Brands have long been aware of the power of field marketing, particularly the immediacy that in-store promotions and their proximity to point of purchase brings. In recent years much of this activity has been focused on the supermarkets, but those who now fail to take note of the convenience store sector will find themselves missing out.
Worth a staggering £29bn and growing, the convenience sector continues to rally in a tough economic climate and brands are gradually reappraising the convenience opportunity. This, despite store numbers themselves declining at 1.6% is a clear indication of the growing strength of the consumer proposition and increasing store standards such as in quality, range and value for money of products offered.
The expansion of major grocery brands in this sector continues, such as The Co-operative’s recent takeover of Somerfield and with a new Tesco local store opening every week.
Brands must surely realise that the convenience channel will continue to grow as a proportion of sales over the coming three to five years. It seems clear and logical that brands should over-invest to secure a larger share of this growth. They should perhaps look to devote a minimum of 20-25% of the level of spend they give over to multiple grocers.
I expect strong growth in convenience store promotions to help drive the field marketing industry. Today, the UK convenience market comprises of 42,000+ stores, which include symbol brands such as the Co-op, Londis, Costcutter and Spar, independently owned shops and small store formats from the supermarkets. And it is growing – up 6.1% in 2009 to £29.1bn accounting for 20% of the total food and grocery market, according to IGD.
But it is not simply a case of rolling out existing programmes across the convenience sector; brands should develop a clear point of purchase (POP) strategy and vision for each type of outlet.
The historic challenge for brands has been how to drive the right return on investment in small store formats. However this situation is changing, with Brands running in-store tests in the convenience sector with the idea to fin an economically viable field marketing programme that produces encouraging results.
Above all, brands and field marketing agencies should take a holistic view of the convenience outlet universe and develop a contact strategy looking at the size of prize and considering the channel and outlet attractiveness. Questions such as where does the brand fit; what is the cost or ease of penetration; the cost of servicing or frequency of calls should be asked.
POP investment and promotions in the convenience sector is an increasingly good bet for any brand as these outlets fulfil more of a convenience role to the shopper, satisfying both impulse and top-up shopping requirements. They offer bonuses such as locality – increasingly important as petrol prices and environmental concerns continue to surge, as well as fresher foods, better layouts and cheaper prices than before.
Convenience outlets offer more and better opportunities than ever; those brands and agencies that invest and unlock the promotional potential of convenience stores will surely benefit.