NATIONAL REPORT — When it comes to digital strategy, the challenge for convenience store retailers has expanded from concentrating on brand loyalty to devising how they can engage customers beyond everyday transactions. Many operators are overcoming these challenges by creating a more engaging digital customer experience that encompasses every aspect of how shoppers interact with their brand.
A recent webinar entitled "Connected Convenience: Inspire Customer Loyalty With Rewarding Digital Experiences," hosted by Convenience Store News and sponsored by loyalty and engagement solution providers Punchh and Hathway, explored how today's c-store shoppers are redefining the idea of "convenience" and how retailers can evolve their digital footprint to meet the ever-changing expectations of customers.
The webinar was designed to provide exclusive insights on customer trends and expectations; advise operators on how to create experiential programs to drive loyalty and engagement; and offer steps to create a digital landscape that supports an omnichannel customer experience.
Customers' Changing Expectations
Kicking off the webinar, Sam Herro, director of client solutions for Hathway, unveiled the findings of a recent Punchh and Hathway study on how the digital experience drives customer loyalty and how convenience channel customers' expectations are changing.
The study's key findings include:
77 percent of respondents say it's important for c-stores to offer a loyalty program.
When asked what technology is most important to them in a loyalty program, a mobile program rated No. 1 for 50 percent of consumers. "This is clearly an opportunity for brands to differentiate themselves in the market," Herro noted.
Customer expectations aren't being met: 83 percent of consumers would use a convenience store app; however, less than half of the top 150 brands offer this capability.
Apps aren't keeping users engaged: Following a bad experience with an app, not only would 38 percent of respondents immediately delete the app, but 24 percent would also stop purchasing from that company altogether.
Nearly 70 percent of consumers want to earn and redeem rewards across all lines of business at a convenience store.
"We believe a rewards program is just one aspect of a holistic strategy, where customer loyalty is just the outcome of a great experience," said Herro, adding that a clearly defined rewards program can drive that initial transaction for a brand, but to get authentic, long-lasting customer loyalty requires four key components: brand-building, contextually relevant communication, engagement, and customer experience.
The Loyalty Lifecycle
Loyalty is more than just a "program," as evidenced by the evolution of loyalty programs from paper-based cards to mobile app experiences to today's omnichannel experiences that encompass in-store, mobile, online and email, according to Lori Stout, senior director of product marketing for Punchh.
"Anywhere that somebody interacts with your brand, they should immediately know what to expect from that customer experience and it should feel consistent," she told attendees. "All of this works together to create the idea of 'lifecycle loyalty,' or loyalty that lasts."
When convenience retailers reach the pinnacle of lifecycle loyalty, they turn unknown buyers — such as fuel-only customers or those making cash purchases — into known shoppers by capturing incremental information about them and earning the trust of these buyers.
"Now, the next time they come in, you have some more information about these customers, like how they interacted with you during their last visit. As they continue to visit and as you continue to draw them in with the right rewards and offers through the right channels in the right ways, they become superfans," Stout expressed.
"Not only are superfans important because they spend more and tend to move from the pump to inside the store and make purchases, but they also bring their friends and family along with them and bring referrals into the loyalty program," she continued.
Underscoring that 80 percent of profits come from just 20 percent of the most loyal customers, the marketing executive emphasized that creating a simple experience across digital and in-store channels is no small feat. Convenience retailers need to know and understand consumers' identities, plus what they bought and how much they spent, while connecting the dots between in-store and digital purchases in real time.
Making the Investment
One convenience retailer in the foundational stage of the loyalty journey is The Wills Group, operator of 225 dealer sites, 56 Dash In convenience stores and 47 Splash In car washes across the Mid-Atlantic region.
Gaurang "G-Man" Maniar, executive director of marketing at The Wills Group, noted that a small chain like theirs is interested in creating a loyalty commerce platform namely for the competitive advantage it provides.
"Every retailer has [a loyalty program] and you want to make sure you do your due diligence to understand your company, understand your customers, and understand what data can do for you long-term through the right marketing and personalization," he said.
Citing data from a 2020 consumer survey, Maniar noted that 29 percent of customers said they would increase their use of a mobile app; 20 percent said they would start coming into the store more often; and nearly 20 percent said they would start using a mobile site more often. Among the features consumers wanted are curbside pickup and online ordering.
The survey also gauged convenience retailers' level of investment in enhanced technologies. Fifty-five percent of operators said they’d like to invest more in curbside; 52 percent said they planned to invest heavily in loyalty; and 40 percent said they’d invest in online ordering.
"When you think about customer preferences and where our industry is thinking to invest money, the gap for us was great," Maniar said. "We want to capitalize on this mobile-first opportunity from the consumer to gain more data that allows us to market to that consumer."
Adapt or Be Left Behind
Carl Orsbourn, author of "Delivering the Digital Restaurant," warned the c-store operators in attendance to adapt or face disruption they may not be able to recover from.
"The restaurant industry faced closures last year because they were not prepared to face the perils of the pandemic," said Orsbourn, who previously led BP-owned ampm and its billion-dollar grab-and-go food and beverage offering across the brand’s 1,000-plus convenience retail locations. "I believe convenience stores must be ready to build these digital futures."
Throughout the pandemic, consumers have been spoiled by the virtues of e-commerce, micro-fulfillment delivery and convenience in ways shoppers may not have dreamt of even five years ago, the industry veteran pointed out. The path to digital maturity is as relevant for the convenience store industry today as it is for restaurants, he said.
"The amount of data that is available at your fingertips through technology has never been as affordable as it is today. You can now build the most amazing customer relationships on a one-to-one level that can drive loyalty in a way that a stamp card never could," Osbourn concluded.
An on-demand replay of "Connected Convenience: Inspire Customer Loyalty With Rewarding Digital Experiences" is available here.