This article published July 2017. For latest news THIS MONTH'S ISSUE
By Fiona Briggs
Kash Khera, co-founder and managing director of UK retailer Simply Fresh, showed how his business is capitalising on healthy lifestyles and a younger demographic at CSE 2017 and revealed plans for a new smaller store format, Little Fresh - a 350sq ft store concept offering food and drink for people on the move.
Khera described the Simply Fresh format as being a bridge between a traditional c-store and health food outlets, servicing shoppers who don’t necessarily want to eat healthily every day of the week but do require healthy options.
“We are providing shoppers with fresh affordable food and we want to excite consumers with an authentic shopping experience,” he said.
“People are making healthier choices and it’s a step change in how we live. Simply Fresh takes health seriously. We offer everyday brands but also provide healthy alternatives.”
Given that focus, it’s no surprise the retailer has teamed up with the NHS to open its first healthy-focused convenience store in Aberdeen Royal Infirmary. And there are more hospital stores in the pipeline, Khera told delegates.
There are currently 25 stores under the Simply Fresh fascia with a further 50 in development and plans for over 100 by 2018.
The locations are varied and span high streets, tube and train stations, universities and mixed office schemes; with further formats in the pipeline including pop-ups.
According to Khera, food-to-go is really driving the sector and Simply Fresh is enjoying over 35% growth in this category, providing authenticity through its Simply Fresh Kitchen concept.
For the new Simply Fresh pop ups, Simply Fresh is rotating its offer alongside eight different local food businesses and, as a result, has reported a 30% uplift in like-for-like sales and an increase in coffee sales, as the concept builds a fan base via social media etc.
Khera told delegates the business now plans to build kitchens in stores and offer three-month rolling contracts to food brands with retailers taking a percentage of the turnover from the pop ups. Twelve pop ups are targeted for this year.
Khera revealed how Simply Fresh and the trend to healthier lifestyles chimed with younger consumers and millennials, in particular.
“The number of vegans is up by 42% and they are in the millennial camp,” he said.
Khera emphasised the importance of technology for younger consumers.
“Millennials are used to clicking or tapping their fingers to get what they desire. They want to order and receive products immediately and it’s the same with food.”
“New age consumers are users of new technology,” he added. “They are ‘younger tonighters’, 18-24 year olds, young professionals who live for the moment and consume food-on-the-go.”
Khera told delegates their impact on the economy would be significant since they have come of age during a time of technological change, globalisation and economic disruption.
“They want more technology,” he advised delegates, and recommended retailers improve the payment experience in order to satisfy the millennial.
“The mobile has become a hand held wallet,” he said. Millennials also want a customer centric experience, personalisation and tailored offers, he added.
“Retailers need to look closely at what they do with customer data and use it to deliver a more personal in-store experience,” Khera advised.
Other top tips to target millennials included delivering a seamless experience and not just an online strategy, for instance. “The buyer’s journey is likely to hopscotch around, in-store and online,” he explained.
This tech-savvy, smart group has instant access to information and distrusts traditional advertising.
“You have to be transparent. Your business needs to be relevant,” he warned. “Don’t use online lingo or ‘like’ everything that Millennials do but ensure that you align with their goals. The best thing to prove authenticity is to show that you care.”
Social interaction with brands is also important, said Khera, since 68%of shoppers are interested in buying from social media.
“Technology is how they get things done. They will continue to use technology and expect the world around them to adapt,” he said.
With rising retail costs and a finite amount of customer spend, healthy eating and food-to-go are key, said Khera.
But while it has become easier to acquire new retail sites, Simply Fresh did not want to choose a “vanilla option”, he said. Hence, the opening of a Simply Fresh store in a co-working, co-living space, The Collective, in North West London.
Khera suggested there was an opportunity for retailers to rationalise space in store and excite customers with great in-store theatre etc.
“You must adapt stores to accommodate changes,” he advised.
And, while the convenience sector is forecast to grow 18% by 2022, retailers must be responsive to new consumers.
Simply Fresh, for instance, has launched a new app, a digital platform to engage and provide instant gratification. According to Khera, it acts as loyalty card and can be used for digital couponing. A payment app to reduce queues and enable cashless payments is also in development, he said.
Summing up, Khera stressed that the healthy eating trend is here to stay and millennials are big business but they value honesty and integrity.
“Small is beautiful,” he smiled.
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