Windows on convenience shopping (Issue 07)

on convenience shopping

For shoppers, convenience is not a channel but a mindset More than 60% of shoppers feel the range in convenience stores doesn’t reflect their needs In tough times, 46% of convenience shoppers say smaller ranges help them stick to a budget

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For our latest Windows report we challenge the industry to look at the convenience channel with fresh eyes. We investigate what differentiates the many faces of convenience. Are stores successfully tuning in to what shoppers really need and want? And we explore how, in a recession, shoppers are adapting their usage of this channel. Is the higher cost of convenience the barrier we might expect?

The man

Conveni

So what

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ased on 1,045 interviews with those actively involved in household shopping, together with observations from previous research projects, we aim to put convenience shopping under the microscope, exploring the shoppers’ own views and usage of this so-called ‘channel’. In doing so we hope to provide a clear indication of the considerable opportunities that exist for businesses operating in this arena.

This ezine is designed to give you some of the overall themes and insights from our study. If you would like further information, please email: convenience@shoppercentric.com

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CONTENTS

e the fresh faces g in to xplore age of barrier

The many faces of convenience

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Convenience or compromise?

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So what’s next for convenience?

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hopping, t n views ear ating in

nsights

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The many

faces of convenience T

The convenience versions of major supermarket brands are seen as the thoroughbreds, offering trusted quality, reassuringly clean and bright surroundings and (relatively) reasonable prices.

he ‘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.

Of course the reality isn’t that simple. City centre, residential high street, petrol forecourt, roadside services, major multiples, c-chains, independents, local specialists: these are a wide diversity of stores, meeting a variety of shopper needs, grouped under the single label of convenience. What do they really have in common – and what sets them apart from the rest of the retail landscape?

However with reliability comes a somewhat clinical image. The humbler convenience multiples, Budgens, Spar and the like, whilst arguably a little rougher round the edges, 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). Likewise just 11% consider the Tesco / Sainsbury’s model to project a community feel, compared with more than double (28%) for their multiple rivals.

Shoppers care little for industry labels. Our research shows that they are as likely to dash into a supermarket for their short term shopping needs as into a designated ‘convenience’ store.

For nearly nine in ten shoppers, convenience shopping is about location and opening hours, not store size and format.

Stores associated w % association among total sample

M&S/M

A high street store e.g. WH Smith, Bo

The convenience version of a ma (e.g. Sainsbury’s Local/Tesco Expres

Another convenience store near hom Londis, One Stop, Alldays, S

The convenience version of a ma (e.g. Sainsbury’s Local/Tesco Expres

Another convenience store near wo Londis, One Stop, Alldays, S

A petro

The lo

A local specialist store (e.g. bake

Q Thinking about each of these different types o if any, could be used to describe them? “Friendy

Predictably, local sp bakers and the like, all-comers for their community (74% ag 45% consider them and 46% recognise producers). Howev is the sense of value traditional formats. strongest endorsem trust” (58%) couple as good as, if not be convenience chain c winning combinatio enjoyable of all the d shop in – perhaps w thought among mor

At present sho have to choose professionalism personal touch convenience s

That said, within the convenience stable, shoppers do differentiate between different breeds of store.

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Stores associated with being friendly

of ce

sions of rands are breds, ty, d bright atively)

mes a somewhat r convenience nd the like, her round the e of the feel that the % consider the ence store near , a significantly dliness with Londis, One et al). Likewise co / Sainsbury’s nity feel, double (28%) for

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% association among total sample (1.045)

A supermarket

41%

M&S/M&S Simply food A high street store e.g. WH Smith, Boots, Superdrug The convenience version of a major supermarket (e.g. Sainsbury’s Local/Tesco Express) near to home

43% 30% 32%

Another convenience store near home e.g. Budgens Londis, One Stop, Alldays, Spar, Co-op etc The convenience version of a major supermarket (e.g. Sainsbury’s Local/Tesco Express) near to work

46% 30%

Another convenience store near work e.g. Budgens Londis, One Stop, Alldays, Spar, Co-op etc A petrol forecourt store The local comer shop

43% 26% 62%

A local specialist store (e.g. baker, green grocer)

74%

Q Thinking about each of these different types of store that you use nowadays, which of these words and phrases, if any, could be used to describe them? “Friendy”

Predictably, local specialists, butchers, bakers and the like, are seen to beat all-comers for their friendliness and sense of community (74% agree they are friendly, 45% consider them to have a community feel and 46% recognise their support of local producers). However, 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.

Why can’t they expect both on their local high street, breathing new life and enjoyment into their shopping habits?

Mary Portas, ‘Queen Of Shops’, writing in the Telegraph Magazine on 3rd December 2009 remarked on her local Tesco store: “On a street full of fiercely proud yet struggling independents it would have been nice if Tesco delivered something more, well, local.”

Petrol forecourts remain a last resort for many Despite notable developments in forecourt retailing over recent years, shoppers’ perceptions seem slow to change. For many, forecourt stores, like corner shops, reside at the bottom of the retail food chain, only to be used in an emergency. Four in ten shoppers say that a petrol forecourt shop is a place they would only go when desperate (even higher than a local corner shop at 28%). Reflecting this reluctance, 10% of shoppers express concern about the likely shelf-life of products in this type of store.

At present shoppers seemingly have to choose between slick professionalism and the more personal touch in the convenience stores they visit.

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Convenience or

compromise?

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Stores that have “the right choice of products for the shopping trip I use it for”

verall, more than 60% of shoppers feel that the range of products in convenience stores does not meet their needs. This rises to 8 in 10 for petrol forecourt stores. These are striking figures.

% association among total sample (1,045)

65%

A supermarket

Clearly what shoppers consider to be the right choice of products for their trips to these stores does not mirror the retailers’ view.

M&S/M&S Simply food

46%

A high street store e.g. WH Smith, Boots, Superdrug

45%

The convenience version of a major supermarket (e.g. Sainsbury’s Local/Tesco Express) near to home

38%

Another convenience store near home e.g. Budgens Londis, One Stop, Alldays, Spar, Co-op etc

38%

The convenience version of a major supermarket (e.g. Sainsbury’s Local/Tesco Express) near to work Another convenience store near work e.g. Budgens Londis, One Stop, Alldays, Spar, Co-op etc A petrol forecourt store

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. Retailers and brand owners take note. A more informed and tailored approach is needed if the true potential of this medium is to be realised

The local comer shop A local specialist store (e.g. baker, green grocer)

33% 24% 18% 23% 53%

Q Thinking about each of these different types of store that you use nowadays, which of these words and phrases, if any, could be used to describe them? “Has the right choice of products for the shopping trip I use it for”

Admittedly most shoppers (84%) claim that they want convenience stores to be just a smaller facsimile of their favourite supermarket. Yet there are clear signs in our research that shoppers are underwhelmed by many of the convenience stores they encounter. Most seem to project a pale imitation of larger stores. No easier to shop in. No more enjoyable. Just with less choice and poorer stock availability.

One shopper’s practical observation sums it up: “The trouble with buying big bottles of Coke from a place like this is you have to carry them home and they’re too heavy.”

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Nine in ten claim buy the basics q convenience sto does not seem a for a localised w much potential o mainstream groc

Shoppers’ re specialists s appetite for different, mo provides hig and connect local area.

In fact 77% of sh convenience sto products. At pre local store has a Mainstream supe likely to support useful services fo post office servic something a bit d bakery, cakes & most convenienc a differentiated o beyond... well...‘

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e? of products 65% 46% 45% 38%

And what’s more, over half of shoppers feel they are currently compromising on the quality of food they buy in convenience stores compared with major supermarkets.

Nine in ten claim they just want to be able to buy the basics quickly and easily from convenience stores. Fair enough. Yet this does not seem an ambitious enough agenda for a localised way of shopping that offers so much potential over and above the mainstream grocery experience.

38% 33% 24% 18% 23% 53%

of these words and phrases, pping trip I use it for”

claim that be just a e signs in our whelmed es they a pale er to shop ess choice

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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.

Stores that support local producers % association among total sample (1,045) A supermarket M&S/M&S Simply food A high street store e.g. WH Smith, Boots, Superdrug The convenience version of a major supermarket (e.g. Sainsbury’s Local/Tesco Express) near to home Another convenience store near home e.g. Budgens Londis, One Stop, Alldays, Spar, Co-op etc

In fact 77% of shoppers feel that convenience stores should offer more local products. At present few agree that their local store has any community feel to it.

Mainstream supermarkets are seen as more likely to support local producers, provide useful services for local people (cash point, post office services etc) and to offer something a bit different, such as an in-store bakery, cakes & pastries etc. It appears that most convenience stores are failing to deliver a differentiated offer for their local customers beyond... well...‘convenience’.

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The convenience version of a major supermarket (e.g. Sainsbury’s Local/Tesco Express) near to work Another convenience store near work e.g. Budgens Londis, One Stop, Alldays, Spar, Co-op etc A petrol forecourt store The local comer shop A local specialist store (e.g. baker, green grocer)

18% 5% 4% 7% 12% 6% 14% 6% 15% 46%

Q Thinking about each of these different types of store that you use nowadays, which of these words and phrases, if any, could be used to describe them? “Supports local producers”

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Inspiration also seems to be lacking in most current convenience stores. M&S sets a standard that few others get close to – and yet 79% of shoppers say they would welcome really appealing meal solutions in their own local store.

The former home of the indulgent treat, with traps laid at every till, has for many morphed into a place for clear focus and denial.

Indeed 60% of shoppers are deliberately using cash in convenience stores so that they can keep a close eye on their expenditure.

It all sounds rather disappointing.

In the words of one shopper: “Now I stick to the essentials more. I try not to pick what I fancy and aim to stick to the important stuff.”

However, our research reveals an interesting positive angle on the restrictions of convenience shopping. In these challenging economic times, convenience stores appear to have a role to play in managing household expenditure.

Christmas convenience Over the 2009 Christmas period, 15% of shoppers claim to have used convenience stores more than usual – a figure that doubles to 30% among the under 30’s. The convenience channel seemed to play a key role in helping these shoppers manage their limited time and avoid the perceived chaos of larger stores.

Nearly half of shoppers (46%) say that the smaller range of products in convenience stores helps them to stick to a budget.

For 23% of these a busy schedule in the lead up to Christmas saw them grabbing the opportunity to shop whenever and wherever they could. One in three said they had less time for major shopping trips and 25% needed to take advantage of extended shopping hours. 43% chose to shop more in convenience stores in order to avoid the crowds in major supermarkets.

It seems counter-intuitive, especially given that 83% expect to pay more in convenience stores. Yet the so-called “impulse” channel is actually being used by many to rein in their spending on those unnecessary items that present temptation in larger retail formats.

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So what’s next

for convenience?

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he homogenous predictability of the national chain remains at odds with the individual charm of the local independent.

Why are shoppers left to choose one or the other, when a little of both could offer such a winning combination?

In contrast to this brand rejuvenation, our research reveals a rather jaded image for most convenience stores – at best, only around one in four shoppers considers their local convenience store to be modern and up to date. And few enjoy shopping there.

In fact shoppers are much more likely to have an enjoyable experience in their main supermarket than the store down the road.

Why not the reliability of a trusted grocery brand, offering good quality products at reasonable prices – but with a local twist?

Stores that are “a place I enjoy shopping in” % association among total sample (1,045)

Why not locally sourced products, useful services for the community and staff that are happy to pass the time of day with their customers?

A supermarket

33%

M&S/M&S Simply food

35%

A high street store e.g. WH Smith, Boots, Superdrug

18%

The convenience version of a major supermarket (e.g. Sainsbury’s Local/Tesco Express) near to home

13%

Hardly surprising then that the Co-op is a business enjoying strong growth, despite the considerable challenges faced by the retail industry of late. In the words of Chief Executive Peter Marks*:

Another convenience store near home e.g. Budgens Londis, One Stop, Alldays, Spar, Co-op etc

13%

"At a time when the economy is struggling and many business models are coming under intense pressure we truly believe that the Co-operative Group is coming into its own."

The local comer shop

The convenience version of a major supermarket (e.g. Sainsbury’s Local/Tesco Express) near to work Another convenience store near work e.g. Budgens Londis, One Stop, Alldays, Spar, Co-op etc A petrol forecourt store

A local specialist store (e.g. baker, green grocer)

So when it se convenience news, why do limited aspira

The corporate ob retailers talk abou through the conv about touching th clearly there to of different to the st yet few are delive an example, less agree that their lo different’, such as cakes & pastries, Undoubtedly man go in these stores provides unrivalle genuine loyalty ba connection with t surrounding com shopper highlight

6%

“I tend to spend m convenience stor when I’m in a sup

11% 6% 12% 40%

Q Thinking about each of these different types of store that you use nowadays, which of these words and phrases, if any, could be used to describe them? “A place I enjoy shopping in”

Evidently for many shoppers this blend of the familiar and reliable with a friendly local face presents the best of what the convenience channel has to offer.

*The Co-operative Group Corporate Press Release, 6th May 2009.

And this isn’t just stuff. There is a re capitalising on th by convenience s localised approac it comes to in-sto According to Dav Field Marketing, c Week in with Dec

*The Independent, 22nd Octobe

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uvenation, our ded image for at best, only s considers their be modern and shopping there. more likely to ce in their main down the road.

njoy shopping in”

045)

arket

33%

food

35%

drug

18%

arket ome

13%

gens p etc

13%

arket work

gens p etc

store

shop

ocer)

So when it seems that convenience retailing is such big news, why do stores have such limited aspirations?

“Brands should reconsider the investment and energy put into convenience store promotional activity...Those who now fail to take note of the convenience store sector will find themselves missing out.”

The corporate objectives of our leading retailers talk about “reaching” customers through the convenience channel. But what about touching them too? The potential is clearly there to offer something a little different to the standard retail experience – yet few are delivering this at the moment. (As an example, less than 15% of shoppers agree that their local store offers ‘something different’, such as freshly baked products, cakes & pastries, cashpoint services etc).

Undoubtedly many will still want to grab and go in these stores, but their local setting provides unrivalled opportunities for building genuine loyalty based on a positive connection with the store, as a part of the surrounding community. The words of one shopper highlight the chance to impress:

In these austere times when grocery shopping seems to have become such a chore again, without the light relief of our previous indulgences, there seems a welcome role for a more engaging shopping experience in convenience stores.

In so much of our recent research we have detected nostalgia for simpler times and more traditional values.

In this context, there is surely the opportunity to reinvent what it means to shop locally in 2010, to provide a more distinctive and fulfilling complement to the big corporate supermarket experience.

6%

“I tend to spend more time browsing in a convenience store – it’s time for me – not like when I’m in a supermarket with my little girl.”

11% 6% 12% 40%

wadays, which of these words and phrases,

And this isn’t just about the touchy feely stuff. There is a real commercial benefit in capitalising on the opportunities presented by convenience shopping. A more tailored, localised approach can pay dividends when it comes to in-store activation programmes.

According to David Norbury, CEO of REL Field Marketing, commenting in Marketing Week in with December 2009:

Let’s leave the last word to the Queen of Shops. As Mary Portas observes*: “Consumers want to spend time somewhere that says something about them and the way they live their lives.”

For the most part, the current convenience channel seems disappointingly lost for words.

*The Independent, 22nd October 2009

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This ezine contains just some of the themes that have come out of our new research on convenience shopping. We have more insights and implications available via a presentation. To arrange a meeting to see this presentation, please email us at: convenience@shoppercentric.com

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Our series of Windows reports are a small part of the research service we provide to clients.

If you would like to know more about how we can help your business better understand shoppers’ attitudes, needs and behaviours please contact us.

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Alice mana alice

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or vis www

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CONTACT

that enience cations eeting to

Alice Synge, marketing and operations manager Shoppercentric: alice.synge@shoppercentric.com mobile: + 44 7977 579 076

ients. e can pers’ tact us.

convenience@shoppercentric.com or visit our web site at: www.shoppercentric.com

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