

Mike Watkins, head of retailer insight at Nielsen, seems to agree about the relevance of the Convenience sector in retail. He is reported talking to Convenience store editor, David Rees, in an article aptly named “Convenience Nation 2019: Opportunities and Threats”.  In this article, Watkins examines some key issues and opportunities which he feels need to be addressed in the UK convenience retail sector in order to secure continuing future growth. Among the challenges he singles out, is the need to convert trips to stores into spending, and to create opportunities for shoppers to return.  He identifies the key differentiators of convenience stores as being that they are local, provide wider community support and offer a high level of customer service, but, he says, they need to do more to be truly successful.

The statistics appear to support this assessment. Nielsen is said to value annual sales in the convenience channel at GBP 38bn and growth during 2018 was 2, 7%. And research analyst HIM, predicts growth in this sector to GBP 41,7bn in 2019.  These figures look optimistic, however, according to Mike Watkins of Nielsen, Discounters are emerging as the significant competition to Convenience stores, with sales in the discount channel up by 11% in 2018. Online sales are also growing, at 8%. So while there is growth in the convenience sector and more growth is predicted, these figures show that it is lagging behind other sectors in the retail market.

Those are the stats, but what to do? 

According to both Nielsen’s Mike Watkins, and to some of the insights that emerged from the HIM Convenience Conference 2019, sponsored by Field Sales Solutions UK, there are, indeed, solutions; and there is a fair amount of consensus as to what these solutions entail.

 Namely; that Convenience stores should lead on food trends and not just follow other retailers. They should go for the fresh, good quality, sustainably sourced products which demonstrate economic, environmental and social responsibility while promoting health and well-being. They should also capitalise on the ‘Food-to-go’ market, and cater to the younger demographic of 28% of shoppers between the ages of 16 and 34 to whom a healthy option in this regard would appeal. It was felt that Convenience stores should move away from the ‘Newsagent’ image, as newspapers and magazines are no longer the drawcards that they once were. What also emerged was that Convenience stores should follow the example of larger stores with regard to innovation in the technological sphere. They should use digital technology to provide something new and informative to engage customers, and to create loyalty within their environment.  The use of payment technology that moves away from cash and towards card and mobile phone methods of payment should be implemented, and the use of self-checkouts to promote efficiency and as a time-saving exercise for busy shoppers was also advocated.

Convenience stores, as their name implies, are a matter of convenience for so many categories of shopper; the little but often shopper; the top up shopper; the regular customer; the multi-channel shopper; to name a few.  Solutions to update and grow the relevance and profitability of this important retail sector while retaining the excellent customer service of the corner grocery shop do exist; they require implementation. Who better to appoint as your influencer in this sector than Field Sales Solutions UK? 

They have proven credentials in the matter of Convenience.

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