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More from the AACS Study Tour 2017

What’s trending in Melbourne?

Convenience is always been on the move, following the latest trends to lure shoppers into what has come to be seen as an alternative way to shop for sundries and grocery items.

That’s why C&I Week chose to join the Australasian Association of Convenience Stores in its annual Downunder Study Tour, which this year was held in and around the progressive capital city of Melbourne.

After a two-day event spanning eight of Australia’s most innovative convenience stores, it seems space is king in the world of convenience.

Modern store design calls for ample floor space, allowing customers to feel a sense of freedom not afforded by cramped conditions in over-stocked stores. The Foodary, a newly refurbished Caltex brand that rolls out its fifth store in Horsham this week, emphasises a new sense of style and space, one favoured globally and by other café-style outlets that have already seen a great deal of success at home, such as Urbanista and Jack & Co.

Kate Cahill heads project delivery of the Foodary for Caltex Australia.

Foodary customers at South Yarra location are invited to make use of a Caltex mobile app that allows them to pre-order healthy food for lunch, which means they spend less time browsing the store during the precious minutes of their lunch break: They can literally grab and go.

The feel of the store is light and airy, and certainly conducive to the impression that the food offer allows enough choice for customers to be able to eat healthy day-to-day, all from within a conventional petrol service station.

The outlet is currently awaiting council approval to begin running its in-store partnership with Guzman y Gomez, the up and coming Mexican fast food chain.

By way of stark contract, the Coles outlet in Windsor is designed to make sure customers never forget where they are: COLES. Five foot high illuminated lettering above the entrance to the store provides an ironic accent to the slogan painted above the snack offerings: Big yum at little Coles. Aside from there being very little ‘little’ about Coles, the store maintains the same kind of impression of spaciousness as The Foodary with clever store layout.

Gone are the pallets of firewood and crates of soft drink; service stations now boast clear entrance-ways and a view into the shop.

One of the chief trends we saw repeated throughout the tour was the visual opening up of store frontage. Where service stations were typically stocked out front with BBQ fuel and firewood, crates of soft drink and the like, now we see a clear preference for full glass frontage.

The latest store fronts no longer make use of the frontage for shelving purposes, with both inside and out cleared to make way for the visual appeal of floor to ceiling glass. Although sometimes it does create minor confusion about where the exit of the store may be, the visual effect is quite appealing and contributes the feeling of ‘fresh air’ within a store, which is certainly conducive to the desire to browse and shop beyond the requirements of ‘desperation’.

“It’s destination, not desperation we want,” chuckles Jeff Rogut as I plow, half-starved by mid-morning (my own fault for failing to avail myself of the delightful breakfast menu at The Cullen Hotel), through an undercooked snag-in-a-bag I purchased from the Windsor Coles.

The AACS CEO, a tireless campaigner for good business practices within the P&C sector, is probably the nation’s foremost cheerleader when it comes to the healthy snacking trend, and encouraging our industry to seize upon it.

Although hot pastries is one of my favourite snacking categories, the brightly-coloured tube of pork trimmings wrapped in an oily strip of puff serves only to stem my cravings, no food for the soul.

80c coffee, making Coles a clear and present danger for on-the-run hot beverages.

But more importantly, the prices quoted in the Coles outlet are brutal in their competitiveness – 80c fresh coffee, at the touch of a button from sophisticated-looking touchscreen panel.

Not being a coffee-drinker, I couldn’t comment on the quality, but I heard no complaints from those seeking their fix.

On the face of it, pricing coffee below $1 seems a tad unscrupulous, especially towards smaller operators that work very hard to achieve good prices and quality for their own customers. But nursing the competition is not the name of the game in convenience retail, and an ongoing fresh coffee price war will only serve to please customers, and stimulate innovation in the more expensive coffee offers at other stores.

The architect of the AACS Study Tour, Mr Rogut said that convenience store operators were seeing the changing needs of consumers, and innovating their offers accordingly.

“This includes design to make shopping easier, particular around the food and beverage segments,” he said.

From Windsor, we continued our tour to the much maligned, yet highly progressive town of Geelong, home of the extremely impressive APCO IGA Express service station. This blend of grocery with P&C certainly seemed to be a favourite with tour group.

With everything from traditional lunchtime café fare like pizzas and bain marie pasta, through to fresh vegetables and microwavable dinners, this store had it all. Café and grocery are divided into two distinct sections, centered around a POS hub, although a second POS was located within the café to better manage food customers who did not have a petrol purchase.

Some very neat touches made this store a crowd-pleaser: Most notably was the example set by their rotisserie chicken display. Rather than display the entire rotisserie (as done at major supermarkets, which allows customers to see the messy loading, unloading and cleaning processes), the IGA Xpress has whittled the mesmerising turn of golden brown chooks down to a small viewing window beside the main counter.

The effect of this is very striking. The framing of the window invites people to come closer and peer inside, and makes an event of the cookery. It feels like the rotisserie is a special museum piece to be viewed and adored. This is an excellent example of taking something perfectly ordinary and well-known to the general public, and turning it into something special that can capture the imagination.

If chickens aren’t really your thing, another innovation in place there is a drive-through for coffee. The benefits speak for themselves in this case, but there are two things worth mentioning…

The IGA Xpress is not afraid of stopping people from coming into the store. In fact, if all you want is a coffee, then they don’t really need you in the shop. You get the convenience of not having to leave your car, and the shop has the convenience of not having a bunch of people cluttering up the walkways waiting for a single cup of coffee.

The industry seems to have a fear of utilising pre-paid petrol technology, a move which would combat drive-off petrol theft. But retailers have got it into their heads that if people don’t have to come into the store, they won’t make impulse purchases. This is true, but perhaps there is more value in this than meets the eye.

Some impulse purchases can have a detrimental effect on customer perception of the store, particularly if the purchase was followed by ‘buyer’s remorse’. “What did I buy that for? I don’t even need it” is a common enough thought for the impulse buyer, especially in the kinds of categories that convenience depends upon. Trusting the customer to come into the store to purchase goods other than petrol, and allowing them the convenience of paying at the pump, is a unique selling point just waiting to be exploited in Australia by a retailer who knows how to be creative with their marketing and promotions.

A new philosophy: If you don’t need to come inside the store, don’t.

The coffee drive-through runs past a series of water tanks against the side of the building, giving the customer the impression that this business is water conscious and uses roof catchment. While the tanks are painted to be as unobtrusive as possible, they do give an impression of water-consciousness, and this will no doubt have a positive effect on customer loyalty among those who value environmental awareness in the businesses they choose to patronise.

“APCO in Geelong offers a terrific combination of an IGA Xpress in-store with very competitive pricing for everyday grocery items, an expanded food and beverage offer as well as a drive through for customers on the go,” Jeff Rogut said.

“This expanded offer is for selected locations and offers additional returns to retailers where they have the available space and store size, but importantly greater convenience for customers not wanting to make stops at multiple stores.”

The APCO IGA Xpress brings the best of three different worlds, grocery, café and P&C, and brings them under one roof. Other businesses seen on the tour were bigger, brighter, and were plastered with their brand, but a quieter dignity to the APCO site made it seem more attractive. Looking at the world-class exterior design of the Foodary, we might be able to see a time when service stations do not need to uphold 20th Century marketing techniques, like using bold, brash colours to hijack the senses. Customers are not what they were: They are media savvy, often trained from early school age to recognise sophisticated marketing ploys. Popular culture encourages ridicule of marketing, and transparent attempts to modify shopper behavior are disdained.

Mr Rogut said the tour was a great success: “We had 52 people from diverse companies – retailers and suppliers – and the feedback received during the two days was incredibly positive.”

“We have said the ‘food is the future’ for our industry and that is very evident in so many of our retailers, all taking differentiated paths, but seemingly ending up at the destination of improved quality food, coffee and services.

“This is not to the exclusion of some of our traditional and core categories, but the focus is around what customers now and in the future will expect.

“If we look at many overseas countries, convenience is all very much heading in a similar direction, tailoring offers though for their local needs.”

Next week C&I Week looks at the Food Innovation Centre at Monash University, and how retailers and manufacturers can get involved in using the latest technology to learn more about shopper behavior, by taking advantage of some unconventional and truly amazing new techniques.

 

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