Media

Welcome to 2017

Happy New Year and on behalf of all of us at AACS we hope that it is a successful one for you.
The year ahead again promises to be an exciting one for our Association and Members.
Some of the AACS events to look forward to this year will be:
• The launch of the AACS State of the Industry Report for 2016
• The new AACS CEO Forum
• The opportunity for Members to enter the AACS Store of the Year competition
• The AACS PJ Convenience Award for our up and coming industry leaders with the prize being joining the AACS Overseas Study Tour for a Retail and Supplier winner
• The AACS Downunder Study Tour in Melbourne following the very successful even in Sydney last year
• The AACS Convenience Leaders Summit together with the C&I Expo in Sydney
• The AACS Overseas Study Tour which will visit Chicago and New York this year
• AACS Women in Convenience events
• New AACS workshops and training opportunities
Much has been written about expected trends that 2017 will bring for retail.
Some of these include:
• Retailers who promote product quality, transparency, & sustainability will flourish
• Stores providing unique in-store experiences will thrive
• Retailers across the board will adopt mobile payment solutions
• Smaller stores are in; larger stores are out.
• Personalization will become increasingly important to consumers.
• Same-day shipping will become more prominent.
• Retailers will continue to invest in omnichannel.
• Retailtainment will pervade the industry
• Specialty stores will be more productive than department stores.
• Retailers will turn to apps, services, and third parties to fulfill the needs of modern shoppers.
• Retail and technology will become even more inseparable
2017 will favor retailers who come up with smart, bold ways to personalize & elevate every aspect of the shopping experience.
• Treat Media as the Store, and the Store as Media
• Customers Will Want to Feel at Home
• Convenience Will Be Key
• More and More Mobile
• Investing in the Organization and Employees
• Brick-and-Mortar Stores Will Get Smarter
• The Rise of Cognitive Commerce
• Look Out for Niche Retailers
• Retailers Will Enhance Personalization
• Expect a Digital Shift, Not Transformation
Sources:
• https://www.vendhq.com/university/retail-trends-and-predictions-2017
• https://www.shopify.com/retail/10-retail-experts-share-their-predictions-for-2017
The Convenience industry is strong and we should continue to have confidence in our industry however we need to be aware of a number of trends and issues now and into the future:
Food is the future: there is no doubt that the growth of quality food and beverage offers will continue in our industry. Healthier choices and wider selections for customers looking for something for now, for today and for later in the week need to be considered.
Value: increasingly with the very aggressive activity by major competitors there will continue to be a focus on price and importantly value. This is an equally important issue for retailers and suppliers to our industry. There will be discontent within retailers as a result of stores having to support supermarkets as a de facto wholesaler, where prices are typically far less than they would have to pay when buying through ‘traditional’ supplier channels. This presents a number of issues:
¥ Prices for products on special are significantly cheaper than manufacturer wholesale prices
¥ Stores are not counting the time taken to collect stock, pay cash etc
¥ Suppliers may lose sight of the value of the convenience channel as volumes shift to supermarkets and the channel is ‘devalued’ and not truly measures or accounted for based on purchase volumes
¥ Manufacturers are supporting supermarkets with rebates etc who are selling to other businesses rather than consumers
These issues will need to be addressed as the competitive set will only increase as retail conditions tighten and major retailers look to consolidate or take market share.
From a convenience aspect our industry must look at how we continue to provide great value to customers, particularly on known value items or else the perception of being expensive across the store will continue. This is also true for some convenience categories eg groceries in some cases, where sales volumes are low, yet prices are more than double that found in other stores. Retailers can price at whatever prices they choose, but they should be conscious of competitive conditions and in some cases pricing items so that they are ‘at risk of being sold’ may be a better strategy that having very low sales at high prices and perceived margins and perpetuating the perception of the convenience industry being very expensive.
Consolidation plus development: with the announcement of Woolies selling its petrol division to BP there will undoubtedly be greater focus on our channel. The ACCC is yet to approve the deal and it may be that some stores are sold off to gain regulatory approval – time will tell as this is a complex deal. BP has partnerships with other food retailers overseas, most notably with Marks & Spencer in the UK, where BP operates the M & S “Simply Food’’ stores. As we saw during our 2016 study tour to London the BP / M&S offer was excellent, so can a similar offer be replicated here?
Technology and services: are you thinking about the potential impacts and opportunities of new developments such as electric vehicles, self drive cars, hydrogen powered vehicles, self scanning, self checkouts? High take up of some may be a few years away but as we have seen with other technologies, when costs come down and acceptance rises, dramatic shifts can occur very rapidly. Conventional c-store services such as prepaid phone cards, ATMs etc have made room for newer services that reflect greater retail disruption. Storage lockers, online ordering and product pickups for e-commerce purchases, drive throughs and at-the-pump ordering are now at some c-stores, which will increasingly employ new, unheard-of service platforms to get consumers out of their homes and into stores.
Responsible retailers: is an ongoing need in our industry, whether this is in selling tobacco, lottery or other age restricted products and also ensuring that we are compliant with all regulations which unfortunately seem to be ever increasing despite government spin about reducing red tape and regulations.
Safety and security: of our staff and customers. There are a number of issues negatively affecting our Members and they are to some degree related: petrol theft, robberies with violence targeting tobacco and sales of illicit tobacco by unscrupulous retailers, in markets etc. We have actively been campaigning on the issue of petrol theft since 2012, when even then our position was that if the law is soft on those that drive of without paying for petrol i.e. petrol theft, it will lead to greater crimes being committed against retailers. We are unfortunately now seeing this play out with serious results for honest retailers and their staff. Governments took our approaches lightly and VicPol to some degree paid lip service to the issue – a number of forums were conducted with no real outcomes for retailers. Pre pay was simplistically seen as the answer which it is not, and even if some smaller retailers adopted this supermarket majors i.e. Coles and Woolies openly stated that they would not support it which would then take customers away from independent / other retailers affecting small businesses. The vast majority of customers do the right thing. We would like to see a State, and ideally Victoria; look beyond the ineffective recommendations from the petrol theft inquiry which failed to adopt proposals from retailers, and legislate that stealing petrol in Victoria will be treated as a crime. A strong message needs to be sent.
Operators have upgraded security, trained staff, are working with upgraded reporting systems, have CCTV, have number plate recognition systems in many cases; however there is just no strong deterrent to crims and other opportunists intent on stealing petrol. Police are no doubt frustrated by the lack of judicial support when people are brought before the courts and there are no real deterrents in place. It really is time for change and AACS will continue to vigorously pursue this matter.
If you need any further information, or if AACS can assist you at any time, please feel free to contact me.
All the very best for the year ahead……
Jeff Rogut  
Chief Executive Officer

Australasian Association of Convenience Stores Limited
ACN: 156 638 023
Mobile:    0467 873 789
Office:      03 9807 5552
email:       jeff@aacs.org.au
Website:  www.aacs.org.au

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