Using Social Media for a Competitive Edge

Six insights for c-stores to increase sales and productivity

What does the explosion of social media conversations — estimated at more than 10 million and growing — around grocery topics mean for convenience stores?

A recent business intelligence study conducted by Black Pearl Intelligence, exclusively in partnership with Convenience Store News, reveals the expanding upswing of grocery-related social media conversations. The firm also identified tens of millions of convenience store-related conversations within a span of two years in a recent study focusing specifically on the convenience channel.

“The volume and high caliber of convenience store customer conversations within the social media platforms is amazing. Consumers are literally giving the industry a roadmap for product preferences, preferred promotions, when and how they like to frequent convenience stores, as well as a litany of other store experiences,” wrote Bradley Nix, branding and social media expert for Black Pearl Intelligence, a business intelligence firm based in San Antonio.

According to the report, firms that understand how to transform social media data into consumer insights and business intelligence are able to drive growth, productivity and sales throughout the c-store value chain.

Using proprietary methodology combined with subject matter expertise, the study discovered only a few c-store brands use the social media space to create meaningful connections and build customer relationships. Early adopters reap the wealth of insight and intelligence available through the medium. Most c-stores, like their grocery store brethren, are not yet tapping into the power of social media, or have superficial social media strategies on the road to nowhere, according to the study.

“C-stores, with a few notable exceptions, still appear to treat social media as an after-school project when, in fact, its importance and value has ascended to the very top of the communications hierarchy,” Nix said. “C-store customers have seamlessly fused their online and offline shopping behavior. This behavioral evolution has seismic implications.”

CSNews’ own research backs up the finding that c-stores have taken a detour in connecting social media as a primary driver for generating business results. In an online retailer study conducted earlier this year in partnership with retail consultancy Balvor LLC, CSNews found that three-quarters of c-store retailers use Facebook, and image building is their dominant strategy for this social media platform. Yet, few of the respondents said they knew or understood if they are getting any benefit out of their efforts.

The Black Pearl Intelligence white paper cites recent examples of how some industry leaders as diverse as Hawaii-based Aloha Petroleum Ltd., New Jersey-based QuickChek Corp. and Iowa-based Kum & Go LC are utilizing social media for a competitive advantage.

Utilizing its recent study of c-store online brand presence and observing consumer social media conversations, Nix has served up six key realities to make social media the super highway to connect c-stores with their customers.

REALITY NO. 1: SOCIAL MEDIA IS MORE THAN TALK. IT IS ACTION!

The study revealed a healthy level of consumer search activity based on the total number of web searches in the convenience store category. Regional in scope, the searches validate the higher profile of national c-store chains 7-Eleven Inc. and Circle K Stores, the c-store banner of Alimentation Couche-Tard Inc., as well as QuikTrip Corp. These three brands show similar higher rankings in total number of social media mentions. However, super-regionals such as Wawa Inc. are also imposing themselves very effectively across the social media landscape, proving it is possible to play big without being the 800-pound gorilla.

The c-store category faces two strategic shifts simultaneously at a time when blurring channels increases competitive pressure. Chains and packaged goods manufacturers that effectively manage the transforming retail landscape will win the business of today’s savvier, more educated consumers.

The first shift involves the transition of shopping power to the largest and most potent generation since the Baby Boomers. The Millennial generation, aged 18 to 34, will achieve an estimated spending power of $2.45 trillion by 2015, and number more than 80 million or one-quarter of the U.S. population in that same time period. Millennials are the first generation where men claim to do most of the grocery shopping. Men are also more likely to shop alone on quick trips. That’s good news for c-stores where men are the more frequent shoppers.

The second shift, closely tied to Millennials, is the growing reliance on technology to shop. More than 90 percent of food industry executives agree that social media has completely changed the way consumers interact with their brand. This is especially true for Millennials, who grew up with technology. As toddlers, their little fingers explored VCRs and DVD players. Their adult fingers now plumb the depths of smartphones, tablets and desktops for instant gratification, continuous connectivity, community and seamless comparison-shopping. They use multiple communication tools to communicate often. Millennials want a personalized, relevant shopping experience.

The new dynamic is fully-in-charge consumers. Still, most retailers remain passive. They are not equipped to interact proactively. If anything, they attempt to force dialogue. Instead of one-sided conversations about themselves, retailers need to engage in active listening and then strategically insert their brand into the conversation.

Some c-stores are introducing mobile apps, but only interactive apps provide true connectivity to drive brand value, Nix cautioned.

REALITY NO. 2: YOUR COMPETITORS, EXISTING AND EMERGING, ARE ALREADY CONNECTING.

7-Eleven far outdistances competing c-stores in connecting with customers on Facebook and Twitter. Circle K hasn’t made much of a dent despite its national profile. That may make its relationship with Millennials more tenuous. Consider the following:

• Millennial primary grocery shoppers are 20 percent more likely than non-Millennials to rate a product on the web.
• They are almost 40 percent more likely to check out a brand they like on Facebook or Twitter.
• They are 80 percent more likely to like a brand that uses social media.
• At the same time, more than 50 percent of Millennials confess to being annoyed by brands on social media sites.
• Millennials search for authenticity in brands.

C-store competitors are also joining in the social media discussion from all channels. Drugstore, mass market, grocery and other retailers are a presence on social media. In addition, these competitors are luring consumers by co-opting c-store signature offerings, such as extended hours quick in-and-outs and convenient locations.

The white paper urges convenience retailers to develop a sophisticated social media strategy guided by someone other than a gaggle of 20-year-olds penned in cubicles deep within the office cavern. Tailor content for Twitter Facebook and other social media platforms to connect with what consumers are saying but don’t forget about long-term branding for short-term gain. Stay within message parameters to ensure brand consistency.

The best long-term results are gained when the consumer experiences the same brand whether through tweets posts images or messaging on your website.

REALITY NO. 3: BUSINESS INTELLIGENCE AND ACTIONABLE INSIGHTS AROUND SOCIAL MEDIA BENEFIT YOUR BOTTOM LINE.

With the right business intelligence insights around social media c-store brands and manufacturers can:

• Spot emerging trends early. 7-Eleven’s pilot of the Belly loyalty program at multiple locations either as a physical card or on a mobile device allows information to be scanned on an iPad located at the store. The customer then receives loyalty points and awards based on the individual retailer’s rewards programs a key way of attracting women c-store shoppers who favor loyalty programs.
• Understand promotional impact. Well-positioned promotions can go viral in social media quickly. Ideally, tie the promotion to gas or another item of high-perceived value to encourage the customer to visit and then link to an in-store item or activity to maximize the experience and profitability.

Promotions help push established products and pilot new products incredibly fast. If one person with 300 followers tweets a promotion, it can reach tens of thousands of customers in a matter of minutes via retweets. The market impact is rapid and profitable.

• Avoid costly complaints. Good news spreads fast. Bad news spreads faster. With social media, one bad experience can have serious, costly consequences. More importantly, they can seriously damage your brand reputation. Unhappy customers go elsewhere. This pricey downward spiral can be detected early and turned around.
• Turn product complaints into business intelligence. Mine negative comments and product reviews for priceless insights on product improvements from the manufacturer’s perspective. For marketers, these comments offer opportunities to respond proactively.
• Reveal unfilled needs and get in front of poor performance. A store that listens to customers can win their loyalty. On the other hand, if a specific store location receives several complaints, you can correct the issue before you lose customers.

REALITY NO. 4: C-STORE CUSTOMERS CAN BE SEGMENTED INTO DISTINCT TYPES.

As a whole, c-store customers are interested in easy access to the closest locations with a quick in-and-out service experience. By applying its proprietary segmentation algorithms to the data, Black Pearl Intelligence delineated the c-store shopper into five segments:

1. Highway Warriors — Commuters or frequent travelers. They regularly use c-stores for products and services.
2. Promotionals — Active seekers of discounts, special promotions and giveaways.
3. Product Loyalists — True blue seekers of specific product brands.
4. Combo Shoppers — Regular combo purchasers of in-store products and gas.
5. Store Brand Loyalists — Devotees to a particular c-store brand. Understanding these segments can be huge. Customer segmentation in the social media space informs highly targeted promotion strategies and messaging hierarchies. Understanding these segments allows you to pinpoint your online marketing efforts. Message precision and efficiency equates to effectiveness and more fruitful interactions with your customers.

REALITY NO. 5: THE MOST IMPORTANT WEB SEARCH TOPICS.

Understanding search clusters sheds light on consumer behavior and informs product and service hierarchy. The top three clusters are store attributes, purchases, and drinks and soda.

Store attributes include accessibility (walking, parking) and store location, as well as safety, theft/robbery, store design (new store, big store, remodel, well-lit, clean), and certain features such as ATM and cash convenience. Stores such as 7-Eleven, Circle K and Stripes, the c-store banner of Susser Holdings Corp., have more web searches in relation to store attributes.

C-stores can increase in-bound traffic by being where their customers are searching. Web searches indicate a consumer is looking for an immediate need. Store attributes are the largest cluster of consumer web searches. This cluster is driven by consumers seeking store locations and services, such as ATMs.

For c-stores to be found at the exact moment that consumers look on the web, the location must be set up correctly in local directories. Many c-stores have confusing or multiple names, or have ones that can be mistaken for gas-only stations. As a result of confusing online directory listings, you may miss in-bound traffic or there can be brand confusion.

Consumers search for products and services on the go with their smartphones. Local directories drive web search results. Your customers use Yelp, Google, Around Me, MapQuest, Google Maps and other popular desktop and mobile apps to find what they are looking for. These applications query results by pulling information from local directories such as Yelp, CitySearch, Yellowpages.com and Yahoo Local.

Leverage local directory listings to be when and where your customers are looking. Make sure detailed keyword-rich descriptions contain key products and services. And don’t overlook the wealth of comments consumers leave on reviews in listings and directories.

REALITY NO. 6: C-STORE CUSTOMERS ARE SHARING THEIR PREFERENCES ON SOCIAL MEDIA.

Share is engagement and engagement is extremely valuable.

Black Pearl Intelligence examined various keyword clusters for selected c-stores for associated social media mentions. The share of each cluster as compared to the total social media mention provides direction for the most talked about and important topics relating to c-stores across the social media landscape. The top two are store attributes, and drinks and soda.

Keyword social media cluster comparisons can provide timely insights into consumer preferences. For store attributes, the insight differs from that drawn from the high total in web searches. Consumers typically use web searches to find store locations. The level of social media conversations around store attributes indicates considerable buzz centered around the customer experience. This allows insight into what’s working and what isn’t.

For drinks and soda, the high concentration of discussion around drinks points to a product-centric appetite for social consumers. This nuanced information can lead to more targeted responses for unique products that resonate with co-branded promotions and messaging.

In conclusion, the growth in revenue and number of stores that the convenience industry has enjoyed over the past few years is now at a tipping point. Currently, there are more c-stores in the United States than warehouse clubs, supercenters, dollar stores, supermarkets and drugstores combined, according to Nielsen. But competitors are encroaching on c-stores’ lucrative territory. The challenge for the convenience store industry is to maintain its leadership position, and keep and grow the customer base. Smart retailers understand that consumers have fused online and offline realities, especially when shopping.

The key to profitability isn’t just to know what your customers want, but engage them in conversations.