You’re not alone. That’s why we’ve caught up with our Managing Director Rod Taylor to find out more about how we can help brands to succeed in convenience.
The convenience sector continues to grow and is predicted to be worth around £44bn by 2020. What’s your perspective on this?
Convenience has seen steady growth for many years, but more recently it’s exploded. During the recession, shopper behaviour changed for good. ‘Little and often’ and ‘local’ are now terms everyone understands and convenience stores fulfil these needs perfectly.
But that’s not all that’s driven the success. Store standards and the range of products and services they now provide has improved - and we’ve seen a new breed of younger, entrepreneurial, business-savvy retailers push the sector forward.
With the support of the symbol groups and some leading brands, convenience, especially at the premium end of the market, no longer plays second best to multiple grocery. And this isn’t just about being the corner shop where Fred buys his pack of 20 or where Sally goes when she’s run out of milk. These stores have become multi-purpose destinations that people visit several times a week, with various shopping or food-to-go missions to match their busy lifestyles. The opportunity for brands in this sector is huge.
That’s not necessarily how all brand owners see it though is it?
As an agency, we recognised the opportunity over 15 years ago and have helped a number of leading companies such as Coca-Cola European Partners and P&G win in convenience. Others, who hadn’t embraced the sector until recently have woken up to the opportunity thanks to great media attention and insights coming from companies such as HIM, Mintel, Shoppercentric, KAM, POPAI and of course the IGD.
But many are still put off by the complexities within convenience – difficult to reach, time-poor retailers and the lack of marketing compliance when compared to other sectors. I also think brand owners find it hard to justify the initial investment, and it does require considerable investment to properly succeed in this area.
But there are great results to be had for those who do embrace the challenge and invest, wouldn’t you agree?
Absolutely. Just look at the brands/companies that have continued to support convenience and the results they’ve achieved. CCEP, P&G, Cadbury/Mondelez, KP, Pepsi-Co/Walkers, Mars/Wrigley, they’ve all seen year-on-year growth. Not to mention the tobacco companies such as PMI, JTI, BAT, which still rely on the sector – and continue to invest heavily.
But, conversely, brands that haven’t continued to invest have seen their market share in convenience drop including some cereal, confectionery and alcohol brands.
They all sound like traditional product areas for convenience?
Yes that’s true. Some are and continue to succeed, but remember shoppers have many choices on where they can buy these products nowadays and they vote with their feet. But as I said before, shoppers aren’t visiting convenience stores just for these types of products any more. There are great opportunities for many other food, drink and grocery brands – and of course the service providers like the Lottery, pay-points, ATMs and ‘click & collect’. Convenience stores will continue to adapt to shopper and consumer needs, so expect to see much more in fresh, healthy and local produce and more premium products as well as the usual ones we all know.
So how should brands go about opening up opportunities in convenience?
There are many aspects that Convenience channel controllers will be better qualified to comment on than me, like route-to-market, pack sizes, pricing policies, sales teams etc., so I can only answer from a marketing agency’s point of view. But I do know from experience what the key areas brands need focus on to get results:
1) You need to engage retailers and make sure they are aware of your brand/s and importantly your commitment to the sector. Retailers will listen to brands who support them and the sector. There are many ways to do this through trade media, sponsorships, events and face-to-face – and you need to have the right tools in place to do this.
2) Help them to understand the value of stocking your products. This isn’t just a case of saying, stock this Mr. Retailer, we’re going to be on TV. Sure, it helps, but brands have to remember that shelf space is limited and it’s a really competitive market, so you need to be more sophisticated in how and what you communicate in order to convince retailers to put your brand on the shelf in place of another. They particularly want to know what success other retailers have had with your products.
3) Create good, simple, category advice. Retailers want to know what to stock and how to display it. But be very clear on what works and why. Make it simple-to-action or, better still, put resource in place to fulfil this for them. If you can’t, incentivise and reward them for carrying out your advice themselves.
4) Provide the tools they need to support your brands in store. Compliance is always the issue here so make promotions easy to run and POS easy to install – or again, show them your commitment by installing it for them. Look to create the best presence you can in store, make your products easy to find and your promotions truly stand-out. Think beyond conventional print-based solutions, there are many amazing opportunities now for brands to utilise digital media technology in convenience. Likewise, use digital comms to engage shoppers earlier on their journey and aim to drive store footfall for the retailer.
5) Keep communicating. Your brands need to stay front-of-mind (or someone else’s will). Trade media is still a go-to source of information for convenience retailers but you also need to embrace digital technology, because all the best retailers have. Work on social channels, join WhatsApp groups, create your own platforms – and give retailers valid reasons to visit them.
6) Be where retailers buy. At cash & carry/wholesale depots and on their websites. Use the symbol-groups’ own media and be at their key trade events. Retailers are buyers too so use some of the same tactics you would when targeting shoppers, but in the right place and use language that’s right for them.
Lastly, don’t forget the importance of internal communications. Make sure key stakeholders in your business are clear on your objectives and put the tools in place to measure your success. Report back regularly to substantiate on-going investment.
To some it may seem a mountain to climb, but rest assured, there’s gold in those hills if you have the right support behind you. To discover more, contact [email protected] or call 020 7485 0100.