Notions of convenience have significantly sharpened in the last few years, with competition for convenience stores intensifying through increased online grocery shopping and big-box retailer exploration into smaller format stores.
We believe there are four ways in which convenience stores can utilize their strengths and take advantage of changing consumer trends to survive and thrive:
Convenience stores typically have a highly localized catchment area. In an increasingly digital and disintermediated world, there are still many people looking to engage and connect. We have seen a trend of stores distributing local produce and supporting community events, such as with chain Rutter's who began stocking local fruits and vegetables sourced from the state of Pennsylvania.
There's also a growing provision of 'dwell-space' for convenience providers to offer fresh coffee, events and services to drive footfall and encourage time in store. By moving away from the one-size-fits-all approach, convenience retailers can reinvent themselves as a community hub and a platform for emotional engagement, as well as offering a less formulaic offer than the small format stores of the larger chains.
Operators in the market who utilize their knowledge of the local catchment area can gain a significant advantage. Local convenience stores can complement groceries with tailored services to provide a one-stop destination for their community. Historically, this has included postal services and cash machines in remote areas. We are also now seeing organic and fresh produce in health-conscious suburbs, click and collect services and ready-made meals in areas with a population of time constrained workers.
Furthermore, software as a service and third party logistics now mean that convenience store chains can also offer digital home-delivery services that mirror that of their supermarket competitors, as evidenced by 7-Eleven's branded, always-on delivery service 7Now.
In addition to closing the data and technology gap, convenience stores have the benefit of more personalized relationships with their customers, and the potential for a faster transition from idea to implementation. Using the right analytics, range and performance management tools and approaches to understand and respond to the latest events and trends for the local catchment can be a key differentiator for convenience.
Getting the basics right
Today's consumers expect a lot from convenience stores: long hours, a curated product range, fast services and modern environments – as well as reasonable pricing. Mastering elements such as easily-navigable store formats, a compelling and relevant range (including, increasingly, better quality private-label products) and well-developed visual merchandising, provides a strong foundation on which to build, inspire and engage.
Growth and competition in the convenience sector is set to remain strong, but this format is in a prime position to take advantage of changing consumer demands for extreme convenience, instant gratification and personalization.