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Why Retailers Should View Convenience as a Mindset Rather Than a Store Format
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Why Retailers Should View Convenience as a Mindset Rather Than a Store Format

Convenience doesn’t have to be just a store format. For consumers, convenience stores often represent a means to a need state, but operators should view “convenience” as a mindset rather than a channel.

As small-format locations presented within arms reach of busy, multitasking consumers, the opportunities to capitalize on fresh, ready-prepared and even packaged foods are plentiful. While only about one-third of U.S. convenience store shoppers plan to purchase fresh foods in this channel, the reasons why most consumers shop for these items elsewhere aren’t set in stone.

The top barriers to purchase consideration for convenience stores aren’t due to the in-store environment itself

In fact, the top barriers to purchase consideration for convenience stores aren’t due to the in-store environment itself. Rather, the majority of consumers indicate that quality, assortment and value that are the most likely attributes to dissuade them(1).

As noted in Nielsen’s most recent Total Consumer Report, one in three Americans believe that products in convenience stores fail to deliver a good value for their money. Conversely, just 4% perceive environmental factors like store format, customer service and wait time as barriers to this channel(2). With the proper nurturing, convenience store operators can change consumer perceptions about quality, optimize their assortment and better utilize promotions to offer a greater sense of value.

Despite some challenges, performance across the total convenience channel has varied. Overall traffic declined by 2% last year(3) and U.S. store count dropped by more than 350, but most store closures affected gas stations and kiosks. In fact, more than 450 new conventional convenience stores opened throughout 2017(4). So even though traffic to the overall convenience and gas channel declined, we know that the retail footprint for conventional convenience stores has grown. In addition, consumers are ramping up their grab-and-go shopping, highlighting areas of opportunity. Notably, shoppers are spending 2% more per trip on FMCG categories within the convenience and gas channel than they were a year ago(5).

Across the Nielsen-measured convenience channel, sales increased by 1% in 2017 to more than $140 billion. But very few categories drove this trend. Salty snacks are among those performing well, seeing dollar growth of 2.3%(6). How other departments can thrive in this sector of retail remains limited by how consumers perceive this channel today. Stigmas still cloud consumers’ ability to view convenience stores as a viable and “convenient” alternative for ready prepared and packaged food and beverage needs.

Through purposeful messaging, the role of this channel can be optimized to better serve the needs of convenience-oriented consumers. Similar to how store branded products have surmounted the challenges of quality and value propositions, there is opportunity for convenience stores to do the same.

For additional insights, download our latest Total Consumer Report.

Notes

  1. Nielsen, Convenience Store Choice Drivers, 2017
  2. Nielsen, Convenience Store Choice Drivers, 2017
  3. Nielsen Homescan, Trip Projected Data, Total U.S., 52 weeks ended Dec. 30, 2017 vs. year-ago, UPC-coded
  4. Nielsen TDLinx, 2016 – 2017
  5. Nielsen Homescan, Trip Projected Data, Total U.S., 52 weeks ended Dec. 30, 2017 vs. year-ago, UPC-coded
  6. Nielsen Convenience Scantrack, NACS Product Hierarchy excluding food service, Total U.S., 52 weeks ended July 1, 2017 vs. year-ago