Expert Column: Convenience Rules in Grocery

It should come as a shock to no one that convenience matters to consumers. Across income brackets and store formats, shoppers want a painless, quick dash to the store. To serve this need, retailers must first understand the mission-based shopping trip, so that everything from store layout to special offers and promotions can offer convenience and speed.

Customers are looking for convenience in three key areas:

• Baskets: Small baskets and "fill-in" shopping trips are growing, bridging the gaps between larger weekly trips.
• Products: Customers are shifting from traditional ready meals to fresh prepared meal solutions, and are increasingly interested in simple and quick cooking from scratch.
• Format: Whether it's express stores or online, convenience retail in its broadest sense is in high growth.

Rising to the Challenge

To rise to the challenge of meeting customers' need for greater convenience, retailers must offer products that provide speed and ease. Milk, soda, beer and fruit are the most common products included in small baskets, with ready-to-eat and pre-packaged categories also thriving. Retailers must consider how they can tap into these categories.

As customers execute fill-in shopping trips on the way to or from work, or run to the store during breaks, there's big demand for food on the go. From snacks to prepared meals, treats and soft drinks, products for instant consumption will see continued growth. Bundling complementary products together at a discount –- such as "meal deals" in which sandwiches, chips or chocolate, and a drink are sold together –- serves customers' need for convenience and immediate nourishment. Retailers should also consider bundling products such as wine with chocolate, or beer with pretzels, for similarly appealing pairings.

Urgent Trips

Some shopping trips are more urgent than grabbing snacks. As "emergency" trips contribute significantly to the growth of small baskets, retailers must focus on availability and distribution. Marketing and communications can help customers find crucial products before they even reach the store. Using insights derived from customer data, retailers can also anticipate customer needs, reminding shoppers when they're running low on essential items and directing them to where to find them at their nearest store.

Additionally, dunnhumby research shows that prepared meals will continue to grow globally at a rate of 3.5 percent through 2017. Time-poor customers in families where both parents work are increasingly reliant on budget-friendly alternatives to restaurant meals. Prepared meals, especially in the "fresh and ready" category, fill this need. There’s also growing interest in quick, easy meals that can be prepared from scratch. In addition to expanding meal solutions that focus on creating fresh, low-cost and healthy options, retailers should also consider innovations in fast and uncomplicated menu planning, with an emphasis on ready-to-cook options.

Make it Personal

Price-sensitive customers want healthy yet substantial bargains, creating a market for competitively priced products whose marketing emphasizes their nutritious, filling qualities. The boom in "personalized" meal delivery services demonstrates how those with more disposable income also have an appetite for such products. Therefore, meal solutions delivered directly to a customer, with fresh ingredients supplied in the exact quantity required for the recipe, also have appeal. These satisfy the need for a painless, home-cooked meal that feels personalized. Presentation, packaging, marketing and communications should focus on the natural, healthy and hand-cooked elements of such products. Demonstrate that the product will make consumers' lives easier, and get food on the table quicker (and possibly cheaper), and sales should follow.

According to dunnhumby research, 25 percent of baskets in large-format stores now contain three products or fewer -- in the convenience format, this is 55 percent. Retailers can make the most of this trend by monitoring the performance of all products and variants in the convenience format, and noting the top categories, both in-store and online.

Convenience shopping provides ample growth opportunities for retailers at all levels. As private label brands are seeing major growth in convenience products, competition between national and store brands for the convenience dollar will be fierce. Instead of employing guesstimates and hopes, retailers must base their convenience strategies on robust data and sharp insights drawn from them. Otherwise, only the competition will be able to illuminate gaps in the market and how they can be filled.