Millennials and Gen Z are the core consumer group within the convenience channel, with around 60 per cent of them likely to visit more than once a week, reveals a new report.

However, convenience stores will need to up their game and ensure they have the right offering that will differentiate them, as these demographic want their local stores to be ‘fun and engaging’, according to the inaugural TWC Trends Spring 2021 Report.

The research has also identified that Amazon could make a substantial share steal of the grocery market and that supermarkets may start to lose dominance especially with the younger generation and more affluent shoppers.

It also highlights that the online delivery trend that is here to stay and will only get bigger with convenience stores needing to increase their participation in order to combat Amazon growth.

“Here at TWC, we believe that although Amazon is discussed a lot as a threat to our channel, the fact that 72 per cent of the population has an account really emphasizes that threat. And now, it is now a double threat with the launch of Amazon Fresh and a triple threat with its investment in Deliveroo,” commented Tom Fender, Development Director at TWC.

“Their online platform may not impress Gen Z but their food to go and delivery solutions are sure to be winning hearts and minds in this consumer cohort. What we are most impressed with is the knowledge Amazon has on its customers which all comes from an obsession to gather, analyse and interpret data.  This is something which many people in retail overlook. It is the fuel of their engine!”

The research has revealed that millennials and Gen Z are very receptive to convenience stores collecting data. 57 per cent of millennials said that convenience stores should collect and use customer data more/better – to offer personalized products and promotions. Almost a similar number (56%) are in favour of stores launching some kind of membership/loyalty programme.

Millennials and Gen Z are a vital consumer group in convenience, as 59 per cent of the former and 65 per cent of the latter groups visit convenience stores more than once a week. This is higher than the 47 per cent on average for the total population, and way above the 32 per cent of baby boomers and 42 per cent of the Gen X.

At the same time, convenience stores need to look for a range rationalisation to improve the shopper experience as almost two in third (63%) say there are many products in a convenience store that they never buy or they would never buy.

58 per cent of them said convenience stores need to review what they’re offering/selling more often and a similar number found stores too cluttered and thought they could do with a ‘make over’.

Over half of them (52%) think convenience stores could do more to ‘jazz up’ their stores and make them a bit more fun and engaging, and an equal number suggest the stores need to broaden their appeal to people their age.

According to the survey, half of the population (50%) think that convenience stores are the most important retailer in their local community and said life would have been very difficult without them.

Over half of them (55%) also think that convenience stores could do more to demonstrate their sustainable or environmental credentials. Similar number (57%) are inclined to buy food and drinks from local suppliers/producers at their local store, and a bigger number of the population (62%) would be happy to buy fresh fruit, vegetables from local independent convenience store. 55 per cent think that convenience stores need to give more space to healthy products.

The research has also confirmed that PMPs are still playing an important role at demonstrating value and trust. 65 per cent believe that price marked packs mean that they are being over charged and 58 per cent think that it means they are actually getting some sort of discount.

There is also an indication that customers will still be willing to trade up for affordable luxuries. 53 per cent said they will be willing to pay a bit more for food and drinks compared to pre-pandemic in light of the last 12 months. Within convenience stores, customers are willing to pay 20 per cent more on a bottle of wine for a social get together with friends v their usual bottle of wine.

“This report deliberately focusses on the long-term impacts on consumer behaviour. We believe that the immediate after-shocks of Covid-19 have been copiously covered and the industry has a firm grasp of the likely sales patterns for 2021,” Fender concluded.

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