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Same-day delivery. Online ordering. How is our need for convenience changing the retail sector?

Same-day delivery. Online ordering. How is our need for convenience changing the retail sector?

24 Jul 2017

Ben Rookes, Corporate Finance Partner at Cooper Parry, looks at consumer trend of the necessity for convenience.

Convenience is not a new concept in the retail industry. Local corner shops, take-away restaurants and even milkmen, for example, were the original pioneers of ‘convenience retailing’.  But where once the Friday night fish and chip run meant a walk or drive to the local ‘chippie’, today technology is not only making the delivery process easier, it is opening up a new world of culinary purchasing possibilities.

Convenience Revolution

Take companies like Deliveroo and UberEats. They are revolutionising the convenience and fast-food market.

Thanks to them, and other similar services, consumers can now order and have food delivered to them in the comfort of their own home from not only local take-aways but also their favourite High Street and independent restaurants.

Just Eat is another key player benefitting from the rising demand for convenience, having recently reported increases in revenue and pre-tax profits for the year to 31 December 2016 of 52 per cent and 164 per cent respectively.

As part of the company’s expansion strategy, Just East has acquired companies in Italy, Spain, Mexico and Canada, and their CEO, David Buttress, sees further growth opportunities in “relatively under-penetrated markets”.

Delivery networks are key

Sainsbury’s CEO Mike Coupe has convenience for the customer at the forefront of their digital strategy too, believing the customer should be served “whenever and wherever they want”.  

This was a key driver behind Sainsbury’s acquisition of Argos, which was particularly attractive due to Argos’ sophisticated delivery network and platforms, allowing for same-day delivery.

The Amazon Effect

Amazon has been at the forefront of providing a fast, efficient and convenient service for its customers for many years, and is continuing to introduce innovative ways of improving the customer experience. 

In addition to Amazon Prime’s next day delivery and Amazon lockers in convenient locations, the opening of a store with no checkout in Seattle this year is an incredible step for the utilisation of technology in the consumer buying process.

The ‘Amazon Go’ store allows customers to buy their goods and not have to wait in long queues to pay. Consumers scan their smartphone to gain entry to the store, with pressure sensors sensing when items have been picked up and cameras ensuring the correct customer is charged. Payment is then taken from the customer’s Amazon account automatically as they leave the store.

Future solutions and opportunities

In the future, we may even see the use of digital price tags, whereby the shelf will display the price digitally, which can then be altered depending on the time. For example, just before closing prices may be lower to get rid of perishable stock, or prices may be increased during lunchtime or 6-7pm to catch “convenience” buyers after work.

Convenience is a clear key driver for consumers and is a vital selling point for retailers. Developments from the likes of Amazon could foster creative solutions for a more engaging buying experience that will maximise returns for those who can deliver them effectively.

This blog was from Consumer Trends, a quarterly publication produced by Cooper Parry Corporate Finance, to provide you with our take on a select range of consumer trends.

To read the full report click here

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