Irish Convenience Shopper Trends Going for Growth in Convenience 19th September 2018 1 PRESENTATION FLOW General Shopper Trends Survey Introduction – What we did and how we did it Frequency and Value of Spend Purpose and Type of Shopping Trip Convenience Channel Product Needs Convenience Store Service Needs Preferred In-Store Promotion Mechanics Preferred Food and Drink Concession Outlets Key Convenience Shopper Segments Unlocking the Segments to Maximise Growth 2 Confidential2 The Irish Shopper – Some General Trends 3 Consumer confidence in the economy for the year ahead has cooled but 2018 levels remain relatively consistent overall Base: All Adults 16+ July ’18 % Better off 41 Dubliners continue to Dublin: be most confident +31% about the country’s economic future – but the gap is closing. The same 46 Outside Dublin: +26% Worse off 13 *Net Diff (GAP) +27% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Feb 18 May 18 July 18 Gap = -15% -59% -68% -49% -58% -52% -32% +3% +15% +18% +26% +28% +30% +27% Q.2 And what about the coming year, do you think that the country will be better off, worse off or about the same as this year? 4 Annual employment and live register levels are positive The Live Register Unemployment in Ireland Rate of unemployment -15.1% % 20 -1.5% 14.6 14.7 Overall Change 15 12.0 13.6 11.5 9.6 vs. June 2017 10 7.3 6.5 Vs June 5 2017 0 10 11 12 13 14 15 16 17 101,084 126,981 5.1% Current Rate of unemployment -12.9% -16.8% (vs. 6.6% in June 2017) vs. June 2017 vs. June 2017 Source: www.CSO.ie/Persons on live register Source: www.CSO.ie/Quarterly National Household survey * Live Register Total data 5 YOY trends positive across the board Clothing, Non-specialised Books, Department Pharma & footwear & stores (super- Household newspapers, cosmetics textiles Stores markets) Food sales Bar equipment stationary Fuel Up 7.6% Up 5.7% Up 8.2% Up 5.7% Up 2.1% Up 2.2% Up 13.7% Up 2.5% Up 0.4% Up 6.0% Up 1.8% Up 4.0% Up 4.7% Up 5.5% Up 4.9% Up 8.2% Up 3.4% Up 3.7% Source: CSO, Central Bank, European Commission volume value 6 Purchasing Goods and Services – Consumer attitudes towards perceived spending continues to be cautious however Base: All Adults 16+ July ’18 % More 16 Attitudes towards Dublin: future spending The same +4% 72 are consistent both in and Outside outside Dublin: Dublin. +3% Less 13 *Net Diff (GAP) +3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Feb 18 May 18 July 18 Gap +7% +5% -29% -63% -47% -52% -45% -37% -19% -13% -4% = +1% +3% +3% Q.7 In the year ahead, do you expect to purchase more, less or the same amount of goods and services as in the past year? 7 Consumer Confidence Key Take-Outs • Irish economic activity is currently strong – and consumers remain reasonably confident that this will be the case over the coming year, even when Brexit, Trump Trade wars, etc. are taken into account. • Employment levels have almost reached ‘full employment’ status, and the fact is that consumer spending has been increasing year-on-year across all types of goods – including food and grocery. • Notwithstanding all of this positivity, the consumers view of their own personal financial well being remains shakey. Many people complain that they have yet to see the benefits of this economic recovery, with almost as many consumers (13%) indicating that they are likely to spend less next year as are likely to spend more (16%). • As a result, many consumers are still very much watching the pennies and will need to continue to derive value for money offers from their local convenience stores. 8 The vast majority of us now have a smart phone % 100 90 86 Equates to 79 80 2,815,000 70 70 64 users 60 53 Claimed 50 smartphone 39 ownership 40 continues to grow 30 Smartphone Ownership Smartphone 20 10 0 Jul-12 Aug-13 Aug-14 Aug-15 Jan-17 Feb-18 Pre-January 2017 comparable data from eir Connected Living Survey 2015 Base: All with mobile - 881 Q. Which of the following devices do you currently use? Source: B&A TechScape, 2017 9 80% of the population now access the internet once a day or more often (almost all under 35s are now online at least once a day) Source: B&A TechScape, 2017 10 What we are doing online Purchase goods or services online Turned on heating or other 57% household devices remotely via Share posts, videos, photos etc. an app 14% 47% online Check work emails when Search for free Wi-Fi when in on holidays 24% 42% cafés, bars, or other outlets/places Check in your location 26% when on social media 40% Post content online Check social media or emails when having difficulty 30% 38% Research products on your sleeping mobile phone when in a store 33% 33% Follow brands on social media Connect your tablet, laptop or mobile phone to your TV to play programmes, Base: all Adults 16+ - 1,000 videos or music. The under 50s, ABC1s and Dubliners are the most active online. Q. Which, if any of the following do you do nowadays? Source: B&A TechScape, 2017 11 A dysfunctional relationship LOVE HATE ▪ Personalised and ▪ Urgent and immediate intimate. ▪ Need to keep in ▪ My moments, my touch. memories, my ▪ Dependency friends. ▪ Separation anxiety? ▪ Augments and guides every moment ▪ Administers, stimulates…determines? Deeper relationship Clear sign of growing than any other concern and antipathy technology especially amongst under 30s 12 “ It’s an addiction, I fully despise the thing. If I could just put it in the bin, but it’s so bad that when you put it “ away, you turn it off then you have to take it out again. 13 Online fatigue emerging? Yes % The last thing I do at night is 54 check emails, text messages or 42 social media sites The first thing I do in the morning 51 is check emails, text messages, or social media sites 37 38 I can’t imagine my life without social media 33 Jan-17 Feb-18 Base: All use social media sites - 734 Decline in those checking social media last thing at night and first thing in the morning. Q. Here are some other things people have said about social media. Do you agree with these statements? Source: B&A TechScape, 2017 14 Consumer Technology – Key Take Outs • As we know, the vast majority of Irish Consumers are now enabled with a smart phone, a device which in and of itself has driven daily + internet usage to more than 80% of the population. • With the smart phone in particular now an extension of our limbs, we need to provide consumers with an increasingly digitised array of in-store features, from digital payment methods to free wifi and even perhaps digitally interactive in-store promotions and merchandising. • Note, however, that something of a Love-Hate relationship with our smartphone is growing, particularly so amongst the under 30s. 15 Consumer Technology – Key Take Outs • The extent to which the consumer being ‘always switched on’ can generate a sense of anxiety and antipathy for some consumers, with some evidence that this generation’s use of digital channels beginning to dip in its intensity. • As such, any new digital convenience channel initiatives need to meet clear and real consumer needs, and avoid the risk of alienating the consumer by way of constant digital bombardment. 16 Established consumer food tribes Foodies Ingredient checkers Balancers Within this context, the type of food we ● Wish to signal ● Seek out latest thinking ● Pragmatic food decisions eat, and indeed sophistication and alertness on food. about what works and is to cultural capital of food. generally healthy. how we source ● Suspicious of commercial and even ● ● Quick to point to need for Seek authenticity, and drivers in food industry. prepare it, has exotic novelty. ‘cheat days’. ● Health food store key. become for ● Seek out new information. ● Often express exasperation at volume of many people a ● Embrace sensory overload ● Clean diet/Paleo. contradictory information reflection of the and indulgence. ● Online/Netflix exposé on on nutrition. type of person food industry. ● Upmarket reality TV (Bake ● Recall of food pyramid we are – from Off et al). ● Mainstream media. those who strive consistent health and nutrition benefits, to those seeking a sense of authenticity and sophistication, to everything in between. 17 Emerging consumer food tribes Protein boys Good sweat ● Pride in body ● Less trust in any beautiful. processing (yoghurt, pasta sauce). ● Whey protein, etc. ● Everything from ● Monitor diet closely. scratch must be better! New vegans Sensitive souls ● Reject modern ● Food intolerance has consumerism. become a default suspect when bloated. ● Suspect big brands. ● Resulting in ● Lifestyle and experimenting with environment not just no exclusions (gluten, meat. dairy, meat). We also see new consumer food tribes emerging. For example, our young, male body beautiful advocates, through to sensitive souls experimenting more and more with free-from options. 18 Consumer Health and Food - Key Take-Outs • We are clearly in the midst of something of a consumer revolution in relation to health and lifestyle trends. • B&A’s annual Sign of the Times study has identified a number of existing, and emerging consumer food tribes, whose needs and requirements are quite different to each other. • With so many of these consumers regularly shopping at their local convenience store, it makes sense that as many of these food-related needs are met by the channel as possible, whether that be clear labelling on food provenance, a range of craft products, through to the availability of ‘free-from’ options.