04 May How Convenient is Your Network for the New World of Retail?
At the Checkout grocery conference in Dublin in February, a number of themes repeated in the presentations from the global industry experts. One such theme was the growing importance of convenience. Time is critical to the busy consumer and, along with an increased concern about their health, is a key consideration. Driven by increased expectations for transactional speed and quick and easy delivery options available online, the new consumer demands convenience. Services such as Amazon Go and “same-day” delivery satisfy this demand and will come to Ireland sooner or later. So how do Irish retailers compete?
Convenience involves two distinct parts. Firstly, it’s the transactional part – addressed by quick checkouts or online shopping. These are technology driven and require significant technological investment. The second part involves the journey to the retailer. How convenient is the retailer’s stores, concessions or collection points to the consumer? By convenience, we mean journey time, availability of parking nearby and ease and flexibility of click and collect services.
Knowing and tracking how convenient your web of interaction points (stores, collection points, same day delivery zones etc.) is to your target market is critical. Only by optimising and setting KPIs for this can you truly pursue a proper convenience goal. How convenient you are relative to your competition will strongly affect your attractiveness to the consumer.
In assessing this requirement, consider the following actions to promote convenience in your network;
- Define your ideal store network and KPI it – e.g. we want our stores to be within 10 minutes drivetime of 80% of our target market which is the daytime population segment of 45 to 65-year-olds.
- Define your ideal delivery targets and KPI it – e.g. we want to offer same day delivery to 70% of our online customers by 2019 and have collection points within 5 minutes drivetime of 80% of our target residential market.
- Define your ideal location types that improve your network convenience and monitor their availability and what they bring to your overall network – e.g. we like retail parks near Costa coffee outlets with lots of parking.
- Monitor your existing locations for changes in retail landscape and convenience levels and take action when necessary – e.g. which stores have a growing level of retail vacancy around them and where have my competitors stolen the higher ground in term of customer convenience.
Some retailers assume that because consumers have always come to their locations, they must be well placed. But due to changing consumer expectations around transactional time and the emergence of more agile disrupters, existing good locations may not be good enough in the future.
Of course, convenience is not the only factor in determining footfall. Providing experiences, entertainment and memories from the shopping trip are also key for certain trip types, i.e. giving the shopper more of a reason to visit than the transaction. But the consensus would say that combining optimum convenience with optimum experience is the secret sauce to success in this new retailing landscape.
Improvements and adjustments in your network convenience may be a slow process held up by inflexible leases and operational difficulties. But identifying where and what your nirvana network is, and making continuous small steps towards it may just about keep you on top of the game.
@ 2018 Storecast.eu by Feargal O’Neill
Gamma has launched a new cloud-hosted Store Network Optimisation Platform in Ireland and the UK. Storecast™ provides forecasting, monitoring and one-click reporting to support rightsizing omnichannel retail networks. It is powered by curated spatial market datasets including daytime population profiles and competitor locations. Contact us to arrange a demo!
About Feargal O’Neill
Feargal has over 20 years’ experience in formulating and applying location intelligence strategies in the retail sector. As a location analytics and spatial modelling expert, Feargal helps retailers realise greater benefits from location-based information.