The convenience store is a tried and tested format. Generally not too ambitious in its design or the ranges it stocks, the aim is surely to allow the customer to get in and out as quickly as possible. The customer’s main aim? To select from a limited but useful range of standard staples, often at times when a standard supermarket shop isn’t an option.
According to the Association of Convenience Stores, the top three products sold in convenience stores are tobacco or e-cigarettes (21%); alcohol (15%) and chilled food (13%). Snacks and sandwiches only make up 3% each with hot food and drinks even lower at 1.5%.
But there’s a new type of convenience store on the block, one that is data-led and personalised to its clientele. In February 2020, Sainsbury’s launched its ‘On the Go’ concept in the City of London, the first of its kind to be targeted to the precise needs of a very localised demographic.
Garnering data from the Nectar card scheme, as well as historic customer sales data, demographic statistics and catchment area information, Sainsbury’s On the Go has tailored everything from store layout, in-store services and consumables ranges to a very specific, city-slicker customer.
Catering for busy City workers, there is a perch table eat-in section complementing a ‘grab and go’ station. Ranges change throughout the day, providing breakfast, lunch and afternoon tea options and both Argos and Tu provide a click-and-collect service. With the City outlet as a pilot, Sainsbury’s have said there are 130 tailored convenience stores that could follow suit.
To stay relevant on the high street, retailers have to stay relevant to their customers and the way to do that, as Sainsbury’s is demonstrating, is through taking a data-led approach.
This doesn’t mean personalisation to the nth degree. In fact, research we have carried out has shown that customers find over-targeting a real turn-off, with targeted product recommendations only really sparking interest when it involves something complex, like financial services. Nor does it mean only stocking the aisles with products customers have already expressed an interest in. This just leads to a narrowing of possibilities, trapping consumers in an echo chamber of their past purchases.
Purely functional stores, something you could imagine might be a boon in the convenience sector, also fail to build that all important loyalty. Our research shows that customers don’t rate deal-based retailers like JD Sports, WHSmith and Aldi very highly, and that being ‘good at the basics’ simply isn’t good enough. Instead, stores like Boots, Marks & Spencer and John Lewis scored well among respondents – also brands that are good at the basics but each with a little bit more to offer.
Customers aren’t looking for extravagant fireworks, just genuinely useful, intuitive experiences. This attitude encompasses technology too. An immersive, 3D, virtual reality experience might be a step too far, but one-touch home delivery options, quick stock check functionality or, in Sainsbury’s case, simply shopping till-free via the Smart Shop app, helps customers stay calm and in control – a highly underrated retail experience.
Where the Sainsbury’s On the Go concept is likely to succeed and others should follow is in tailoring the central proposition tightly to the core customer base but also using data and machine learning to reveal insights that can enhance the customer experience. Real personalisation is down to how much you know your customer, not how much you know about a customer. Innovating based on their interests – expanding the lunch ranges, introducing in-store dining – usually anathema to the convenience store format – are all ways to introduce creativity that doesn’t come at the expense of practicality.
David Coombs, Head of Strategic Services, Cheil UK