CHICAGO -- "Winners will align formulas, assortment, promotions and communication with shopper demand," Todd Hale, senior vice president for consumer and shopper insights at Nielsen, told retailers and suppliers attending his "Understanding the Convenience Store Shopper" presentation at the NACS State of the Industry Summit in Chicago.
While Hale's presentation provided many useful insights into the patterns of the modern consumer, there was a common theme to nearly all his data: it's all about innovation.
In the post-recession environment, Hale suggested that innovation can be an important factor in driving a higher price.
"Value is not about price--it's about a balance between price and benefits," said Hale, who cited Greek yogurt as an example of one of the many more costly specialty products seeing huge growth in 2011. Hale encouraged retailers to seek other product innovations in which commodity-driven value could result in larger profit margins.
The digital realm is another area Hale suggested c-store owners could seek to innovate in 2012. As more consumers move away from print and towards online sources for their news, retailers will need to make the move as well. Several competitors have had huge success "going viral": ShopRite has created a YouTube cooking channel to showcase its private-label brands; Whole Foods sold more than a million Living Social coupons in just 12 hours; and Walmart teamed up with Facebook to create the Shopycat app, which analyzes likes and dislikes of Facebook users to come up with the perfect gift from Walmart's inventory.
The digital realm also offers the opportunity to reach a wider audience than many retailers would be able to afford using traditional methods. "Television isn't a viable option for a lot of you," Hale said. "But digital is."
In order to stay relevant, retailers also need to dream big--other companies certainly are. For example, Kroger is dreaming of a world where vending machines could make c-stores obsolete by outfitting Ohio Northern University with Shop24, a robotic store that can hold up to 200 items. Houston's H-E-B Montrose Market offers customers a one-stop shopping, dining and entertainment experience by turning their parking lot into a movie and music venue, complete with a company-run food truck.
These concepts may sound out of reach, but refusing to innovate could come at quite a cost. "We'll see more big retailers having to close their doors because they're no longer relevant and are not innovating," said Hale of the outlook for 2012.
So how do retailers avoid this fate? Hale said the first step is to ask "Is there way to make the store experience more fun an entertaining?" Whether that answer is a beer cave, exciting food service options or live lobster vending machines, innovation is the key.
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