Convenience retailers need to improve their use of data

By Liz Wells in Industry News 15th April 2021

The convenience sector needs to improve its use of data in order to compete with Amazon, which could be the 6th largest supermarket if current shoppers swapped just one grocery shop per month, new research indicates.

The TWC Trends Spring 2021 Report, from intelligence and technology consultancy TWC, highlights that the online delivery trend is here to stay and will only get bigger with convenience stores needing to increase their participation in order to combat Amazon growth.

Tom Fender, development director at TWC, said, “We believe that although Amazon is discussed a lot as a threat to our channel, the fact that 72% of the population has an account really emphasizes that threat. And now, it is now a double threat with the launch of Amazon Fresh and a triple threat with its investment in Deliveroo.

“Their online platform may not impress Gen Z, but their food-to-go and delivery solutions are sure to be winning hearts and minds in this consumer cohort.”

Fender believes the convenience sector hasn’t embraced the importance of data as it should have. “The convenience sector has to take stock. How are we going to work together or independently to understand customers better, in the same way Amazon does?

“We probably can’t compete on price, we probably can’t compete on range, so why don’t we compete on something that we should be good at which is knowing our customers. That would be a useful thing for the convenience sector to look at.”

The report of 1,200 consumers segments shifting trends into five themes that operators must focus on:

Online Explosion: The digitalisation and delivery of food and drink.

Experiential Hospitality & ‘Retailtainment’: Re-thinking the role of bricks and mortar as customers seek personalised, engaging experiences out of home. More than 50% of respondents said convenience retailers need to “jazz stores up” and make them fun and engaging.

Do Good Feel Good: This includes sustainability, but also being a good employer and demonstrating this publicly. Consumers are willing to spend money with businesses that demonstrate they are a good employer.

Data & Personalisation: The use of data is key, but one size does not fit all.

Save v Splurge: Balancing value, as well as premiumisation, to meet divergent customer needs.