Dec. 12, 2012
-- In a new report “Convenience Store 2020”, ResearchFarm argues that convenience stores have the potential to become centres of a local ecosystem. In this sense they will effectively be hubs that enable other services to ride on the back of the footfall and infrastructure created by the store. These service provisions will range from click & collect partnerships to legal, banking, foodservice and pharmacy services.
Convenience stores will also need to be completely catchment centric. Simon Chinn, author of the report, comments: “The days of a one-size-fits-
all store format are long gone. Consumers now expect a more tailored store environment to suit their particular needs.” Therefore retailers will need to know the demographics of a specific catchment inside out, such as the age structure and socio-economic make-up of the local area. Increasingly this will involve utilising social media channels and other feedback mechanisms, such as loyalty card data to determine the size, location and ranges of their convenience stores.
Location will also become even more crucial than it is already. Locations of high guaranteed footfall such as suburban train stations, metros and bus stations will be intensely competed over. Retailers will also be looking to capitalise on strategic locations in local neighbourhoods where they have the opportunity to become local anchors and footfall drivers for the additional services they offer.
Another opportunity that convenience stores can capitalise on is in the creation of a more integrated offer. Shammi Luhar, ResearchFarm Analyst, highlights that in order for convenience stores to be successful it will require a multifaceted approach encompassing the store, location and private label offer. These three elements must be closely knit with the catchment of the store. Indeed joined up thinking around these principles will become an innovative guiding principle for the best convenience store operators. Retailers such as Migros in Switzerland already target their private label range to catchment specifics and have launched a dedicated convenience private label line that highlights a quick, on the go message.
An integrated approach will require effective supply chain management, using the convenience store, both in its traditional form as well as a logistics hub, for example, for online orders that will enable retailers to lower their costs and make their operations more efficient.
Overall local adaptation and catchment centricity will become the overriding focus for convenience stores in the years ahead. Only by effectively addressing these elements will retailers be able to establish an eco-system around their stores.
Future drivers of convenience store growth, such as rapid urbanisation and ageing populations, will result in more format fragmentation going forward, as stores will be adapted to suit the needs of specific catchments. This is due to the needs of growing urban populations and the more specialised services demanded by the aged in their neighbourhoods due to their relatively weaker mobility. This will imply that a one (small) size fits all for convenience stores will no longer be good enough.