What Consumers Want Out of C-stores & Other Small-Box Formats

NEW YORK — When it comes to shopping trips, consumers are faced with more choices than ever before. Specifically, more than 18,000 new retail stores have opened in the United States since 2007, according to The Nielsen Co.

Taking a closer look at expansion drivers, the consumer research firm found that the overwhelming majority (88 percent) of that growth has come from small-format stores: dollar, convenience and drug.

The dollar and convenience channels led retail expansion in terms of percentage of store count between 2007 and 2014. Dollar stores grew by 38 percent, followed closely by convenience at 30 percent, according to Nielsen's TDLinx database.

Using consumer responses about 68 small-box retailers to derive the Nielsen Store Equity Index (NSEI), the company compiled a ranking of brands for familiarity, connection and loyalty. Only one of the top 10 retailers by NSEI score is a national retailer, while convenience store chains took the majority of the top spots: Wawa Inc. (No. 3), Kwik Trip Inc. (No. 4), Stewart's Shops (No. 6), Sheetz Inc. (No. 7), QuikTrip Corp. (No. 8) and Maverik Inc. (No. 10).

"These findings … demonstrate how local and regional players are nimble enough to create deeper bonds with their shoppers," Nielsen noted.

According to Nielsen, small-box outlets stand out from other retailers. They meet specific shopper needs, serve a younger demographic and face a distinctive set of challenges. 

"Consumers make the vast majority of their small-box trips to meet immediate needs, so it's critical that retailers in this channel deliver on the promise of convenience, while meeting the specific needs of each shopper's trip — or they risk losing the shopper's future trips as well," the company explained.

Not everyone can compete in the space — something retailers have learned. Big-box retailers and grocers entering the small-box arena have seen successes and failures, with some large players exiting the space after only a short trial period.

"Knowing the intricacies of shopper needs and expectations with the small-box space is critical to future successes," Nielsen added.

ATTRIBUTES THAT RESONATE

As a part of its small-box research, Nielsen looked at 32 retailer attributes that drive store loyalty and store choice. These attributes correspond with convenience, price, product, experience and promise.

When it comes to basic needs, consumers are looking for a safe environment, clean store and nearby location. As for core needs, they are looking for good prices, well-stocked stores and trustworthy retailers.

The areas of opportunity lie with emerging needs, according to Nielsen. "Given convenience positioning for small-box retailers and their limited space for product differentiation, product assortment is secondary to other needs, but represents an opportunity to differentiate once other needs are met," the study found.

Not all small-box outlets are the same. Consumers, for example, perceive convenience stores to have a better assortment of prepared foods and beverages. As a result, "shoppers are much more likely to make a meal-time trip to those stores, while they're likely to visit drug and dollar stores for larger fill-in and routine purchases," according to Nielsen.