Transactions in Transition

Most convenience-store shoppers are going somewhere else.

Sure, two-thirds of Americans visit a c-store every month. It’s the country’s fastest-growing retail channel, with 124,000-plus outlets and sales up 10 percent in the last year-even while overall retail sales fell eight percent.

But most c-store shoppers are on their way elsewhere, and that state of transition means opportunity for marketers — if they’re willing to help c-store owners. Convenience stores’ biggest challenge is how to compete better against other classes of trade. Store managers know their business and their consumers’ behavior well, but they often lack the capability to build more sophisticated marketing approaches, expand their target markets and grow the bottom line.

Help Wanted

C-stores have historically battled multiple demons: fragmentation; high contrast between the performance and potential of neighborhood independents; pressure on margins; a perception of high prices; lack of differentiation inside and outside the category; and big variations in marketing capability, resources, and buying power. Solving these problems could transform convenience stores into a truly dynamic retail force — if it weren’t for the fact that half of all c-stores are independently owned. That results in uneven stages of business development — a state of affairs often cured by a massive industry-wide roll-up, in which stores are gobbled up and assimilated into integrated operations networks.

If and until then, marketers can help c-stores create consumer-centric co-marketing by recognizing that most c-store shoppers are really on their way elsewhere — and often shifting to a new mood. In fact, shoppers who frequent the same store make 60 percent of their visits while on their way to a different destination. Understanding this transition presents a tremendous opportunity to broaden sales.

But marketers often face a challenge that runs counter to the consumer’s mission: Find the right product and check out quickly. It’s a kind of Teflon experience, where the least interaction garners the most satisfaction. Marketers need to drive loyalty and build brands, tasks that require more contact, not less. They can accomplish both, while providing transitory consumers with a deeper benefit.

Shifting gears with shoppers

Eighty percent of c-store purchases are planned, more than double the figure for supermarkets, per Point of Purchase Advertising International. What really gets purchased is often a function of time of day. Take beer: Ninety percent of beer buyers know exactly what they want before they enter the store. And they nearly always cross-shop — usually for snacks, meals, food service items, or tobacco. As long as what they need is there, these shoppers are happy. The “occasion” on their minds isn’t the purchase occasion — it’s the beer-drinking occasion to come. That means this transaction can carry some real emotional impact, company relevant value and instant gratification with the right marketing and message.

These transitions happen throughout the day. In the morning, for example, Tropicana woos harried coffee grabbers with Smoothies and P-O-P that encourages commuters to “Take breakfast in hand.”

It’s all about what’s happening next, and these shoppers are open to triggers that are in sync with the transition they’ve initiated. Where are they going? From work to play; from struggle and effort to relaxation and reward; from solitude to socializing; from on-the-clock to on-their-own. Or the opposite. In either case, the store transaction is a means to an end — and the convenience store plays a pivotal, transitional role.

At worst, catering to consumers’ transitions lets marketers gain strength in a crucial channel; at best, it lets them own the category by helping c-stores own transition occasions. Then c-stores can better differentiate themselves, boost incremental purchases, expand targets, and enhance store perceptions — all courtesy of the vendor brand.

Still, marketers must avoid a one-size-fits-all approach. They should customize solutions for key retail accounts, tailored to retail-brand priorities — and consumers’ varying needs. Marketing programs may include flexible cross-selling components (developed with the host marketers’ brand as the centerpiece) to help retailers provide unique offers. At the same time, marketers may also extend brand equity to other day parts, leveraging other brands in exchange for greater visibility. Vendors and store managers can even improve operations to make a tangible difference in the success of individual stores.

Consumers can lead marketers beyond traditional distribution arrangements and standard relationships, retailers and marketers can both benefit by satisfying the lifestyle solutions of people on the go.

So, which way are you headed?

Steve Bullock is senior vp-director of planning at Frankel, Chicago. Catch up with him at [email protected].