IGD Digital Commerce 2018 conference: Six points for convenience stores

Big brands, huge retailers and a tonne of industry experts gathered in London yesterday at the IGD’s Digital Commerce conference to discuss the future of retailing – both online and off. Tom Gockelen-Kozlowski takes you through some of the key points 

Shoppers are going to be harder to please than you can possibly imagine

Ghislaine Prins-Evers, head of digital transformation at Heineken, puts it bluntly: “Shoppers are going to want you to be as clever as Google, as easy as Facebook, as quick as Twitter, as informative as Wikipedia, as visual as Instagram, as personal as Amazon and as entertaining as YouTube.” That’s where our expectations of online services are these days. But that doesn’t mean small businesses have to do any of this alone…

Brands will help independent retailers into the 2020s

Retail tech firms including CheckoutSmart and Adimo were showcasing their systems to some of the biggest core grocery brands in the country. While Tesco and Asda are working hard to be digital innovators, it’s obvious that when it comes to how traditional and online retailing will combine, big brands are the ones getting there first in the UK and – in many cases – it will be these brands who bring the technology directly into convenience stores through in-store activations. And when I say big brands I mean the likes of PepsiCo, Kellogg’s and Diageo, who are all involved.

The balance between convenient tech-based retailing and shrinkage is a discussion we haven’t had yet.

Companies who are developing ways for shoppers to buy products using their smartphones proudly talk of shrinkage levels being 5% or lower but for a ‘pennies business’ like convenience retailing, losing 5% of sales could wipe out a business’s profits.In trials, when customers have been able to purchase high-value items like spirits without join to the till the sell-through rate has been just 84%.It’s inevitable that this will be a big debate for small business in the world of ‘frictionless’ retail.

The numbers send a powerful message

Most independent retailers want to know how they can benefit from the growth of online retailing – it’s part of the reason Mo Razzaq’s presentation at the LSS went down so well. But many of the stats on show at the IGD will have motivated store owners even further. For example, Walmart research shows that a customer who buys both online and in-store with a retailer is likely to spend twice as much as those who only buy in-store.

Could retailers become the next Lunn Poly?

At one time the biggest names on the High Street, travel agent Lunn Poly ceased trading in 2005 – an early victim of shoppers’ move online. Ghislaine Prins-Evers, head of digital transformation at Heineken told delegates that she believed that we were on the “tipping point” of seeing grocery shopping repeat the almost total move online that the travel sector first made. Online grocery shopping has hit the all-important £1bn mark, she added.

There is a real struggle on to make online retailing comprehensible

Online shopping only works if it’s easy and convenient for shoppers and if staff and store managers (and, yes, independent retailers too) can understand what the boffins are telling them to do. Many speakers made this point and yet there were more than a few moments when people (not naming names) said things like this: “We call it invisible shopping because the content that surrounds you becomes shoppable”. More work needed, I think.