The oils channel in New Zealand is challenged today and for future growth. Petrol drives traffic to stores where retailers work increasingly hard to convert shoppers to purchase in-store. How can the channel capture the ever-increasing need of convenience that shoppers want in their busy lives?
The channel must address 3 key issues facing it.
1. Driving Shopper Satisfaction
Hot Coffee and functional beverages are categories driving overall satisfaction for oils retailers. Traditional convenience categories such as Hot Food, Bread, Newspapers and Magazines however are drawing the channel down on shopper satisfaction, largely through poor availability whilst other channels improve e.g. supermarkets. Loyalty whilst increasing is low overall in the oils channel relative to supermarkets.
2. Promotional efficiency
Three chocolate bars for $5? Who can resist? Promotional volume fatigue is starting to set in the market. The offers are less encouraging on multi-buys compared to 2016. Single price points, different pack formats and cross promotional deals can work better to deliver shopper solutions to balance volume through price e.g. permissible treat/snacking, breakfast solution, lunch meal deal.
3. Differentiation through New and Premium
Shoppers are willing to buy extra if it’s linked to innovation. The channel is challenged by new categories and having a point of difference. Calling “New” out in-store is key to engage shoppers to buy incremental items.
Premium quality options still an area that can be driven further as shoppers don’t see the difference on premium products and why they should pay more. Shoppers are looking to foodservice categories such as Hot Food, Sandwiches/Wraps and Bakery Snacks for better quality options where they are willing to pay more.
The Oils channel in New Zealand has a strong opportunity to deliver to convenience. The channel requires investment from retailers and suppliers to draw in shoppers and drive missions outside of fuel. The channel must deliver to core convenience as well as find a point of difference.