If the past two years have taught the retail industry anything, it is to anticipate the unexpected and to adapt accordingly. The sector has faced multiple challenges between the continuing impact of COVID-19, supply chain obstacles and resource struggles. Add to this, the rising expectations of today’s omnichannel consumer plus their desire for more enhanced and engaging experiences and increasingly, tech-enabled convenience. It is not surprising that some brands are simply trying to keep their heads above water as they navigate their way into a new year.
Convenience is being disrupted. The emergence of ‘scan and go’ concepts along with an array of food delivery solutions and the growth in social commerce are defining the experience. Consumer expectations continue to evolve, therefore, maintaining relevancy in 2022 will hinge on understanding their lifestyles and behaviours. However, core consumer desires remain; they still want stress-free shopping, convenience, personalised experiences, and good value always. A growing number of consumers are also seeking more meaningful connections that align to their values. Expecting more from brands than just functional benefits.
A US study tells us that 53% Gen Z and 54% millennials want convenience first in their future grocery shopping experience, Not just confined to the younger and future generation of shoppers, the pandemic era has shown that convenience has become normative for all generations. In this world of omnichannel convenience retailing, maintaining an elevated brand experience can be challenging. The customer journey and the experience principles that underpin it need to be so seamless, that you do not even notice how it came to be.
As convenience formats evolve, we are seeing an ethos of flexibility with the convergence of a convenience-first, elevated quality offering. Creating a destination for the community where the consumer can connect, dwell, be educated and inspired, dialling up the authority of a truly engaging experience. Stores like Bridge in Zurich successfully blur the lines, blending shopping, a fresh food market, creative gastronomy, events, pop-ups, and a relaxed meeting place for social connection. Actively leveraging social as a bridge to the physical store, frequently hosting livestreaming events across social platforms.
Another Zurich store gooods, is a new type of convenience store and a benchmark for the industry, taking inspiration from Foxtrot in the US. An experience underpinned by technology, with sustainability rooted in the brand experience along with a strong emphasis on health and well-being. Sustainability and circularity are big topics of conversation in retail - integrating and thinking about the longevity of what is being created and its purpose will be pinnacle to the future of retail.
Choice Market in the US is a beacon as a tech forward retail chain, crafting a uniform experience across all platforms that lead with a health focused, prepared food offering. The brand has invested in cutting-edge technology, delivery service and frictionless shopping with autonomous contactless checkout to redefine modern convenience with consumers in a digital age. Through understanding how their consumer wants to shop, Choice enables them to choose the channel that suits them best, be it in-store, online or social. Their App facilitates order ahead for pick up instore; order for delivery or as a frictionless platform to check in, and shop and go in Choice Mini Mart. Targeting non-traditional retail with this model such as healthcare, airports, education as well as low-income neighbourhoods. Mike Fogarty, CEO sees taking under-utilised space and bringing a high-quality food offering to it as a driver of opportunity for a new era of healthcare hospitality retail. Appealing to the conscious consumer, they have integrated circularity practices within the back of store operation with a ‘purposeful about perishability’ stance. Their Transit Centre (forecourt format) is evolving based on multi-mobility with EV charging, e-bike share, prepared food ordering kiosk and EV delivery.
Albert Heijn in the Netherlands is another example of an adaptive retailer responsive to changing customer demands. One size does not fit all for the chain, and they are reacting with purpose to meet diverse needs across their estate. This requires constant evolution - changing formats and changing range. This level of flexibility spans larger stores focused on food inspiration catering to different day parts enabling the shopper to dine, play, and shop in the one location. Partnerships with local restaurants provide a strong food for later proposition to leverage the ‘at home’ experience. Low traffic unmanned stores target the ‘good food’ at work consumer, using contactless to access fridges. City formats with a defined front of store grab and go experience remove the need to go further into the store to make a purchase. Finally, servicing the aging population with tailored meal solutions to meet dietary requirements via a direct-to-consumer model.
Digital acceleration and technology enabled convenience has exploded. It is front and centre to the future of convenience retail. However, it needs consideration and not just tech for tech’s sake. There is an evolution in how we are leveraging technology in store. Conversations need to pivot back to more the engagement side of the tech experience - finding the right point of intersection between engagement and utility in the store experience. What is the purpose of digital tech? How is it differentiating your brand, serving a real need, and aiding convenience? Marrying digital and physical together in the right way will create cohesion, mining data and optimising content to support the store experience position.
When contemplating the future of convenience retail or retail in general we cannot overlook the role of design in supporting definition and development of new concepts. Retail design and design strategy is pivotal to helping brands come to life in physical spaces and across other touchpoints in a brands eco-system. Retail Touchpoints research points to 71% of respondents stating that design, the visual component of design and retail strategy being more important than two years ago. 80% of impressions are based on sight, grounding design as important to creating visual experience. It is intrinsic to the success of building brands, building recall, defining the richness of the experience, and creating connection with the consumer.
Research studies around cognitive neuroscience and how our brain reacts when we encounter something beautiful termed ‘neuroaesthetics, validates the business case for a well-designed, beautiful store. Science is now confirming what many designers already knew – that aesthetics matter, as much as form and function. They can communicate brand value and in turn how connected a customer feels to a brand, and the level of loyalty and trust they are willing to devote to that brand. An excellent retail experience aims to educate, facilitate social interaction, provide a sense of momentary escape, or provide an efficient way to make a purchase. Design that is beautiful can meet all of these objectives. It has the ability to improve the success of all retail experiences.
As new food service concepts materialise in convenience formats, sub-brand identities are key to the value proposition that the concept delivers. This approach creates a platform for consistent expression of individual brands boosting perception of the overarching brand as a credible foodie destination without sole reliance on the established concessions. Whilst modularity has been around for some time in retail, it has accelerated to serve many purposes over the last two years. Sub-brands can facilitate considered modular formats that can flex responsively to new food offers or trial new initiatives per location and demographic. The success of sub-brands can lead to exciting opportunities such as future range appraisal in take home, complimentary products and even standalone stores that would not be possible with the parent brand proposition. Morrisons Market Kitchen in the UK champions the sub-brand approach.
Our own work, notably sub-brand development successes - ROSA coffee, N’ice Cream, The Rotisserie and Taste of Mexico for the Maxol Group has allowed them to harness the possibilities of a modular approach to their concessions, giving them greater flexibility. The flagship Centra, Millers Glen successfully considers this thinking and format development initiatives. It is a more evolved neighbourhood convenience format with a food court leaning and focus on take home meals in a defined ‘Prepared Meal’ section. Premium cues have been elevated to reflect the local consumer demographic through material selection, new wall treatments and integration of sub-brands Moo’d ice cream and the Frank & Honest barista coffee experience with sit down café area.
The convenience retailers who will lead the way in the post-pandemic era will focus their efforts on establishing social interaction with their customers and building deeper connections with their communities. They need to ensure an authentic sense of local identity permeates their store. This move will reinforce efforts to maintain market share and loyalty against the backdrop of channel blurring and e-commerce commoditisation. Strategies for 2022 will be built around the ‘why’ or brand purpose, whilst remaining authentic to core values. Contingent on brand promise, cutting through the noise to decipher what elements make sense, what will drive engagement and what value can be delivered, will be vital. This will effectively meet the changing needs of a more divergent type of convenience consumer.
Niamh Higgins is the Managing Director of TapCreative.
She specialises in strategy, insights and consumer behaviour.
