The new age of the convenience channel
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The new convenience landscape is defined by four major factors:
- Need for Speed: Today, speed is one of the most powerful loyalty tools to drive shopper retention and build basket. As fulfilment wars trickle down from online, the store’s catchment area, and how the store services shoppers at peak times, is changing.
- Fight for Space: Retailers are shifting their focus to missions and occasions, rather than stores, formats or channels. They test the waters with temporary spaces, and reallocate space within the stores to new services or a private label offer.
- Retail Solutions: Inspired by the likes of Amazon Prime, convenience retailers are looking to create holistic ecosystems. Leveraging digital to win with the connected shopper is an essential tool.
- Strategic Shifts: Next-generation commerce requires a shift in mindsets, operational capabilities, KPIs and, above all, new strategic initiatives. Retailers are constantly on the lookout for operational efficiencies (franchising) and differentiation (new formats).
SUMMARY OF KEY LEARNINGS
Suppliers are expected to align with the new ‘speed first’ thinking in their packaging and merchandising solutions.
Speed-based catchment areas sees all retailers striving to be closer to the shopper, which requires flexibility and versatility.
As FMCG space in convenience outlets is under pressure from new services, brands need to turn temporary space and assortment limitations into mobile platforms despite new operational complexities.
As retailers focus on mission-driven, time-of-day merchandising, brands will proactively approach retailers to discuss more flexible product lines that are missions based.
As loyalty moves away from instant savings to a ‘benefits ecosystem’, shopper savings become more indirect and deferred, which may be detremental to brand equity.
From payment to loyalty savings, digital is essential to engage and retain shoppers. It is also an essential source of shopper data for the convenience channel.
Shifts in operational models, such as franchising, may result in failures in execution and consistency in promotional activities.
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