Leveraging data to unlock consumer insights in the convenience industry.
Todd Gulbransen, PDI Technologies
More than three-quarters of the population (78 percent) claim that good loyalty programs influence their spending habits. These same people are also more likely to do business with a company offering enhanced value and experiences through these programs.
Successful convenience stores across the nation have used this kind of information to their advantage and switched their line of thinking from "Should I use loyalty?" to "How do we make loyalty programs the best they can be?" For c-stores, implementing loyalty programs can help drive differentiation in the marketplace, resulting in incremental in-store and fuel sales.
In today's unpredictable economic climate, convenience stores have an opportunity to optimize business operations to better meet current customer needs. Keeping a finger on the pulse of how consumers are responding to external stressors or cultural shifts is the first step in getting there.
During times of high stress, it's statistically proven that consumers tend to binge on more indulgent foods (i.e., packaged snacks, candy or to-go hot dogs). This kind of behavior can be attributed to the sense of comfort that indulgent foods provide and the perception that convenience stores offer quality products at affordable prices — a win-win scenario.
Consumers may trade off some of their daily habits like grabbing a coffee from a high-price, gourmet coffee shop in favor of a more affordable, quality option like a quick cup of joe from their local convenience store.
Looking at post-pandemic behaviors, the c-store industry saw a boom in foot traffic. Unlike other industries, c-stores are conveniently located for people on the move, providing the luxury of flexibility and speed, which has allowed the industry to thrive during turbulent times.
Connecting the Dots Through Data
Although it's clear that convenience stores are quite resilient, it remains vital to stay ahead of evolving consumer trends and offer solutions that truly align with customer needs. To make these programs effective, however, there needs to be strong strategies in place derived from data. For instance, identifying customer pain points and addressing them with actionable solutions.
It really all comes down to understanding what is important to customers and meeting those needs. While it would be great for convenience store owners to have the time to chat with all their customers about what they do and don't prefer, we live in an age where technology partners can streamline (and help differentiate) businesses. Leverage customer data: implement the right tools to responsibly collect, organize and make accessible the data required to quantitatively understand customer needs and measure business impact.
From there, c-store owners can begin to action data. For example, number of active customers, spend per customer by SKU, by site, what time of day customers are coming into the store, regional differences, trends in key categories like foodservice, and overall return on investment. The list goes on.
Recently, PDI conducted its "2023 Footfall Traffic" report, which revealed the following key considerations when thinking about customer traffic:
Inflation makes an impact. An analysis of convenience store trends throughout 2022 shows that sales growth in dollars was primarily driven by increases in average item price, with spending per basket up 3 percent and average units per basket down 3.9 percent.
Post-COVID, the role of c-stores has become a retail location for extreme efficiency. Today, most convenience store shoppers spend under five minutes in the store. This creates opportunities for the industry to increase dwell time with evolved offerings such as advanced foodservice, secure Wi-Fi and more — especially as c-stores look to attract the growing number of electric vehicle-charging consumers.
Shoppers expect an excellent physical experience. An above-average rating in outdoor lighting led to a 5.3 percent increase in foot traffic, while a below-average rating in the same category caused a proportionately higher (8.5 percent) decrease in traffic.
With this kind of information, c-store owners can create strategies catering to these needs and therefore help grow their business and increase their profit margins.
It may seem like a huge lift to go the extra mile to deliver enhanced value and experiences for customers, but for smaller retail operators looking to compete in their respective markets, leveraging membership-based programs are the best way to understand what is important to your customers in order to build loyalty to your brand and keep customers coming back time and time again.
Incorporating external expertise and technology partners can allow business owners more time to spend on the other aspects required to successfully operate their business. Not to mention, utilizing data-driven solutions will ensure timely, measurable results that help operators understand business impact, leading to a more resilient business for owners willing to adapt to new loyalty models and technology.
With the right mindset, data and partners to help them flourish, convenience stores will continue to adapt and thrive in times of economic stress.
Todd Gulbransen is senior vice president of consumer marketing and engagement solutions at PDI Technologies, which serves over 200,000 locations worldwide delivering powerful solutions that serve as the backbone of the convenience retail and petroleum wholesale ecosystem.
Editor's note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.