Investing in promotional activity in the convenience store sector makes sense for brands and retailers, argues David Norbury, chief executive of REL Field Marketing
Few brands today would question the power of field marketing, particularly in a financial climate that is forcing the big marketing battles onto the shop floor.
However, while in-store promotions bring a powerful immediacy to a brand’s marketing efforts, thanks to their proximity to point of purchase, many companies are still missing out by continuing to focus their point of purchase (POP) activity exclusively on the big supermarkets and overlooking the opportunities in the convenience sector.
Although working with the convenience market can have added complexity, given the many different routes to market, brands are unlikely to be bound to the same tough trade trading terms or activity costs in smaller retail chains.
With almost 50,000 stores across the country, and currently worth a staggering £29bn, the convenience and independent sector continues to rally in a tough economic climate, and big brands, such as Red Bull, are already taking the sector very seriously to great effect.
What is also helping to drive awareness of the sector is the continued expansion of major grocery brands into the convenience market.
The Co-op’s takeover of Somerfield, Tesco opening a new local store seemingly every week and both Sainsbury’s and Waitrose showing increasing commitment to convenience is a clear indication of the growing strength of the consumer proposition in this area.
Furthermore, it demonstrates to brands that store standards in key markers such as quality, range and value for money of products offered are all improving dramatically.
The UK convenience market already includes big name brands such as the Co-op, Londis, Costcutter and Spar, as well as independently owned shops and smaller store formats from the supermarkets.
It also boasts a growing retail club phenomenon with Best-One from Bestway and Booker’s Premier fascia.
And the sector is growing – up 6.1% in 2009 to £29.1bn accounting for 20% of the total food and grocery market, according to IGD. And with the Co-op pulling over 2.4 million people through its doors 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.
But they need to be aware that it is not simply a case of rolling out existing programmes across the convenience sector; they need to develop a clear POP strategy and vision for each type of outlet, and there is a real need for independent and convenience store experience to help build this.
For the stores themselves, getting high-profile brands to stage field marketing activity in their shops will have an obvious boost on sales and revenues and will also have the added bonus of establishing them on the map for further activity.
With so much marketing activity currently being focused at the point of purchase, shop floor space – particularly in the larger chains – is increasingly being seen as a valuable media channel and a potential source of additional revenue for the retailer.
By engaging with brands through field marketing campaigns, convenience stores are in a better position to capitalise on this potential income stream.
Field marketing agencies like REL offer brands the ability to target outlets with the highest opportunity value using advanced stores databases and consumer geo-demographic mapping. On top of this they provide a holistic and integrated service that has the right balance of field sales, direct mail and telemarketing, as well as an ability to measure return on investment and deliver strong returns for brands.
This sort of expertise is vital if brands are to generate significant return on investment from their activities in the sector.
POP promotions in the convenience sector are a 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.
