Cliona Lynch, retail analyst with Verdict, present in Amsterdam for the 27th editions of the International Fair of Private Labels, made an interesting briefing about the new store format and the ascent of the proximity shops in the Western European countries.
The recent years recorded an increase of the proximity shops segment all over Europe. Their share almost doubled compared with 2009, reaching 5.09 % of the entire retail market towards the end of 2011. Behind this evolution there was a young consumer with new consumption habits. The review of Verdict, made in the Great Britain, France, the Netherlands, Germany, Italy, Spain and Russia indicate a consumer of average age of 25 at the level of each of these countries. For the small and the proximity shops, attraction of such clients represents a challenge in both commercial strategies and in marketing.
Young people, the main clients of the proximity shops
Considering age categories, the young consumers of 18-34 years old represent at European level more than 67.4% of the total number of the clients of proximity shops. Their large majority is within categories 22-24 years of age 23.8% and 25-34 years of age 24.2%. As they age, the number of consumers choosing proximity shops is decreasing. So, for the floor 35-49 years of age, the clients of proximity shops represent 17.8% only, while for the age of over 65, their number is decreasing up to 3.1%.
The majority share recorded by the young consumers, open to use of the smartphones for shopping, led to opening of virtual stores, placed on the South Korean model of Tesco, in railway and metro stations. The recently launched Delhaize cube was preceded in England by people of Ocado, whose panels with products are covering the metro stations in London metropolis. A simple code scanning and the order is sent towards the nearest store or delivery point pending options.
Expansion of the small networks of stores based on acquisitions
England's retail market, dominated by giants like Tesco, Asda or Sainsbury' witness profound changes at the level of independent merchants and their number is diminishing year by year. A known scenario we might say given the similar mutations on the Romanian market. The difference is that in England the small shops do not disappear entirely nor do they transform in banks, pharmacies or gage points. The small English merchants understood that their survival on a market with powerful mutations can occur by association. Slowly, such small shops either created independent groups, or were absorbed by similar networks. The acquisitions made at European level by Reitan Group and Valora are eloquent. It is a trend found in several cases on the Romanian market, when small local networks were bought by bigger networks. Prodas in Bucharest, Uni'all in Constanta or Alcomsib in Sibiu are just three examples of local networks bought and integrated in bigger networks.
The fresh products are in top of the consumers' preference
The criterions of having more and more consumers preferring proximity shops are based on change in consuming habits. People are more attentive to their personal budget. The strictly needed is bought, in shorts and frequent visits, with no transport costs or time lost in distant goings. These are criterions which, upwards the retailers have determined radical changes in the assortments of the proximity shops. Their base which is the fresh products section represents the main attraction point. Own bakery with hot products at any hour, are more and more frequent in the small shops in the neighborhood. It is a model taken over by us too, and implemented even in some discounter type stores.
For other categories of fresh food, the supply has to be more often in view of the lack of storage room. M local, a network of small shops developed in England by Morrisons, is grouping 6-8 such units in the covering area of a large store. It put at their disposal not only its storage room but also the processing units, working like a hub, which supplies periodically the small shops subordinated with fresh products of strictly necessary quantity. It is an efficient and working model we might say, for which we surprisingly have an example working for years in Romania within Billa network. The small units in Bucharest like the shop in the arrival terminal of the international airport Henri Coanda, are rhythmic served with fresh products prepared by the large stores in Bucharest. In this case the supply of meat products, bakery, vegetables and fruits is made through Billa Vacarescu store.
Click & collect, or the ascent of the online orders
During a Verdict survey, Cliona Lynch tried to find out the consumers' reply to the question: "what would determine me to buy online".
The replies are divided and reflect the today consumers' decision. The large majority of the respondents (25.1%) appreciate the low delivery taxes; 23.2% prefer the flexibility, whilst 16.2% consider time of delivery as essential. Some other remarks were made regarding lack of returning costs of the products (15.1%); delivery of the order to a shop in the home or office neighborhood (12.7%); tracking online of the order (11.3%); or various aspects connected strictly with the delivery of the products.
Suggestively called "click & collect", the system of internet order followed by taking over of the products in various points or chosen stores, starts to gain ground with the consumers. The advantages to the present systems - home delivery and drive in - are obvious. So, in case of click &collect, the delivery taxes or the fuel costs are totally disappearing. Moreover, the client himself can choose the store where he can take over his order, either on his way home or to his job. But what is more important to many consumers is the total lack of a minimum inducement. Practically, through click & collect you can order anytime the needed quantity of any product.
Florin Frasineanu
