Small-box is dead…

Today, convenience is no longer limited to the strict definition of being ‘a small close-proximity store selling impulse items and household essentials’. Convenience today is ‘everywhere retail by everyone’.

  • Catchment areas have been redefined by speed rather than distance as disruptive players like Amazon and Uber push the boundaries in fulfilment.
  • Other store-based channels, like discounters and drugstores, are increasingly stealing trips from convenience specialists with new solutions like meal deals.
  • As consumers no longer think in terms of channels, but focus instead on solutions and speed, traffic and basket have become progressively fragmented.

More options than ever now exist for convenience shoppers. What does this mean?

  • Both brands and suppliers must adopt a shopper-first approach where data-driven execution is framed around shopper needs and expectations.
  • At the same time both must step outside of their comfort zones in supply chain, merchandising and services.
  • For brand suppliers, shifting category roles mean that cookie-cutter solutions based on the planogram are no longer sufficient to cater to the format’s speed of change.

Today, the route to consumer is ever-more complex, necessitating operational agility, data mining and efficient back-end solutions. This complexity translates into commercial pressures on all fronts: channel-agnostic shoppers no longer tolerate premium pricing; store profitability is squeezed by new cost items, and ultra-urban locations create fulfilment challenges.

…Long live small-box!

For branded suppliers who want to grow in this channel… what’s next?

Suppliers must first understand the strategies and capabilities that convenience operators are putting into play as they react to this disruption.

Building on ‘lessons learned’ from pureplayers, retailers are now vying to create a holistic ‘convenience ecosystem’ around not only products, but also services and solutions. They are remodelling their value proposition, investing in innovative formats, leveraging digital tools, and driving retention by capturing new missions.

With commercial challenges in mind, convenience players across Europe have diversified their growth strategies to sustain margins. Today, organic expansion is more about new, differentiated formats in urban locations like Dia & Go. However, the majority of brand volume is still traded in mainstream convenience banners such as Carrefour Express.

For these formats, more and more retailers are now pursuing franchise-driven expansion. Capability-focused partnerships around digital are helping convenience players stay ahead in the speed and services battles. Even forecourt retailing is undergoing immense transformation with petrol companies like Shell and BP looking to convenience as a growth driver as European fossil fuel sales face continued challenges.

As convenience is redefined, rising numbers of retailers are looking to partnerships with brand suppliers to manage these modern-day complexities while pursuing new growth opportunities. Our Kantar Consulting Convenience Retailing Workshop on 23 October in London will help brand suppliers ‘unbox’ convenience beyond the store. 

We will discuss how competition and changing shopper needs are pushing convenience retailers into innovative and disruptive strategies, and what this means for brand suppliers going forward into 2019/2020. Kantar Consulting will support leading brand suppliers with take-home action plans to win with key European accounts. Join our one-day immersion workshop to understand how you can be the preferred brand partner for convenience players.

Learn more about the event here.

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