The trend for shopping local with smaller baskets and more frequent visits is set to continue apace in 2015 and beyond, but to take full advantage retailers must create a sophisticated offering that matches the demands of its shopper base.
by Katie Littler,
Insights and Communications Director at him!
Over the last year convenience has become the hottest shopper trend and this will continue as we see shoppers increasingly choose to shop local, smaller baskets. This will be further accelerated by the sophisticated offer and services that local retailers continue to invest in.
The first half of this decade saw the return of price-led shopping. We’ve seen a strong growth in sales and quality of own label, an explosion of price marked packs, the growth of the discounters, price matching and loyalty rewards.
What can we look forward to in the second half of this decade? Signs point towards a new generation of shopper, who has moved beyond price. Although price is still an important factor and will continue to influence behaviour, this new shopper is primarily driven by ‘convenience’. What we mean by that is that it will be the ‘experience’ and the service which will ultimately determine where they shop. Fast disappearing are the days of shoppers driving to out of town supermarkets to spend hours in a huge store scouring stores and standing in line at check out. Shoppers are used to having access to faster, more personal experience at their fingertips, 24/7, via their smartphones and tablets; they will expect the bricks and mortar shopping experience to replicate this.
To meet the needs of this new generation of shopper, the convenience industry will move from evolution to revolution: similar to when the big mults entered the market 15+ years ago, we believe the UK convenience industry is on the cusp of a serious shake up! Big box stores are on their way out, small format is the future.
The ‘small & frequent’ shopping trend will accelerate, partly due to increased online grocery shopping as well as a fundamental shift in how our society is shopping, meaning shoppers demand for small, frequent, quick shops will increase. Whoever can provide the most convenient, stress-free solution at a decent price, will win.
Convenience stores will need to move beyond the battle for price. Stores need to offer ‘value+’. Service will once again become a core differentiator, shoppers will choose quality and look for a shopping experience which meets their needs rather than just the products and prices on the shelves. New technologies will drive new levels of service and engagement. The personalised customer experience is hugely important to shoppers and we expect to see many retailers stand out from the crowd by finding ways to customise and personalise their shoppers’ experience.
Discounters are here to stay and will move in on traditionally ‘convenience’ missions. They’re already winning top up shoppers as they win credibility for fresh and quality as well as value. Expect them to move into smaller format stores and focus on in-store experience too.
We expect leading retailers – who have already benefitted from basing their ranging, store layout and merchandising around shopping missions – to move one step closer to the shopper. We’ll hear a lot more about ‘occasion-led’ merchandising and ranging; this may be everyday ‘occasions’ (eg lunchbox, quick week night dinner, energy boost) through to seasonal and indulgent occasions (eg Friday night in, Halloween). Retailers will be more pro-active in creating demand, rather than reacting to it by creating occasions to spend; ‘curry night’, mid-week healthy option, family games night and so on.
We’ll also see a changing use of space in store. Chilled and fresh produce, fresh bakery, hot food and coffee, click and collect; all these services are a now a key expectation of shoppers. It’s no longer a question of ‘should I invest in these’ but ‘I have to invest to protect and grow my business in order to respond to customers’ needs’. These initiatives will require investment but will also impact on space and layout of a store. Suppliers need to think now how they can support and work with retailers with informed decisions on how their category and products can work within the new space.
And finally we expect to see some outstanding examples of collaboration in 2015 and beyond. Successful retailers and suppliers will grasp the opportunity to work productively together, to create new occasions and new solutions to ensure shoppers are inspired in-store.
2015 is going to be a year of change, make no mistake.
