Convenience / Merchandising Features / Channels / Omnichannel / Tactics

Focus on Digital: Connecting With Convenience

August 29, 2014

In comparison to other retailers, C-stores have a unique set of challenges. Although the channel has grown over the last few years, it faces pressure from the low prices of dollar stores and the wider assortments of drug chains. Convenience stores are often considered strictly as destinations to purchase in-the-moment “necessities” such as gasoline and cigarettes—by far the two largest categories in the channel. Operators face the challenge of building baskets around these staples, and encouraging trips for other items. This is exacerbated by pay-at-the-pump technologies, which can eliminate the opportunity to leverage impulse purchases from customers “just stopping for gas.” Many C-store operators are looking to prepared, on-the-go foods to help bridge this gap, in an attempt to capitalize on consumers’ busy lifestyles. Others are adding healthier fare to their offerings in an attempt to reach additional customers who might have previously been turned off by convenience store cuisine.

Tedeschi Food Shops, a 190-store chain in the northeast, looked to capitalize on these health-conscious consumers when it expanded its “400 Calories or Less” line of sandwiches in January of this year. With the NFL playoffs in full swing, the chain geared a promotion to build on the playoff excitement of local New England Patriots fans. Their “Playoff Showdown” looked to crown a sandwich the “400 Calories or Less Super Bowl Champ.” Facebook fans were able to vote on their favorites, and enter for a chance to win gift cards. This is a great example of how a retailer can use current events to build awareness for new items that address key consumer demands. Are you matching your promotional calendar to your shoppers’?

Wawa has had success with a similar campaign, called Parched Madness. The social contest lets fans vote on their favorite store brand iced tea flavors during the NCAA Basketball Tournament (which I wrote about for my March column, “Madness Can Be a Sane Choice For Engaging Promotions”). This is just one example of Wawa’s many successes, which are, in part, a byproduct of their willingness to fail. While they view technology and innovation as important, not all of their attempts have been successful. As far back as 2005, they looked for ways to let customers use technology to place their orders before getting in to the store. An early cell phone app, at-the-pump ordering, and drive-through pilots all failed to gain traction, as their shoppers preferred to come in to the store. Because they were willing to fail, Wawa gained information on how their customers shopped, and are able to build new initiatives with the knowledge of what won’t work for them. Are you willing to take a big swing, even if it might miss?

One of the best examples of how to bring customers from the gas pump into the store is from Wisconsin-based Kwik Trip. The chain uses text message alerts to let their customers know when gas prices are about to rise. Within three years of launch, they have built a network of over 125,000 opted-in shoppers. Even with gas prices dropping, they still see a strong response from their price-conscious consumers. To bring people into their stores, they offer a $0.05 fuel discount, which can only be redeemed at a register. This is coupled with offers for their store brand and prepared food products to further incentivize program members to enter the store. Many offers are tied to “holidays” such as national hot dog or doughnut day. How are you using technology to built incremental sales?

Cumberland Farms also uses mobile couponing to drive in-store traffic. Their SmartPay mobile app, developed in partnership with the National Payment Card Association, lets users link their checking account to the app, which can be used for payment at the pump, or at the register. This allows the retailer to bypass costly card processing fees, and reward users with $0.10 off each gallon of gas they purchase. Cumberland Farms adds to the user incentives with additional Coupon Rewards. These coupons are broadcast through the mobile app, and are typically valid for 30 days. To redeem, users just need to tap the “redeem coupon” button in the app, and show the barcode to the cashier within 15 minutes. Finally, the retailer awards a free hot dog, fountain drink, or hot or iced beverage after every 30 gallons purchased in the program.

One of the popular concepts relating to social media has been the idea of “weak signals.” These are the qualitative data and information available from listening to social media, which include opinions, preferences, and desires that can influence purchases before they show up in traditional data. 7-Eleven took advantage of these signals by investigating an increase in lemonade consumption. By polling their shoppers, they found that blended flavors were pushing the spike in consumption. After making this discovery, they reached out to Dr. Pepper Snapple to design a limited-time release line of blended lemonade flavors, which they have marketed as a destination item to increase trips. To further the online influence, 7-Eleven leaned heavily on social media to boost awareness during the limited launch last summer. Are you listening to what your customers really want?

 Leading digital marketers in the convenience store arena have shown a willingness to use creative digital solutions to drive additional sales and become more than just “gas and cigarettes.” Are there some lessons here for your business?  

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