This week a colleague and I were walking through stores in Melbourne’s CBD when we stumbled upon a shiny new – refurbished – 7-Eleven store. We were welcomed with a wide store opening and long red colour fields like a red carpet taking us into store. Two smiling retailers stood behind a big shiny Lavazza espresso machine and a fresh array of baked products were on display in front of a new turbo oven (the fast one that warms food without making it soggy).
The third retailer was standing behind the checkout, deep inside the store. His only role was to look after our needs for quick service for convenience items, without a wait for fresh coffee or hot food.
The new store was far less cluttered than old format stores, with almost all the chilled space and shelving wrapped around the store walls and only one or two movable island displays within. At a guess, the range of stock would have been about half that of a ‘normal’ 7-Eleven, but there was no less range of categories – we could still buy all the convenience items our metro lives require: milk, break, papers, magazines, dairy, noodles, spreads, paracetamol and deodorant, just with fewer brand choices. Where in the past we would have found two or three brands for each category, there was one or two at most.
The effect was a much more spacious appearance, a simpler choice for shoppers and, again guessing, a higher inventory turn. But while lowering the number of items on display, the store also increased the staffing levels. Staffing means service, so the level of service was increased by offering two staff to prepare fresh coffee and fresh food. That’s a steep and positive change for a convenience store shopper.
These staff were dedicated to serving us high-value fresh coffee and fresh food. So, category creep too has come to the convenience store.
One of the key things about category creep in grocery and pharmacy stores around the world is to save the shopper time and money by allowing them to buy more things from their shopping list in the one store. It encourages shoppers to think: “If I don’t have to drive any further, I will buy it here and save my time and the cost of petrol.”
Well, in the CBD, if you allow me to walk into a convenience store and buy something else that was on my list, you just save me walking time and sore feet. If I drove there, you saved me driving time, parking time and parking fees. If a store can do that, I’ll pay 50c more for a coffee and $1 more for something to eat. And I’ll keep coming back, as long as it’s on the way to wherever I go most frequently.
We believe that while this store was a franchised store, 7-Eleven head office had worked with the franchisee to test the model. Not sure how it will perform, but we will be back to talk to the guys over the coming weeks and observe its trading trends. We’ll probably get a coffee there too.
In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.
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