Martin Newman, Non-Executive Director, Conviviality Retail plc

Conviviality Retail plc owns the UK’s largest franchised off-licence and convenience chain with around 600 franchisee-operated stores. Europe Real Estate caught up with Non-Executive Director, Martin Newman at the World Retail Congress. In an exclusive interview, he talked about the new franchise concept BB’s Warehouse, the challenges and opportunities of the UK retail market, and made predictions about upcoming trends.

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How has the retail market evolved in the last ten years in your view? In 2006 there were no smartphones, 2007 was the advent of the iphone and that fundamentally changed everything. Obviously the birth of the web in the mid-90s had a significant impact, and led to a shift in power transfer away from the retailer, back to the consumer, as the consumer has so much choice now at the click of a mouse. I also think the way people shop is fundamentally different and in addition, they are working longer hours. Consumers are shopping little and often-their propensity to shop has increased, but they are not buying as many things at one time. Convenience therefore, is really the key to driving that experience. Obviously now because of the web we can also see prices, everyone has to be transparent because customers can shop online.
Tell us a little bit more about the new franchise concept BB's Warehouse and what makes it unique? BB's is essentially a trial warehouse concept, which we haven't franchised yet, although we do intend to do so. The customer value proposition is quite simple–the more you buy, the more you save. It goes back to the cash-and-carry model in a way, as it is about bulk buying and making shopping an enjoyable experience. We have great products, great deals, and we create a bit of a buzz, excitement in the store. It is a very different model to the one we have operated previously.
You are mainly operating stores in the UK, what are the challenges and opportunities in the retail industry in the UK compared to other EU countries? The UK is very much known for its excellence in supermarket retailing. I genuinely believe that we lead the way in supermarket retailing. If you look at all of the grocery players in the UK market and the types of customer experience that they offer, they are very often first to market with new developments, even ahead of other sectors like fashion. The UK market is also very competitive. There is obviously a bit of a price war going on, which I am not sure is a sustainable, long-term scenario for anybody in this space. Despite the fact that it is extremely competitive, the market is moving and developing at a pace that is extremely exciting.
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Online shopping has dominated in the last decade, how has this influenced your operations? Are you planning to launch an exclusive online concept brand? Online is not on our current agenda; we are not planning to launch an exclusive online concept brand, but we never say never. However, we absolutely see online as a key part of our strategy and there are a number of developments that are going to be coming out over the next few months. Conviviality Retail will be doing some interesting things in this space within the next few months, which is going to open up channels and give customers more choice about how they engage with us.
In your opinion which trends will dominate the retail market in the next few years? I keep hearing that in retail everything is about the customer, and retailers are putting the customer at the heart of everything that they do; but in a general sense, few retailers are really delivering on that promise. The sector is going to move towards a much more personalized experience as consumers are no longer prepared to have a mass-market customer experience. Customers would like to be treated like individuals. They want to get the right communication at the right time, the right product offer at the right time and the right channel. They want incentives, and to be motivated with personalizedpropositions.
We are all task rich and time poor, and therefore the immediacy of how we can buy products in respect of the category, is absolutely crucial. Retailers that are able to deliver a personalized experience, and join everything together to drive an immediate experience and the most convenient customer proposition, are the ones ultimately moving forward.
Speaking about convenience, what do you think is the significance of logistics in the next ten years? At the moment, logistics is the key battle-ground for every retail category whether that is convenience, groceries, alcohol, or fashion. Retailers have to think about customer relevance. You fundamentally have to let customers buy from the channel of their choice and return goods to the channel of their choice. Ultimately, finding ways of fulfilling customer orders, as quickly and as profitably as possible is crucial. It is not always easy but a balance must be struck. Fundamentally, retailers have to find a way of delivering the right experience to the customer; and that is about speed, and doing it on customers’ terms.
By Ilona Taillade during the World Retail Congress 2014

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