Insights: How to Get Shoppers into Your Store (Hint: It’s Not Foodservice)
The most basic challenge of the c-store operator is getting shoppers on the lot and then into the store. For the past 50 years, c-store operators relied on two categories to entice shoppers: gasoline and cigarettes. Unfortunately, every reliable indicator confirms that both categories will decline in shopper visitation into the foreseeable future.
So how does the c-store operator compensate for the visitation rate declines of these two major categories? Almost everyone is focusing on transforming the convenience store into a competitive location for immediate-consumption food, especially during breakfast and lunch day-parts. This is a daunting task given the numerous highly competent competitors such as McDonald’s, Subway and another hundred national, regional and local competitors any one of us could identify on the fly.
Not only is fresh food a competitive challenge, it is also a major operational challenge. Keeping abreast of inventory issues, spoils and the constantly evolving local health and sanitation regulations is a headache of major proportions. For years the industry has talked about foodservice as a magic bullet to buoy traffic and sales. Some are succeeding, while others are learning that it simply is not part of their core competencies.
So what’s the alternative? A great opportunity actually exists in a category that’s already incredibly important to the industry: beverages. Every mortal must ingest fluids regularly throughout the day. Beverage preferences are becoming so diverse that the quick-service restaurants mentioned above cannot possibly meet all of the highly personalized needs of today’s demanding beverage consumer.
This is not your grandfather’s beverage category. In just the past 20 years—no, make that 10 years—the beverage category has developed large and complex subcategories ranging from sports drinks to energy drinks and now countless sub-subcategories under the functional umbrella. Various benefits are blending to form niche segments highly desired by certain demographics, especially younger shoppers, females and health-conscious consumers. Societal trends are driving the category in whole new directions that are hard to predict and even harder to manage at the store level. New flavors, ingredients and brands appear and then grow with remarkable speed, driven by low-cost social network recommendations and “likes.”
The average c-store operator probably carries around 300 different SKUs of beverages spread across six to seven identifiable subcategories. New products emerge almost hourly in this dynamic category, and the operator who manages it correctly has a fighting chance of compensating for the declining traffic from cigarettes and gasoline. Conversely, the operator who treats it as business as usual is asking for real trouble.
The vendors themselves are struggling to keep up with the pace of change in the beverage category, but they do have information that can help the c-store operator manage this complex and dynamic area. Most major vendors have sophisticated store-clustering approaches that help operators of small chains to understand the potential differences in beverage consumption among their individual store locations. Some vendors and brokers have the capability to create and manage individual store assortments using sophisticated analytics and remarkable plan-o-gram software.
The c-store business is more competitive than ever before. Mastering the beverage category and using valuable cooler space efficiently is one of the top strategic challenges—and opportunities—every c-store operator must face. Lean on your supplier partners for category-management assistance, track consumer trends and temper those trends with a strong analysis of the longevity of the trend. You may not realize this because of the frenzy over a better sandwich program or the growth of e-cigarettes, but I can assure you that this once-simple category is one of the keys to long-term success in the c-store business.