C-store Retailers Take Over Atlanta

With close to 22,000 attendees at this year's NACS Show, networking, new products and a record number of workshops filled The Georgia World Congress Center in Atlanta

The 2010 NACS Show held in October in Atlanta, hosted 21,983 people, including 1,328 international attendees, for its annual conference — which is ranked as one of the 50 largest trade shows in the United States. Stretched across 370,000-plus net square feet, the expo floor was filled with 1,300 exhibiting companies showcasing the newest additions to their product lines — including 330 companies new to the NACS Show this year — and retailers and suppliers had a number of choices for educational sessions, including 75 workshops and five training sessions.

Aside from the new products — and the endless samplings available on the show floor — the educational sessions always offer best practices and new ideas from retailers, consultants and vendors, and Convenience Store News pulled together some of the best.

FROM HOME TO PUMPS TO STORE

Jon Bausman, director of media and brand development for Ricker Oil, showed how companies are using mobile and social networking effectively to draw traffic, in the session, "Fueling Inside Sales From the Forecourt."

Bausman presented statistics showing 80 percent of consumers have a cell phone and younger consumers (aged 13 to 17) do more texting than talking.

"It starts with having a strategy," said Bausman, noting retailers must take care to market electronically in an appropriate manner. "Don't annoy your customers with texts and e-mails they don't want. Start with your top-selling items."

Of the different social marketing platforms, Bausman was very high on Twitter and the newer FourSquare, presenting examples of the effective use of each.

One promotion, called "Tweet and Fill-up," cost Ricker only $360 in fuel expense and earned the company close to $10,000 in media value. The promo was a tweet announcing that the first five people who went to a specified Ricker location and said, "Ricker Tweet and Fill-up," had their tank filled for free. The public relations value went even further as many news media outlets picked up the story, and video of the event received hundreds of views on YouTube.

Additionally, Norman Toriano, fuel operations manager for Wawa, discussed how important it is to highlight the c-store building and make it enticing for all customers so they feel comfortable going from the gas pumps into the store.

"We design our forecourt with a split wing design so the store is easily seen," Toriano said. "We tested and chose very appealing colors and our canopies are cantilevered all to make the store itself pop."

He also pointed out the music a store plays needs to be inviting (no rap or punk rock) and that audio messages can be especially effective. He played a few humorous and somewhat corny messages that Wawa uses effectively. One emphasized a free coffee promotion while the other talked about safety and how it might be a good time to stop for a cup of coffee to stay awake.

Wawa also uses technology at the pump to draw customers inside. Receipts at the pumps are imprinted with coupons for discounts good inside the store, for example.

"And then, once you get them inside the store, services like free ATMs, keep them coming back," he concluded.

THE RULES OF ONLINE ENGAGEMENT

Today's consumers are certainly online, so convenience store retailers are missing a vital opportunity if they aren't using electronic channels, such as social media and e-mail marketing, to develop relationships with their customers, build brand loyalty and drive sales.

In a workshop on digital marketing in c-stores, retailers shared examples of campaigns they've used to connect with shoppers and lessons learned through the process.

Rather than approaching this arena tactically, Alan Epstein of The Epstein Group said companies need to think strategically first, and fully understand what they want to accomplish.

For instance, the Wallis Cos., which operates 20 On the Run-branded convenience stores in the St. Louis metro area, set forth three goals when it started digital marketing:

• Increase frequency and loyalty;
• Create "mouthpieces" for the brand to attract new customers; and
• Gain actionable consumer insight.

To achieve these goals, the retailer gradually added "touch points" including a Web site, www.ontherunstl.com, and e-mail marketing messages, according to Tracy Hughes, vice president of strategic planning for the company. Its content strategy across all platforms highlights the chain's key differentiators — one being its local connection.

Migrating marketing dollars into these and other digital efforts has allowed the company to be "more targeted and select" in its marketing plan, Hughes noted.

Meanwhile, Cumberland Farms shared the success of its Chill Zone Facebook fan page, which started with 400 fans the first month it went live and now has 122,000 fans.

This summer, the Northeast convenience chain linked its Chill Zone fan page to its company home page, and invited customers to submit photos for the chance to be featured on the home page. Chill Zone sales during the promotion period were at an all-time high, said Kate Ngo, manager of marketing strategy and communication for the chain.

With no other advertising in this category, Ngo credited the fan page for playing a large part in the 21-percent growth they've seen in Chill Zone sales for 2010 vs. 2009.

SPECIFICALLY FOR SMALL OPERATORS

The industry's single-store owners were not left out of the learning, as the workshop schedule included a track of six educational sessions specifically geared toward small operators.

In a workshop on digital marketing, attendees were schooled on how to use social media, e-mail marketing and mobile marketing to trumpet their brands without blowing their budgets.

"Whether your business is large or small, you can make it bigger with the Web," said Lorri Thomas, CEO of Web Marketing Therapy, noting she's a huge advocate for blogging and social networking sites such as Facebook. "The beauty of the Web is that it doesn't go away, and you don't have to do all these things at once. You can do one and then build onto it."

Successful marketing multitasks, Thomas said. With the Web, she said a retailer's efforts can work in unison — a blog linking to Twitter, and Twitter then linking to Facebook.

Another session offered tips on where small operators can find cost-savings in their operations.

"If your business doesn't control expenses, expenses will control your business," stressed Rudy Moeller Jr., a principal with Alliance Cost Containment.

Based on client case studies, Moeller said significant savings can often be found when procuring office supplies; coffee supplies; health insurance; credit card processing; utilities; car wash supplies; armored car services; waste disposal; bathroom supplies; and signage printing.

In the final workshop of the Small Operators track, industry insiders addressed one of the most common questions posed by smaller operators: Should I go or grow?

Terry Monroe, president of American Business Brokers, said now is a great time to both buy and sell. However, he laid out eight warning signs that a retailer should exit the business:

• The thrill is gone.
• You keep tinkering, but don't get anything accomplished.
• You've outgrown your business.
• Your industry is changing.
• A significant, life-impacting event occurs.
• Partnership dissolution.
• Your business has outgrown you.
• Non-profitability.

On the other hand, for operators looking to grow, Monroe believes in this rule of thumb — "If you have one store, you can make really good money. If you have two stores, you can still make good money. Once you get to three stores, you might as well have 30," he advised.

CRAFTING POSITIVE PROMOTIONS

During the session "Buy Me: Developing Effective Promotions," retailers inside and outside the c-store industry presented methods for creating promotions that match company goals.

Robert Perkins, director of marketing for Rutter's Farm Stores, explained the York, Pa.-based chain of 55 stores uses promotions to drive volume in stores through foodservice. Part of Rutter's promotional strategy is to drive traffic through value services, such as free ATMs, low-priced fuel, and cigarettes sold at the state minimum, according to Perkins. And once customers are in the stores, it is the store managers' job to upsell through promotions.

Perkins advised retailers to ensure there is ample inventory available for a promotion, and to weigh the benefits and risks of "two-for" promotions. Rutter's consistently sells a single promotional item in a two-for promotion at regular retail price to encourage the purchase of the promotion and drive volume. "It makes the consumer ask: 'Why would I not buy another one?' The goal is to change behavior, not give away margin," Perkins said.

MAKING THE MOST OF LOYALTY DATA

As more and more retailers begin to offer loyalty programs, they are realizing the vast amount of data available for collection and analysis on these customers — and the smart ones are using it to draw them back into the store.

"We capture information with scanners at the store location where we scan a customer's license, and our receipts print out the customer's name and points," said Jeannie Amerson, advertising and loyalty manager at Flash Foods Inc., during the "Panning for Gold" workshop. "We host and maintain a database on our server and all transactions are real-time."

The company has a business intelligence tool to pull customer information and run targeted promotions for products. It also offers incentives to get customers registered online, where they will get more detailed demographic information.

At Speedway SuperAmerica, they choose small groups of customers to offer promotions to, in order to gauge the value of each, and they look at buying habits, what customers purchase and how often they shop the stores, said Christianna Frizzell, manager of customer relationship at Speedway.

"We look up the database information on customers to see where we can get more visits from them," she explained. "We segment based on trip frequency and then offer them up to 7,000 points if they reach the visit threshold we set. Also, customers who have not purchased in a particular category we will give them incentives to purchase again, and will work with suppliers on that."