Convenience stores are known for three things: on-the-go snacks, tobacco products and gas. While there is a consistent demand for gas and tobacco products, customers’ preference of on-the-go products is shifting.
Looking to target the biggest population of consumers, namely men in their 20s and 30s, there has been a noticeable change in the types of on-the-go products these millennial consumers are looking for – specifically when it comes to healthy and organic options. In fact, a 2015 study from Mintel noted that 49 percent of millennials select organic products for at least half of their food and beverage choices.
With sales from organic products reaching $37 billion in 2015, according to the Nutrition Business Journal, there is no question that the organic market is not a segment convenience stores can ignore. This coupled with the fact that more of these target consumers are paying for gas at the pump, as opposed to going into the store, creates new challenges for today’s convenience store to reach this segment of consumers.
According to the 2015 NACS Consumer Fuels Survey, only 35 percent of gas customers go inside the store to purchase goods or snacks. With so few gas customers choosing to go inside for additional purchases, stores need to cater to the needs of each in-store customer to ensure that each walks out having made a purchase.
As convenience stores work to continue driving new in-store traffic, they also need to find the right balance of meeting the demands of millennials without negatively affecting other loyal customers.
To find the balance between increasing store traffic and keeping loyal customers happy, convenience stores can start by analyzing the business data they have on hand. This can be done by implementing a few of the following strategies:
Understand How Local Environment Affects Business
When assessing how to best integrate new products, businesses need to pay attention to their initial results to best understand how geography and consumer demographics affect the types of products being consumed and at what rate. While many will generalize millennial demands, the needs of these consumers will drastically vary location to location.
Carefully Study Patterns in Sales to Find the True Winners
Understanding how new offerings are performing by time of day, geography, and in association with other products will provide insight into which new items have the greatest potential. It’s important to remember to not silo this analysis to one store, but rather examine these patterns across several stores – examining multiple variations of merchandising and offer combinations to see the true trends.
By following this process, both the individual store and chain as a whole can maximize revenue, profit potential of new offerings, and attract and retain new customers.
Leverage Data From All of Your Resources to Optimize Your Strategy
Combining point-of-sale (POS) data with insights from your loyalty program, supply chain data and other external sources offers the best opportunity to intelligently expand offerings and categories of products while keeping core customers happy. This enables stores to have a more holistic and effective sales strategy for every business operation including shelving, new product integration, targeted discounts and advertisements.
Lean on a Loyalty Program to Help More Accurately Measure Market Response
Combining information from POS and loyalty programs can be a sales data goldmine. Convenience stores can leverage pools of information to more effectively define the formula that optimizes both demand and profitability, while also adjusting marketing and advertising to bring new customers inside the store.
Correlate New Stock With Marketing Efforts
Convincing gas customers to come into the store is half the battle, with more than 78 percent of these customers paying by debit or credit card at the pump, according to the NACS Consumer Fuels Survey. Regardless of what items are in stock, convenience stores still need to leverage a series of marketing channels in order to drive in-store traffic. This includes television screens that advertise new products, as well as looking to loyalty programs to mine insights for customized promotions and incentives.
When it comes to determining the best way to serve a new generation of convenience store customers, the key is balance and moderation.
By taking the time to analyze the variables that affect consumer traffic and mining insights from their POS data and loyalty programs, convenience stores can build the optimal strategy that not only easily integrates new products into their stores, but also helps attract a new set of customers.
Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.