Let’s Get Small – the Upsizing of Convenience drives the Downsizing of Retail Store Size
Tom Fender and Toby Desforges both spoke on the global trend towards convenience and proximity retailing. This is a very big, somewhat surprising trend. Projections that super-stores would take over the shopping universe have turned out to be completely wrong. A very funny video from a few years ago dramatized the fear that superstores were on track to gobble up the whole world. Now come to pass is the reality that Hyperstores and SuperStores are actually in decline. The growth is in Convenience (43% increase over last 10 years), Discounters (33% increase), and online (31% increase).
And it’s not the e-commerce channel that is taking the biggest bite of market-share from the Superstores. It’s smaller stores, convenience stores, niche and specialty stores. Is Lottery penetrating this segment of specialty, branded, and niche stores? Wouldn’t the sell for Lottery be more about driving store traffic as opposed to the commission income? Especially insofar as our time is the most precious thing and in shortest supply, convenience becomes the commodity most valued by the consumer. With that priority in mind, Convenience chains like 7-Eleven offer great value. And stores like Walmart, Tesco, and Whole Foods are downsizing their stores to deliver more convenience and specialty. The increasing diversity of options and consumer choice creates opportunity for marketers to provide innovative solutions for the new retail trade styles. Lottery should fine-tune and tailor its value proposition to meet the needs of these new trade-styles.
The pressure on big-box stores is also coming from the online world. Hundreds of new e-commerce multi-channel and multi-brand e-retailer platforms are emerging to create a highly diverse and fragmented market-place of consumer options. There are the Online Market-places, Brand stores like H&M and Ikea, Online shopping portals like Amazon, Subscription websites, and Niche specialists. It is much less likely than it may have appeared a few years ago that a Walmart or Amazon or Tesco will increase market share to the point of dominance. The market-place of consumer options will continue to grow but it will diversify, further dividing share between more and more channels and options.
Big box superstores are in decline. The question is … How might Lottery define and capitalize on its role in this retail environment that is shifting back to Lottery’s traditional wheelhouse of convenience stores, small neighborhood stores, niche and brand and specialty stores? For one thing, Lottery needs to see itself as a category. Presently, Lottery is often folded into broader product/service groups. We need to enlist a higher level of engagement from our retailers, motivate them to analyze and assess the profitability of Lottery as a stand-alone category.
The founder of Alibaba, Jack Ma, started the consumer-facing Taobao as a market-place platform that enables small retailers to sell services and products online. Struggling to carve out a role for itself in the Chinese consumer market, Taobao launched Tmall.com as a platform for online brand-building, providing a platform for large brands to build their brand. It was widely believed that the logistical challenges of selling online in China would make it impossible for this model to succeed. They needed to think of something different, something dramatic to get attention. So, Taobao invented its own special day for a big sale. Think “Black Friday” and “Cyber Sunday”. They created “Singles Days – November 11” that enabled them to sell $15 billion. That is more than all retailers in the U.S. sold on Black Friday and Cyber Monday combined. DesForges points out that Taobao invented this “Singles Days” with nothing like the massive retailer footprint and brand awareness that Lottery has. How might Lottery leverage its incredible brand and distributional assets to better advantage and create its own marketing/promotional event?
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- Gutenberg a inventé l’imprimerie à une époque où 93 % des gens ne savaient pas lire. Et le manque de librairies signifiait qu’il n’y avait pas de distribution !
- Edison a inventé l’ampoule électrique alors qu’il n’y avait aucun moyen de fournir l’électricité aux points de consommation.
- Karl Benz a inventé l’automobile alors que conduire était illégal.
- Elon Musk s’est entendu dire qu’il était inutile de produire des voitures électriques en masse car il n’existait pas de réseau de bornes pour recharger les batteries.
- Cuando Gutenberg inventó la imprenta, un 93 % de la población no sabía leer. Y ¡no había librerías, así que tampoco habría distribución!
- Cuando Edison inventó la bombilla incandescente, no había forma de proporcionar electricidad a los puntos de consumo
- Cuando Karl Benz inventó el automóvil, conducir era ilegal
- A Elon Musk le dijeron que no tenía sentido producir en masa un vehículo eléctrico, porque no había redes de alimentación para cargar las baterías
- Gutenberg erfand den Buchdruck, als 93 % der Menschen nicht lesen konnten. Und keine Buchhandlungen bedeutete, dass es keine Vertriebsmöglichkeit gab!
- Edison erfand die elektrische Glühlampe, als es keine Möglichkeit gab, Strom an die Verbraucher zu liefern
- Karl Benz erfand das Automobil, als fahren noch verboten war
- Elon Musk wurde gesagt, dass es sinnlos ist, ein Elektroauto in Serienfertigung herzustellen, da es kein Netzwerk zum Laden der Batterie gibt
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