Convenient Times
5 years ago I joined Tesco to lead their Fresh Format Commercial team in their Convenience stores division (Express and Metro). Tesco was arguably the Convenience success story of the previous decade… growing Express aggressively and raising standards across the industry.
Consumers loved Express because it had a core and consistent range and pricing that matched it’s larger stores. Tesco’s commitment at the time was wherever you shopped you got the great Tesco price and the great food quality you had come to expect. For many urban dwellers you didn’t need any more than an Express to meet your regular shopping requirements.
Reflecting on that time in my life and the role that Tesco Express played in the lives of its customers it got me thinking about what will the emergence of On Demand Delivery (ODD) retail will have on the Convenience industry?
From my own perspective I see Convenience Retail fulfilling consumers needs in the next 5 years as follows:
1) The elderly and the isolated will continue to shop in physical stores for personal contact. Physical stores will continue to play an important role in society in supporting these people.
2) The digital native will move away from the physical store to a variety of favoured apps. They will continue to leverage discounts and platinum service in making their choices. They may choose to shop fresh in physical stores or through recipe boxes
3) The family will maintain their large shop and use both formats to top up when it’s convenient. It will be a trade-off between range offer, consistent availability and the costs of travel or waiting in-line in-store.
4) Location will dictate many choices available for customers due to the economics of formats for the retailers. We will continue to see sparsity in offer in rural areas and an abundance in urbanised environments.
5) Safety in the pandemic has been a real engine for growth for the On Demand retailer… Will this continue to be a motivating factor as the dangers of CoVid dissipate?
I’d be keen to hear the thoughts of my network and their own personal view on how the Convenience Retail space is changing..
Perhaps Melanie Smith CBE, Neil Franklin, Jack Wilson, Tracey Clements, Dom Hill, Sinead Bell or Stuart Machin would like to lead the discussion?
#open_the_floor_for_discussion, #getir, #weezy, #express, #cooperative
Commercial executive, expert on animal health
3yGreat post Ben Penrose and yes I agree that digital natives are turning (I hope) to the online channel more and more. It totally makes sense that C-stores will retain popularity in terms of the groups identified and as noted above by those needing to top up between deliveries. I’m also intrigued as to the evolution of both home delivery and bricks & mortar shopping in terms of sustainability. It will be key to find ways of minimising for example carbon footprint and also single use plastics in both, and are there other opportunities for retailers to maximise their role in communities and society via their ESG activities?
Great perspectives Ben and not dissimilar from what has happened in the US as well. In the 20-40 yrs, retail will be seen as Pre-Covid and Post-Covid because of the changes the pandemic has accelerated.
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3yKate O'Connor
International Sales and Marketing ∙ FMCG ∙ Animal Healthcare ∙ Pet Nutrition ∙ Head of Business • EMEA headoffice • In-country operations
3yGood article, Ben. I mostly retained your first point. Loneliness, especially in old age, is an unfortunate trend and an ageing society is a fact. Interesting to see how retailers will play on that. More neighbourhood stores, yes; self-cashouts maybe not, friendly and warm shop assistants, yes; packaging catered for frailed hands and tired eyes, also, etc.
Senior Commercial Manager at Pukka
3yGreat read this, Ben. I’m doing quite a lot of work on this at the moment, particularly on how the growth that the majority of categories are seeing as a result of the rise in customer numbers (particularly through larger format stores) & spend per trip, is soon likely to slip away as lockdown restrictions end & hospitality reopens, which will see meal occasions drift back out of the home. Solutions to try & sustain this growth beyond COVID is what I’m currently developing within the MFP category. Really interesting on the role convenience will play, I think how they build ranges & merchandise for the ‘food for now/tonight’ mission will be a big part of their continued success as a ‘neighbourhood’ destination... Seen some good developments in this area over the past year!