The obvious answer to this question is that both are important, but answers to questions like this are rarely so obvious.
When people who work in the convenience store industry are asked about the key factors that drive their business and cause customers to shop at their store rather than somewhere else, the answer “convenience” or “location” is usually one of their first responses. In fact, we all know the old adage about the 3 most important factors in the success of a convenience store: “location, location, location.”
At the same time “value” and its association with reasonable prices, is not a word that is normally associated with the convenience store business.
Value is however the combination of qualities that today is most associated with successful retail ventures. One only has to look at the success of retailers like Wal-Mart, Price Club, Winners, Old Navy, and Tim Hortons to know that value or the perception of value is a key component of retailing success. Retailers who do not provide value will not survive long-term in today’s competitive retailing environment with increasingly demanding consumers.
For our business, the reality is that convenience and value are tightly linked where convenience is more than just location, “value” is more than just price, and making the best use of precious time is a consumer imperative.
What are the key factors for success in the convenience business and how they relate to both value and convenience for your customers?
Location / Access: Location is obviously the key convenience success factor and for your customers your location must be close to where they live, where they work, or on their normal route to and from home or work. In addition, your location, to be really convenient, must have easy access and egress, and convenient parking spaces for customers who only want to shop in your store and to get in and out quickly. The right location provides both convenience and value.
Speed of Service: In an environment where your consumers are always pressed for time, convenience and value are both provided when your store is easy to shop, where your customers can easily locate what they what to buy, and they can get fast, efficient and friendly service.
Assortments / Availability: For most product categories consumers have their favourite brand names, flavours, or sizes that they want to purchase and that they expect a “good” convenience store to carry. (Good brands carry with them images of quality, lifestyle, etc.) For some products, like cigarettes, consumers are extremely loyal to their brand and package size, and for other products like chocolate bars they may have several brands that they alternatively use. In any case, to provide convenience and value you must not only carry these best selling brand name products but you must be in-stock at all times. Inconsistency in your in-stock position is as damaging as not carrying the products at all.
Price: Price is a key component of value, but “value for money spent” is probably a more important consideration. Generally, most research on consumer attitudes on the convenience business has shown that consumers expect to spend a little more when they purchase products in a convenience store, and for the most part they don’t mind. They can justify a small convenience premium because it is close, convenient, they are saving precious time, and if the store is clean, friendly and has the products they want. If however they feel that they are being “gouged” by high prices then they are turned off and value disappears.
Environment: Increasingly today the store environment plays an important role in the consumer’s perception of value, as more and more up-dated and modern convenience stores appear in the marketplace. If the store is clean, bright, uncluttered and easy to shop, the staff appears friendly and interested, and the store offers a wider range of convenience products and services, the consumer is more willing to patronize it more frequently. If however, the store is old, tired, dirty, cluttered, etc., the store will probably only be used for “emergency purchases”.
Success in this business comes from providing your customers with both convenience and value. One without the other is not enough.