C-Stores Favor Social Media To Connect With Consumers

New CSNews/Balvor study examines retailers' use of social and digital media

Convenience store retailers may need to rethink their love affair with Facebook, according to the results of the newest social and digital media survey conducted by Convenience Store News and Balvor LLC, a leading retail industry consultancy.

Three-quarters of small-format-store retailers use Facebook, and image building is their dominant strategy for this social media platform. That's significantly more than the number that use digital platforms such as e-mail marketing (56 percent) and text messaging (51 percent).

However, small-format retailers are hard-pressed to quantify any tangible business return on their investment in social media, according to the study conducted in February with 124 large-and small-format retailers representing a total of nearly 30,000 stores in the United States. In addition, c-stores seem to trail grocery retailers in developing a strategy to use digital platforms like text messaging and e-mail marketing to drive sales gains.

Overall, large-format retailers (club, dollar, drug, grocery, mass and supercenter) think they are doing a better job of using digital and social media platforms, relatively speaking, than small-format retailers (convenience stores), although neither group gave them-selves a passing grade.

Asked to rate how effective they are at using social and digital media platforms on a scale of zero to 10, with zero meaning "not at all effective" and 10 meaning "extremely effective," almost half of large-format retailers gave themselves a score of seven or better. In comparison, only one-quarter of c-store retailers gave themselves a passing grade.

"This is not at all surprising," said David Bishop, managing partner at Balvor. "These tools, especially the social platforms, are still relatively new and c-stores tend to be later adopters compared with the grocery industry."

In addition, Bishop continued: "Many c-store operators are still trying to define the proper role of digital and social media platforms in their business, and perhaps some of the results indicate they have not drawn a clear distinction between the two, distinct platform groups."

He pointed out that c-stores are using social media platforms such as Facebook, Twitter, YouTube, Pinterest, foursquare and Google+ for brand- and image-building purposes. When it comes to digital platforms, c-store operators are using these primarily for driving sales, whether that's via incremental trips to the store or items in the basket.

According to the study, nearly half of c-store retailers agree that both digital and social media platforms are vitally important to their business and marketing strategies. In contrast, a much larger percentage of large-format retailers (over 70 percent) views digital and social media as more important to their marketing strategies than their business strategies. (A more in-depth look at large-format retailers' social and digital media usage will appear in CSNews' sister Stagnito Media publication, Progressive Grocer.)

While convenience retailers reported that Facebook was overwhelmingly their most prevalent digital and social media marketing platform, large-store formats had e-mail marketing tied with Facebook at 93 percent of respondents using each of these platforms.

"Facebook may be popular with c-stores because of its perceived low cost of entry," Bishop commented. However, 30 percent of the c-stores using Facebook describe their development level as in the "crawl stage," meaning they have a presence but are still learning a lot. Another 30 percent are in the "walk stage," which means they have a strategy and are testing it a lot.

Fifty-six percent of c-stores say they use e-mail marketing, 51 percent use text messaging, 49 percent use Twitter, 47 percent use foursquare, and 34 percent use YouTube.

Of those c-stores that use e-mail marketing, 21 percent said they are in the "fly stage," meaning they have an integrated approach to using the platform. In contrast, only 13 percent of the c-stores using Facebook are in the "fly stage" of development.

In general, c-store retailers using e-mail marketing and text messaging reported being farther along in their development of these platforms as effective marketing and business tools than those using social media platforms like Facebook, Twitter and the others.

CALCULATING THE IMPACT

Approximately four out of 10 convenience store retailers strongly agree that understanding the effect of digital and social platforms is important, but about the same percentage strongly agree that measuring the return on investment in these platforms is difficult.

Additionally, "small-format stores are far less likely than large-format stores to be consistently evaluating the effectiveness of whatever platform they are using," Bishop noted.

Thirty-two percent of c-stores said they consistently evaluate the effectiveness of their e-mail marketing efforts. That figure drops to 29 percent for Facebook, 25 percent for text messaging, 23 percent for Twitter, and then nose-dives down to less than 15 percent for Pinterest, foursquare, YouTube and Google+.

"What gets measured, gets managed," Bishop said, "so the results would indicate that these efforts are not being managing very effectively. Therefore, the opportunity for retailers is to install measurement processes to help them understand how they are doing."

For c-stores, the primary strategy for using Facebook appears to be for brand and image building. More than half said they use Facebook for that purpose. Foursquare (52 percent) and text messaging (47 percent), however, are primarily used for traffic building. E-mail marketing is used most often for driving traffic (32 percent) and building transactions (26 percent).

Interestingly, despite not being able to measure its effectiveness, c-store retailers appear to be devoting funds to expand their digital and social media efforts. A quarter of the respondents said their companies have created new budget allocations for these programs, while another 40 percent said funding is a combination of new resources and reallocated budgets.

As for investments this year, the research indicates that almost half of the c-store retailers using Facebook expect to increase their resources toward the platform. About a third will increase resources toward text messaging, Twitter and e-mail marketing in 2013.