Reinvention Tension Confront affordability issue, warns industry researcher
By Angel Abcede
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CHAPEL HILL, N.C. -- Affordable pantry items, cold remedies positioned in coolers and blood-pressure machines are just a few remedies to a consumer base wanting something new from tomorrow's convenience stores, according to one industry researcher.
The nation's economic downturn has made an indelible impression on consumers, said Thom Blischok, president of consulting and innovation for Information Resources Inc. (IRI), Chicago, before about 180 retailers, suppliers and consultants attending Greensboro, N.C.-based Gilbarco Veeder Root's fourth annual Retail Technology Conference.
Today's c-store shopper lives in a world of "economic sobriety," Blischok said, perceiving products and services through a "lens of affordability."
From IRI projections, he said c-stores will see a 27% decline in traffic in the coming months, with a main culprit being the impact of the current recession on consumer psyches.
"Who remembers when the American Dream was to be rich?", Blischok asked the audience. "Today only 20% [of IRI survey respondents] want to be rich; 94% want to just take care of themselves and their families."
As a result of this pessimism, 86% of consumers polled by IRI report making decisions of what to buy at home vs. making choices at the store, where impulse purchases are important to retailers.
In the recent past, only 50% of respondents in other IRI research said they made lists when they shop. Today, it's 73%, he said.
Consumers in general are making more trips, buying less and visiting a greater number of stores, basing their choices on the perception of value.
To respond effectively, retailers have to be innovative and differentiate themselves. Blischok suggested offering "meals for now and meals for later"; affordable health and wellness; smaller portions and better-for-you options; and emergency, health-care items. One of the ideas he suggested was higher-end sliders, fashioned after the success Oak Brook, Ill.-based McDonald's appears to be having with its new Angus burgers.
But simplicity will also play a role. Consumers are looking for simplicity in their shopping experiences, he said, noting how during a recent store visit, he experienced 40 facings of chips, four levels high. "That's not simplicity."
Consumers in IRI studies defined simplicity in the following ways:
Understandable deals.
Products being easy to locate.
In-store reminders of specials.
Easy to compare value.
Concise and relevant information.
Blischok (pictured) suggested numerous options that might help retailers imagine new directions. Among these ideas were creating the right assortment and price points for pantry and emergency-use items; placing cough and cold remedies near juice coolers to play to the "rest, juice and medicine" remedy; and possibly even offer self-diagnostic options such as devices that test for blood pressure or glucose levels.
"It's about role definition," he said. "It'll change the game."
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To respond effectively, retailers have to be innovative and differentiate themselves. Blischok suggested offering "meals for now and meals for later"; affordable health and wellness; smaller portions and better-for-you options; and emergency, health-care items. One of the ideas he suggested was higher-end sliders, fashioned after the success Oak Brook, Ill.-based McDonald's appears to be having with its new Angus burgers.