Convenience stores face a few challenges in scaling them, but there are solutions.
Paul Brenner, Vibenomics
We live in an age of convenience, with a high percentage of millennial and Gen Z consumers who consider themselves heavy convenience store shoppers leading the charge. But they aren't alone. Half of all U.S. consumers (and 45 percent of global shoppers) cite "the convenience of getting purchases instantly" as the No. 1 reason they pop into a physical store rather than ordering online and waiting for delivery, according to a Mood Media study.
Also on the rise are retail media networks (RMNs). A BCG and Google report suggests RMNs will grow 25 percent year over year and reach $100 billion over the next five years. Experts predict that the number of marketers planning to use RMNs to connect with customers will triple in 2023.
The top 10 largest retailers in the United States — from Kroger and CVS to Lowe's and Albertsons — have retail media networks. However, 7-Eleven Inc. is leading the way for convenience stores in adding their own RMNs to the mix.
While retailers and advertisers alike are hopping on the retail media bandwagon, the key to making RMNs work is serving targeted consumers with consistent, relevant and personalized ads. As popular as RMNs have become, convenience stores face a few challenges in scaling them. Here are some potential solutions to resolve those challenges:
1. Outdated or Nonexistent Technology Systems
While all c-store chains have advertising strategies, they may lack robust tech infrastructure in the brick-and-mortar stores. The best systems create a true omnichannel experience with a combination of on-premise media and in-store digital advertising serving shoppers a similar experience to what they encounter online and within the c-store mobile apps.
Convenience stores can enhance their in-store experience by:
Ad-enabling the audio in-store, capturing shopper attention and serving personalized ads;
Ditching traditional endcaps and menuboards for digital displays, keeping the content fresh and relevant; and
Creating an engaging and interactive shopping experience.
2. Shrinking Loyalty Program Membership
One of the best sources for first-party data — shopper loyalty programs — has seen significant decreases in participation. A Paytronix report found that between 2019 and 2021, membership in c-store rewards programs dropped 16 percent. The pandemic influenced this drop, with fewer people shopping in-person and c-stores halting promotion of these programs.
Electing not to promote loyalty programs with employees or consumers became industry standard. Yet these programs can incentivize members to participate more fully and, by sharing their transactional data, enable c-stores to offer personalized recommendations via text, email or in-store messaging.
C-stores with robust loyalty rewards programs can leverage the data these programs collect on purchase decisions to consistently and accurately identify needs and preferences, adjust marketing campaigns, and advertise similar products.
Delivering Competitive ROI & Better Brand Experiences
Retail media networks can help c-stores increase their workflow efficiency by improving access to data and generating more accurate measurements. To maximize ROI and give brands, stores and consumers the best experience, c-stores should consider implementing RMNs.
This platform employs an incentive-based approach to personalizing the messages customers encounter along their shopping journey. RMNs use data from loyalty and incentive programs to connect the dots, enabling personalized promotions for shoppers in the right place at the right time and offering c-store operators:
A single, consistent customer view;
Unified measurement and targeting across all channels; and
A more robust reporting profile to simplify attribution and tracking.
A retail media platform gives stores a more holistic view of shoppers' activities, such as whether a social media ad influenced a purchase or a customer redeemed a coupon at the point-of-sale.
The Future of C-store Experiences
Nevertheless, utilizing retail media platforms comprises just one element of the strategy convenience stores can leverage to elevate their customers' shopping experiences.
For c-stores to continue to maintain a competitive advantage and meet shopper expectations, leadership must continue investing in in-store digital media, including visual displays and audio advertising. These channels will help c-stores maintain their resilience in the face of economic volatility and industry change.
C-stores can use interactive displays where shoppers enter their preferences, search for products and sign up for loyalty rewards programs. Using the proximity to the point-of-purchase, c-stores can make connections across the retail media ecosystem. This strategy allows brands and retailers to easily identify what promotions work — and which don’t — based on spontaneous customer purchases, and gives the opportunity to adjust accordingly to provide more targeted product matches and relevant offers.
Another digital touchpoint where c-stores can leverage retail media is fueling stations. Many c-stores implemented video screens at their fuel pumps years ago. In the time it takes to fill a car, a store can offer personalized content to its captive audience. However, taking advantage of the pump requires retailers to connect outside ads and entertainment to the store’s products.
They can take a lesson from 7-Eleven, which entered the retail media space in 2022. The c-store chain formed a team within its marketing department to lead the strategy, attract CPG brands, and offer the retailer's customer loyalty data to help brands reach and target more customers via personalized approaches.
Because retailers like 7-Eleven are successfully navigating the retail media industry and establishing themselves as leaders, other c-stores should take baby steps, making sure to avoid alienating shoppers or distracting from their core mission. Developing and scaling a solid RMN strategy takes time.
The question has changed: It's no longer "if" but "when" and "how" will convenience stores innovate? The answer lies, in part, with the addition of RMNs.
Paul Brenner is senior vice president, retail media and partnerships, at Vibenomics. He has more than 25 years of experience in media, entertainment and advertising technology leadership. Following Vibenomics’ recent integration with Mood Media, Brenner was promoted to his current role, where he works to evangelize and innovate the in-store segment of retail media.
Editor's note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.