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The rising adoption of technology by convenience retailers is changing the way that brands can connect with them, opening a whole new world of influence. Getting it right will rely on the industry not repeating past mistakes.
The convenience sector has continued to rise in importance for brands as a large number of consumers ditch the big shop and continue to shop little and often, in more locations.
Given rising costs and the need to drive margin, brands have traditionally viewed convenience as a critical sector for because consumers tend to buy smaller, more margin generating pack sizes here.
However, working with convenience retailers to help them get the right products in-store with the right layout to make it easy for consumers to shop is tough. There are lots of stores, most of them are independently owned, and typically they’ve been influenced through field sales coverage which has a high cost of access when compared to rate of sale for most brands. Add to this the rising number of micro-brands and growth categories that retailers need to adopt to succeed and the challenge grows.
The industry has gone through a phase of brands running a combination of field coverage, rewards and retail facing websites to influence convenience retailers. Field and rewards work, but they’re an expensive route to go down and websites for this purpose, mostly haven’t worked. The reason websites haven’t worked has little to do with digital adoption rates in convenience, it’s driven by the fact it’s not convenient for retailers. Think about it from a retailer perspective, they’re time poor and it’s impractical to go to multiple sites just to access simple advice and offers.
With digital adoption on a rapid rise amongst convenience retailers, a new solution is needed to avoid making the same mistakes. If brands simply replace websites with apps, the same challenges are going to occur, and the output will be low engagement and usage rates.
We’ve worked with HIM to ask retailers how to overcome this. Their answer is simple – provide me a way to access advice and offers for multiple categories and brands and I’ll engage. In fact, circa 70% of retailers are interested in using apps that make it easy for them to engage with multiple categories and brands in one location.
This is the way brands will succeed, by integrating field and digital in a way that retailers want; not by doing their own thing and making it difficult for retailers to engage.
This isn’t to say only one app will be adopted and succeed. Each category has multiple brands, meaning there is space for 3 of 4 apps, it’s still a lot simpler for retailers than the 20 to 30 that could pop up if brands create their own.
Keep an eye out next week for the launch of our solution. We’ve built what retailers want, we’re working with one of the largest media businesses in the industry to engage retailers and have built a commercial model that makes it easy for all brands to take part. Or if you’d like to find out more now contact us.