Facebook & Text Lead A New Marketing Era

Social Media Usage in the C-store Industry

New survey measures how c-stores use social media and text marketing to engage shoppers

Capturing a greater share of today's wallet requires convenience retailers to win the hearts and minds of more consumers. To win the heart, retailers need to develop stronger relationships with consumers in ways that show appreciation and build affiliation. To win the mind, retailers need to reach consumers with relevant and timely communications that help to influence what, when and where they buy.

Social and mobile marketing are increasingly becoming vital methods for retailers to communicate with customers in an attempt to build patronage and sales. While retailers have a lot of options to choose from, two stand out. Facebook is the leading social media platform, offering retailers the ability to reach their target consumer either on their computer, smartphone or tablet. Text marketing has become a more cost-effective mobile tool in recent years, enabling convenience retailers to reach customers on their cell phones with specific calls to action.

Balvor LLC and Convevo Partners, in collaboration with Convenience Store News, examined how convenience retailers view and use electronic platforms, ranging from e-mail, Facebook, texting and more. This work provides new insights based on input from 135 convenience store retailers that represent more than 26,000 stores and is the first in-depth look at current retail perspectives and practices in this area, specific to convenience retail.

FACEBOOK FRIENDS

Half of the U.S. population today is participating on Facebook, and convenience retailers are close behind. In fact, 43 percent of convenience retailers indicate their company has a presence on Facebook. However, usage rates vary considerably by company size as nine out of 10 larger retailers — those operating 51 or more stores — are on Facebook, whereas approximately one in four smaller retailers — those operating 10 or fewer stores — have a Facebook page. (Fig. 1)

Why the dramatic differences? Even though setting up a page is free, companies still need to invest labor into building the page, creating new messages and responding to comments. Additionally, companies need a degree of marketing and technical competencies to execute. Larger companies are more likely able to address both of these core issues.

Beyond those using Facebook, 18 percent said they are likely to establish a page in 2012, while 12 percent are still evaluating. The remaining 26 percent, which are nearly all smaller retailers, indicate they don't have any plans to use the platform at this time.

PLEASE "LIKE" ME!

Why aren't more retailers that operate one to 50 c-stores embracing Facebook? It appears availability of human resources is a primary obstacle preventing retailers from doing so, as 64 percent of those that aren't using Facebook agree they don't have the time to internally manage it. Interestingly, this finding may be an effect related to the real cause.

Retailer uncertainty may help explain why some haven't invested the time. For instance, more than half (54 percent) of retailers not yet using Facebook agree that their company is unsure how to leverage the platform effectively, and 50 percent of retailers also agree that they don't know how using Facebook will help improve business results.

Approximately 59 percent of the total U.S. population 18 years or older is on Facebook.

Source: Balvor LLC

This isn't to suggest that retailers using Facebook already have addressed issues such as these. In terms of knowing the impact, just over one-third of the retailers on Facebook indicate they routinely measure the effectiveness of various special offers, which means conversely that nearly two-thirds may not have a solid grasp on how their activities are impacting the business.

So, while many retailers remain on the sidelines until they learn how to integrate and/or evaluate Facebook, others continue to refine their tactics. This observation is reinforced by the finding that retailers already using Facebook are more than twice as likely as non-users to agree that their company takes somewhat of a "test and learn" approach related to new tools. This insight implies that the culture and/or orientation of an organization can also play a key role in usage rates.

YOU ARE WHAT YOU POST

The Facebook platform provides an array of ways to engage consumers, which include pushing special offers to fans, as well as receiving input via discussions, polls and more. All these activities can collectively help attract and retain consumers in ways that create a win-win situation enabling both retailers and shoppers to unlock a critical value associated with social platforms.

How are c-store retailers using Facebook? In terms of recent activities, approximately two-thirds (67 percent) indicate their company has responded to consumer comments, while just over half (53 percent) had been focusing on building their fan base within the last 30 days. Slightly more than four in 10 retailers (41 percent) offered a fan-only special in the last month, while 36 percent asked various types of questions of their followers. (Fig. 2)

Building the base is essential for retailers to reach a potentially larger consumer base and it seems to be working for some. Over one-third of the retailers on Facebook claim it now draws more consumer traffic than their company website. However, having the most fans isn't the end game as leading marketers understand. Rather, it's about having an engaged fan base that responds in the desired ways, whether that's sharing of information or taking advantage of special offers.

SEND ME A TEXT

Nine out of 10 Americans 18 or older (87 percent) own a cell phone as of January 2012, according the Pew Internet survey. And earlier research from mid-2011 from Pew revealed that almost three-quarters of cell phone owners are occasionally texting. This means that approximately two-thirds of the U.S. adult population is connecting via text messages.

Convenience retailers overall, however, aren't embracing text marketing, also known as SMS [Short Message Service] messaging, to the same degree as they are using Facebook. Just over one-quarter indicate their companies are currently using SMS. Considering that only one-third of the retailers on Facebook also use text marketing, whereas eight in 10 retailers that are texting also have a Facebook page, it appears that as retailers adopt Facebook, they become more aware of the power, affordability and ease of use of text marketing.

Given that smaller retailers are likely still trying to unlock the latent value in Facebook, it's not surprising that SMS usage rates differ even more among various sized companies, compared to Facebook usage rates. (Fig. 3) The implication is that larger store operators are gaining a share of voice as they're able to connect more effectively with highly directed promotional offers.

In either case, it seems as if more retailers are getting the message that texting is another valuable way to potentially drive store traffic — nearly 40 percent are currently evaluating how to approach this area of opportunity.

TYPE "H" FOR HELP

Given that text marketing hits a consumer's cell phone, this can mean catching them at times when they are out and about. And convenience retailers with a little planning can easily schedule when their message is sent, allowing for opportunities to learn when the best time is to transmit this type of communication.

As far as types of messages, nearly two-thirds of the retailers are promoting special, text-only deals like "get a free muffin with the purchase of a large cup of coffee." A similar percentage of retailers are highlighting other special promotions, such as a chance to win sporting tickets. And if a retailer is now offering something new such as video rentals or new fresh food offerings, just less than 60 percent of them are sharing this news with consumers via texts, too.

Key engagement metrics include:

Growth in new "Likes" Monthly active users Post views Post feedback Page views Video and photo views

The inherent challenge with text marketing — like many of the other platforms — rests with building the user base. As a result, retailers need to build awareness and interest in text programs by using a range of tools in their toolbox. Three-quarters of the retailers that are engaged in text marketing indicate that they promote their program with point-of-purchase signage. Nearly as many promote their text clubs on their company website, while about two-thirds encourage sign-ups via their Facebook page.

Fewer retailers (44 percent) highlight it on an e-mail blast, but that may be related to the fact that e-mail marketing has similar overall usage rates as text marketing across convenience retail.

REPLY "YES" IF YOU AGREE

Although its usage may be lower than Facebook, retailers that use text marketing believe it's another platform worthy of their attention and resources. Nearly half (47 percent) of the retailers currently using the platform indicate they're pleased with the results to date. So, while Facebook offers more features for a retailer to use, text marketing's precision and ease of use enables retailers to more easily measure the return from their effort invested.

The convenience retail channel continues to demonstrate its ability to win when other retail formats struggle, and a large element of that resides in the entrepreneurial spirit of the store operators. Part of that success is due to their ability to more quickly adapt to changes in the marketplace, of which technology is just another element in the equation. This may help explain why half of the retailers agree that their companies operate in a "test and learn" environment as it relates to new tools such as Facebook and text marketing. (Fig. 4)

These may not be the only platforms for convenience retailers to consider, but they are the two leading ones today. However, tomorrow brings new opportunities and with it, new solutions — like loyalty programs at the pump or even in the store — that convenience retailers will need to evaluate and ultimately integrate in order to better serve the ever-changing consumer.

KEY TAKEAWAYS

Based on the collective experiences and observations from retailers, four strategic themes emerged as it relates to effectively leveraging these platforms to achieve business goals:

• Do things right from the start. Develop a strategy that helps others understand the direction the company is taking; establish key criteria by which you can evaluate performance; and create a structure that offers the appropriate level of resources.
• Get everyone on the bus. Clarify roles and responsibilities to improve coordination; share information with various teams to build buy-in across the organization; and ensure that store teams understand their vital role in supporting the plan.
• Help me help you. Be current and genuine with your consumer communications; reward consumer participation with special incentives; and create brand ambassadors by connecting with consumers in ways that move beyond price promotion.
• Speed is life. Develop a response plan so everyone knows how the company will address various circumstances; be flexible and fast as response times are no longer measured in days; and remember it's a dialogue so you need to listen, learn and engage throughout the process.

Comparison of Marketing Technologies

Convevo Partners has evaluated various digital, mobile and social platforms to help retailers — especially smaller operators — understand which tools may be a good fit for their organization. Although one of the first concerns is cost, Convevo finds that out-of-pocket expenses are relatively low for most forms of digital marketing, excluding mobile applications due to development fees. The comparison above highlights that text marketing is an attractive option for smaller retailers to consider given the high prevalence rates for texting; ability to deliver targeted promotions that are more easily measured; and the lower investment resources required to execute. And, due to plan changes from major telecom providers, the monthly cost is dramatically lower today than several years ago and likely would run about $100 per month regardless of the number of messages a retailer sends.

Improvements in technology continue to offer new and different ways to connect with today's shopper. Whether it is text marketing, Facebook or any other platform, the key is whether it's a good fit for your organization. If it is, then be sure the activities are integrated with current business practices. Lastly, embrace the unknown and enjoy the journey because it surely won't stop here.

David Bishop is the managing partner at Balvor LLC, a sales and marketing firm in Barrington, Ill. He can be reached at [email protected].

Greg Ehrlich is the president of Convevo Partners, a strategy, operations and marketing firm in Columbus, Ohio. He can be reached at [email protected].