Co-op Franchise UK – convenience retailer The Co-op is working on new customer insight to build on the success of last year’s summer, which saw sales soar on the back of the scorching weather.
Last summer was “phenomenal” according to BWS category trading manager Simon Cairns, with the combination of Fifa World Cup and the great weather translated into very strong summer trading that had continued into the autumn and traditionally quieter pre-Christmas period.. Speaking to The Drinks Business in the autumn, he said the work done on clustering the range in stores had paid dividends and the strong summer had built “real momentum”
“The summer highlighted yet again how important having chilled space is in a convenience store has been for us, and having an offer that is ready-for the consumer.” he said. “More and more customers are having the confidence that you dont’ need to go to a large multiple to get an interesting range of wine, you can go onto your local high street and find an interesting and very credible, well-priced bottle of wine.”
As a result people had the chance to “reappraise” The Co-op, according to Senior wine buyer Gyles Walker, who told db at last week’s tasting the stores has been through a transformation in recent years and were now ‘looking fantastic’
Walker old db at the recent press tasting the challenge now was to understand the customer and engage with them better.
“Have we retained them [this year], will they come back again? Yes, we’re well into spring now, and the key point to convenient is availability and daily logistic drops which enable it to react quickly to the weather.”
As Walker points out, “We can’t carry much stock, so it has to arrive [daily].”
“We’re now looking at numbers and we are retaining those customers. And it’s an opportunity to engage with them in other ways, for example food and wine pairings.”
The BWS team is working with the food team to pair wines to the latest offer, providing tastings to pair with the latest launches or by occasion.
“We’re working with marketing to use channels in store, including shelf edges to say what it goes well with, and The Co-op magazine is a great opportunity to talk about it, and also social media. “We’re using those channels to ‘nudge’ consumers.”
The retailer is also conducting research into the occasions and missions that customers are shopping for – essentially what they are looking for at any given moment when they come in store that determine their buying habits and decision-making processes (also known as a ‘decision-tree’).
“And how can we understand that customer decision tree to make the customer purchase choice easier?” Walker says.
“The biggest challenge to us as an industry is how much people are engaged with the product. Some are happy with what they know and what’s presented to them, but we’re concentrating on two types of customers – the ‘quick and easy’, who know what they want, they want chilled, a good price, in and out, and the ‘foodie’ who is more engaged.”
“They will look at the entire range and have an idea of the occasion, but are open to suggestions or what’s on offer, what they might want to try. They are likely to explore more into the product. So those are two decision-trees – it’s about understanding that one size doesn’t fit all, we have to bring it together and answer those and ensure what it is in the range and how we talk about it.”
Evolution not revolution
Walker said the addition of 100 new stores last year, with another 100 or so set to open in 2019, was opening the business not only to new customers in new areas, but a slightly different customer base. He cited the new franchise at Leeds University, and the increasing number of stores opening under apartment blocks with shared living and dining spaces.
“There is an interesting growth in a new ways of living and people will buy groceries in a different way,” he said.
“We’re seeing the involvement of customers, and new relationship with BWS. It’s an exciting time in the industry, we’re seeing format ideas coming through, replicating how people want to have that relationship with wine, and we can tap into those trends.”
“And as the customer is always evolving, so the portfolio is always evolving too – so we’re always on toes about how range develops.”
Range review were, he said, a constant ‘evolution rather than the more expensive revolution’, but recent refreshes have been bearing fruit.
“Sales growth is coming through, we can refine it and make it easier for customers, that’s the challenge, how to execute it and make it easier for customers to shop.”
The Co-op has seen wine sales grow ahead of the market in 2018, up 4.2%, with market share up 0.3 percentage points. The convenience retailer already over-indexes in BWS and is now supplying an extra 4,000 independent stores through its acquisition with Nisa.
By Arabella Mileham
Source: The Drink Business