Did you know that in 2017 one out of every 30.9 dollars spent in the US was spent at a convenience store? Additionally, 2017 marked the 15th straight year of record in-store sales and the 4th year of over $10 billion in pretax profits, according to recent data from the National Association of Convenience Stores.
Fuel sales experienced a 14.9% increase and non-fuel sales rose 3.2% in 2017. What’s interesting, however, is even though fuel sales experienced more of an increase in sales than food sales, food sales account for a much larger portion of profit dollars.
What does this mean? It means c-stores experience more value when they successfully get consumers from the pump into the convenience store.
Accomplishing this goal to boost profit margins is possible but no easy feat. For convenience stores to grow, acquire more customers, and stay competitive, it’s vital they stay relevant to their core customers.
In this action-packed post, we’ll explore four ways c-stores can fuel growth through effective customer engagement.
1. C-stores must get to know their market to engage them
If you’ve been a regular patron of c-stores over the past 10-15 years, you will have noticed a huge transformation when it comes to the type of products c-stores offer. You now see an increase in health bars, flavored water, fresh deli sandwiches, and even fruits and veggies. In fact, the idea that gas station food is of lower quality and less healthy isn’t apparent in the minds of Millennials and Generation Z.
The reason for the transformation? C-stores have utilized consumer buyer and patron data to get a better sense of what consumers want, and that’s more healthy options. Making changes based on this data is paying off.
Fresh, healthy items boosted sales across convenience stores in the first half of 2018, according to CSA. And, 79% of retailers of c-stores said their in-store sales increased during the first 6 months of 2018 and that increase was helped by offering fresh and healthy items.
By using data to get to know their customers and understand what customers need and want, c-stores can better engage their customer base and drive incremental revenue.
2. C-stores must have purchase data to make informed decisions
Not only do c-stores need to know who is shopping in their stores, but it’s vital for them to know what their most loyal patrons are purchasing.
In 2016, according to research by The Nielsen Company, 85% of convenience store sales came from six main categories including cigarettes, packaged beverages, candy, beer, salty snacks, and other tobacco. Nielsen found other subcategories including enhanced water, import, super premium and craft beer, e-cigarettes, tools and housewares, premium and craft beer, and sparkling wine all delivered mid-to-high double-digit sales growth.
Of course, c-stores can make decisions based on this data, and it’s better than making decisions based on no data at all. However, with an automated customer engagement platform, it’s now possible for c-store owners to easily capture consumer purchasing data that is 100% relevant to their own store.
A modern customer engagement platform tracks exactly what customers are buying, how much they are spending, and how often they are visiting, among other important customer behavioral and purchasing attributes. With this data, you can make more relevant product decisions that are bound to please your most loyal customers.
The most successful c-stores of the future will invest in software that captures customer purchasing data that enables them to make informed decisions.
3. Be willing to support changes driven by consumer needs and trends
25 years ago, c-store owners based the bulk of their business model on selling the same 3 products as other convenience stores. These 3 main drivers for all convenience stores were gas, cigarettes, and coffee. Through the years, however, consumers trends have changed dramatically as have the main drivers of sales.
If c-store owners want to be successful, they must be willing to innovate and support changes driven by consumer needs.
One current example of this is the increase in offering more products in popular subcategories such as RTE meals, enhanced water, health bars, etc. This focus on offering healthier food options is a direct response to a peaking consumer interest in health and wellness.
As mentioned earlier, c-stores that are capitalizing on new consumer trends, including this newly increased interest in health, are experiencing a boost in sales. Not only is this evidenced by a boost in the sales of healthier products, but is also evidenced by the growth in deli sales. Deli sales grew 8.3% to $1.2 billion last year. Consumers still seek fast and economical options at c-stores, but having healthier options is now a consumer priority.
Consumers have also shown an increasing preference toward c-stores with loyalty programs. Recent research shows rewards program offerings are almost as nearly as important to consumers as the location in deciding where to shop. 43% of shoppers selected where to shop based on a loyalty rewards program, while 44% of shoppers selected where to shop based on location.
Not only do consumers show an increased preference towards c-stores with a loyalty program, but automated customer engagement platforms like Thanx offer an added bonus. As consumers earn rewards through purchases, merchants capture invaluable data that helps drive better business decisions. This data includes things like visit frequency, spend amounts, product preferences, and even the ability to capture direct customer feedback through NPS feedback.
Using a customer engagement platform like Thanx both satisfies consumer needs for rewards and merchants need for accurate data capture and insights.
4. Increase customer engagement with speed, excellent experiences, and personalization
Convenience stores have three key strengths, according to the Nielsen Company, and they are speed, experience, and personalization.
The Nielsen Company mentioned these three strengths are the foundational blocks that c-stores can build on as competition increases and channel lines blur.
Convenience stores can remain competitive as they offer the personalized experiences consumers are demanding. This can include the RTE meals, water options, health bars, fresh fruit, and any other products, services, and options your data may indicate your consumers want.
Furthermore, consider options to increase the convenience and speed of your locations. C-stores remain competitive because they allow consumers to kill two birds with one stone. They can fill up on gas, quickly grab a meal, snacks, or supplies and be on with their day in a snap.
Embracing c-store technology is another way to increase the speed of service and convenience to customers. This can include investing in the latest kitchen display systems that make food prep quick to self-order kiosks that reduce lines. Taking it a step further, consider adopting mobile apps that allow users to order in advance and have their food waiting when they arrive.
Finally, remember to build on the third strength of offering excellent experiences. When you provide products and services based on personal data and you keep it snappy, you’re already ahead of the game. However, why not take it one step further and find a way to reward your most loyal customers?
That’s where Thanx comes in handy. Thanx is an automated customer engagement platform that encourages your best customers to come back and spend more. This strategic solution offers robust data on over 40 customer attributes including visit frequency, spend, average lifetime value, and even SKU level detail.
Furthermore, you also get access to real-time customer feedback and NPS so you can keep your finger on the pulse of your customer satisfaction and address issues immediately. Thanx also enables you to send out highly targeted messages (with or without offers) to stay top of mind with your customers and encourage them to come back time and time again. It’s a win for your customers and a win for your c-store.
C-stores are seeing a boost in sales and profit margins and it’s largely due to their budding concern over customer engagement. However, the c-store game isn’t a place to get complacent. To continue to grow and stay ahead of the competition, c-stores must embrace innovation in terms of data collection, technology, product offerings, loyalty program software, and more. As c-stores continue to let customer data lead their business decisions, they’ll continue to see robust business growth.