The wholesale market is being influenced by a number of consumer trends, according to research by TWC – The Wholesale Company. More people visited a hospitality outlet than a supermarket in October 2021. Broadly speaking, people are entertaining at home, they are seeking value and they are concerned about sustainability. Tanya Pepin, Director at TWC, passes on her advice for retailers and hospitality outlets to grow their business while operating in an ever changing market.
So what does this mean?
Consumer behaviour is changing quickly, so staying on top of consumer drivers and re-positioning products and services to meet these changing needs is essential right now. Here are some thoughts on how hospitality operators and convenience retailers could adapt to take advantage of these trends.
The first three trends we have highlighted are not mutually exclusive, and whilst the primary driver for them might be Covid-19, new habits repeated for any length of time tend to stick, so it is reasonable to expect that these behaviours are becoming engrained. Here are some tips for how retailers and hospitality outlets can grow sales through changing times:
1. Tactics to drive frequency: loyalty schemes; a frictionless customer experience; subscription models; and expanding the range of services offered to meet more consumer needs. The Pret Coffee Subscription (despite some teething problems regarding the availability of certain drinks in the range) is a great example, offering up to 5 drinks a day for an all-in price of £20 a month. Here’s how to start: calculate average customer spend on an every day item – say coffee but it could be newspapers, slushies, sausage rolls or a particular combination. Commoditise the weekly spend figure into a round number and offer it as an unlimited deal. This will drive footfall, build loyalty but, most likely, it will also drive incremental spend by ensuring your customers return frequently to maximise uptake of their subscription, but along the way they may well buy other items too.
2. With high future intent to entertain at home, retailers and hospitality outlets can create solutions to tap into this occasion. Whether that is via meal deals, food and wine pairings or ‘big night in’ promotions in retail, or prepared meals to serve at home, snacks for grazing, professionally made desserts or meal kits in hospitality – taking the hassle out of entertaining will certainly win customers over.
3. Personal finances are polarised right now. Some people have been able to save or increase their earnings during the pandemic whilst others have had a tough time financially. Different promotional mechanics can tap into those at either end of the spectrum. For the truly cash strapped, sharp discounts will really help and for those who are tightening their belts – a promotion on a relatively low cost item is likely to encourage purchase as a ‘treat’ occasion – during financially constrained times, people are still looking for ‘treats’, it is just that the value of the treat will be slightly lower. Subscriptions and loyalty schemes also work well – enabling the customer to feel they are getting a great deal, so long as it is well executed.
4. Finally, the environmental issue – there has been no avoiding media coverage in the last 12 months, whether it is COP26, Extinction Rebellion or David Attenborough, consumers are very aware of the pressure being put on them to make more mindful choices when they purchase anything. There is no doubt, that some consumers are further along this journey than others right now but it is changing and older consumers are catching up their younger peers. Demonstrating that a business is aiming for a Net Zero impact will soon be more than a nice to have, it is going to be a must have. That said, it is currently a USP for the businesses that are leading the way and, for the early adopters, they will have first mover advantage as the rest of the market pivots to try to catch up.