In an age where many brick and mortar businesses are facing existential challenges, convenience stores have emerged as a steadfast symbol of adaptability and innovation as they combat the unique challenges of being an essential brick and mortar business in an increasingly online world.
Personalization
There is no other type of business that holds the vast of amount of Stock Keeping Units (SKUs) within such remarkably limited square footage. Where consumers have an abundance of choices for refueling or indulging in their favorite snacks, the question arises: how do convenience stores manage to distinguish themselves in such a saturated market? The resounding answer is personalization. C-stores that employ a data-rich enrollment process for their loyalty programs ensure they have a treasure trove of customer insights at their fingertips. Arming themselves with demographic information and shoppers’ preferences, they can craft promotions and rewards that feel tailor made to individual consumers, fostering a sense of exclusivity and value.
Let’s say a millennial female loyalty customer is scrolling through her phone while she is refueling. The retailer can automatically send her a text with a personalized promotion for an item inside the store. If every pump customer gets the same promotion, the redemption rate will be lower, but since the system knows she is a health-conscious consumer, she will get a promotion for something like a healthy yogurt brand, thereby increasing the likelihood she will come inside to redeem. This personalized, bespoke approach not only increases the likelihood of customers redeeming the offer but also studies have shown it substantially increases the size of their shopping baskets as they make impulse associated purchases. This is the essence of personalization at its finest, creating a win-win situation where customers feel valued and special, while retailers bolster customer retention and revenue streams.
Embracing future technologies, not running away from them
With convenience stores selling 80% of the fuel consumers purchase in the US, the obvious cornerstone of convenience stores is fuel, therefore the rise of electric battery vehicles would appear to be a direct threat to their survival. Convenience stores rightly decided to pivot away from that reductive narrative. While fuel is typically the primary reason customers visit convenience stores, the diverse and expanding range of inside offerings, coupled with a substantial increase in foodservice options over the last decade, has consistently attracted customers to spend more within the store than ever before. Instead of fearing the rise of electric vehicles, many convenience stores are embracing electric vehicles in droves with some introducing EV charging hubs at select locations.
By 2028, electric vehicles are predicted to account for 23% of new vehicle sales. Electric vehicles are here to stay and a robust charging infrastructure is crucial to meeting those demands, which c-stores are uniquely qualified to meet. C-stores can make charging vehicles into an “experience” by incorporating charging amenities such as consumers purchasing a “charging package” from their mobile app and getting their favorite drink and snack delivered to them curbside while they charge, or retailers can offer tiered rewards thru their loyalty program based on how long their vehicles charge.
Sustaining Pandemic-Era Trends: What’s Here to Stay
Much like fuel, retailers have long been able to rely on tobacco sales as one of their top categories, but with only 11.5% of smokers in the US as of 2021 and with that number continuing to trend downwards, shops have pivoted to increasing their inventory of smokeless tobacco products, e-cigarettes, and HNB devices. In addition to prioritizing less harmful smoke products, many tobacco companies offer robust reimbursements and promotional discounts to stores who provide tobacco scan data, and stores with loyalty programs that can provide important customer data and habits attain access to even bigger reimbursements and funded promotions to pass along to their customers.
Prior to 2020, convenience stores were already in the midst of rapid digital transformation, but the pace only intensified in response to the pandemic. Convenience retailers have now seamlessly integrated online ordering and many are now offering subscriptions, extending the concept of “convenience” well beyond their physical locations.
Conclusion
The convenience store industry continues to be a true David and Goliath story. Single store and small chain operators have defiantly held strong against not only their big chain competitors, but also competing sectors. Retailers who have successfully weathered the rapidly changing digital market are the ones who utilize a robust and profit-generating loyalty program, data-driven strategies, user-friendly interfaces, and embrace future technologies and trends. Convenience stores are emerging as beacons of success in the digital age, offering valuable lessons that transcend industry boundaries. As these establishments continue to redefine convenience and reshape consumer experiences, they serve as a testament to the enduring spirit of entrepreneurship and resilience, proving that even in the most competitive landscapes, innovation paves the way for triumph.
By Ali King is the Marketing Director at Electrum Loyalty
Ali King is the Marketing Director at Electrum Loyalty, a prominent leader in loyalty solutions for convenience stores. With a foundation in Business Development, Ali’s creative background as a professional actor seamlessly integrates into her role, where she excels in crafting compelling video content, driving brand growth through innovative marketing campaigns, and pioneering training initiatives.
Ali is also the host and producer of Loyalty Beat, a globally recognized podcast tailored for c-store retailers seeking to optimize their loyalty practices, with listeners spanning nine countries.