Changing the world for better... at least the world of gas stations)

Метка: private label

And you don’t need to go far. Why do customers more often choose “convenience stores”?

These days people are buying at discounters and convenience stores rather than in large format hypermarkets. Nielsen analysts have also mentioned these noticeable changes in the trading formats. 

There is an obvious fact that the market is being changed and the largest Russian retailers are not an exception. The retailers are rapidly reformatting retail shops.

X5 Group announces that the hypermarket market in Russia will be reduced by 0.3 trillion rubles, but the convenience store segment will be grown by 1.5 trillion rubles. Regarding this trend, the retailer has abandoned the Karusel hypermarkets and opened the Pyaterochka convenience store. The Lenta retailer and the Utkonos online retailer have also announced their intention to develop the convenience store segment. 

What’s going on? I propose to consistently find out the reasons for the changes. 

The convenience store is a format that has gotten an increased interest from consumers around the world for a few years. The Russian market is not an exception and the local shops where people can find almost anything they need has become more popular especially during a period of pandemics and restrictions. The main advantage of the convenience store is proximity. Buyers do not want to waste time and money to reach distant hypermarkets and prefer to visit the shops 10-15 minutes away from home. Retailers understand these needs and make changes according to a new trend. 

New compact formats implementation

Large retailers have begun to actively implement the new formats. What are the reasons for these business decisions? I definitely can announce a complex of factors. 

1. Decreasing hypermarket traffic;

2. Pandemic restrictions and the need to shop in the stores with a few visitors.

Bright trends of consumer behavior have been formed and taken by large retail chains. 

1. Rare store visiting and buying for future use

As I have already mentioned above, the pandemic has affected store visiting. 

People do not want to visit large stores where hundreds of customers are in line and choose local stores next to their homes. These days they do not go to the stores often, but make purchases for future use. Retailers are talking about a decrease in-store visits and an increase of the average check by 20%. During the pandemic, groceries, meat delicacies, household chemicals, and cosmetics sales have been increased significantly.

2. Discounts hunt

Consumers tend to save money and look for promotional products. Every second shop visitor check contains discount goods. As a result, we get an increase in private-label goods and promotional goods sales.

3. Cooking at home 

Remote work, pandemic restrictions, and income decrease affect the habits of Russian consumers. People buy stock products more often as well as they cook at home.

 In addition to cooking, people also make cosmetic procedures, do sports at home. As a result of these changes, there is a trend of increased demand for private labels in such categories as grocery, confectionery, dairy products, and household chemicals. 

The retail sphere is being changed as well as the customers

The “poor health” of hypermarkets and changing consumer habits make Russian retail reformat. Retailers are reducing their shop space and opening city-format stores — with an area of ​​less than 5 thousand square meters. 

Convenience stores, discounters, retail outlets are perhaps the fastest-growing format in 2021. The Magnit retail chain plans to open 1–1.5 thousand “convenience stores” annually until 2025. «Lenta» retail chain has launched the first «Mini Lenta» store and as the future business strategy wants to launch small area shops equipped with built-in trade equipment, coffee machines, a grill area, and vending machines.

I am sure that the current trend will be popular. And I mean not only the local retail stores, which are usually located on the first floors of residential buildings but also gas station shops. 

The technological base they are built on gradually turns them into modern complexes of various services and makes them attractive for thousands of consumers. 

You can always rely on the experts when there is a need to launch a successful roadside shop and develop small-format stores.

For many years the Rainblade company has been implementing technological solutions that are efficient to reach high business performance especially in shops with limited space and traffic, and we also know how to make this business meet the latest modern trends.

Private label goods — a trend in demand by gas stations chains

How we started to work with the products under the brand name of our private label, how we were developing this direction and what conclusions we’ve drawn. >>

This material includes, perhaps, a one fifth part of the story, so the full version is available to read in the blog.

We’re thanking the magazine «Trick of the trade», which gave the opportunity to speak out on the important subject for us. Because the private label goods for hypermarkets and private label goods at the gas stations require a different technology to be applied, pursue different goals and objectives, have different pricing and so on and so forth. We’ve said it and we will repeat it for 100-500 times. Those who have already realized this, please, do not be offended.

In terms of shopping malls business, RusHOLTS is now among the five largest suppliers of automotive products for the relevant departments of the federal hypermarket chains. We started off developing our business in the 90s by supplying chemicals and auto cosmetics. In the Russian market we were the official representatives of world’s two huge brands — Holts and Redex. At that time in our country there was no hypermarket chains and gas stations chains have only been planned to start manage its shops on a unified and centralized basis. Then there was 1998 defaulted payments crisis.

The people stopped buying expensive imported car cosmetics, but no one refused from the use of the cars and their quantity only grew. Then we decided to create our own full-scale range of chemicals and auto cosmetics from fluids and fuel additives to polishes and air fresheners. So that niche of autochemistry saw import substitution by Russian-made goods as early as in 1998. Many well-known brands in this direction became the history since that time. Products created by us were unified under the umbrella brand EXPERT.

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