The big opportunity for convenience will continue to be around prepared meals. While lunch and dinner offerings are doing well, the sector is still working how it can capitalise on breakfast so that's an opportunity the sector will no doubt work on.
Convenience retailers need to work hard to retain the shoppers that they've won last year. 2020 has thrown all corners of the world into chaos and brought with it unprecedented challenges for business of all shapes and sizes.
The retail sector has shown agility and flexibility throughout 2020. Across the country, people have been shopping in their own community, which has provided a boost to convenience stores.
Dealing with ever-changing restrictions has been the biggest challenge for retailers, particularly for large banner groups with stores spread across all states of Australia, as often each geographic area was operating with different requirements. And with little government consultation and usually only a short warning time, retailers had to be quick to pivot and implement changes as they arose.
But with Australia gradually making its way out of lockdown and state borders reopening, we’re all enjoying our first taste of freedom. And retailers are preparing to take their learnings from 2020 and prepare for a successful year ahead.
Consumer preferences have changed
Peter Hanson, Director of Client Services at CROSSMARK, says that 2020 has been a real eye opener for both retailers and consumers who are discovering new convenience offerings in their local areas.
“COVID-19 has educated consumers that convenience and independent grocery stores exist and that they offer a range of solutions. Now it will be about finding the balance between convenience, price, and the value people place on time, which has always been the challenge with convenience,” he says.
“There is also a lot more understanding from the sector itself, that there is an offer in it. We’re all so time poor and busy, and time saving solutions are now on people’s radar. We’re even seeing some convenience stores bringing in e-commerce platforms to help drive traffic to stores such as Australia Post setting up ‘parcel lockers’ for parcels to be collected from.”
Customer retention is key
As Australian’s rely more on convenience and independent grocery stores, operators have an opportunity to carve a niche share in the market that often has bigger margins than big-box retailers.
“The big opportunity will continue to be around prepared meals. While lunch and dinner offerings are doing well, the sector is still working how it can capitalise on breakfast so that's an opportunity the sector will no doubt work on,” says Hanson.
With a savvier bunch of retailers now purchasing through convenience stores and with a renewed appetite to spend, there is plenty of opportunity for the convenience channel as we head into 2021 – the key is delivering a great customer experience to keep those shoppers coming back.
This excerpt feature is from Convenience World's January 2021 issue.