Consumer goods brands have long treated convenience stores as a weak sibling to their higher volume channels like grocery and big-box retailers. However, the fact is most C-store SKUs bring in higher margins. CG impulse items are a more natural fit for high-velocity convenience retail, which means great untapped growth potential for the brands that fit that profile.
New C-store data capture and analytics systems now enable targeted promotions that can drive those turns and margins even faster. These data systems enable integrations with geo-specific mobile ad platforms, fuel savings mobile apps and loyalty rewards programs. Just as importantly, these platforms tie into the C-store POS data feeds to provide full lifecycle visibility into program performance and ROI.
Even in the depths of the pandemic — or maybe because of it — C-store sales grew even while trips were declining. While no causal connection has been made between the lifestyle changes motivated by the pandemic and the new purchasing patterns, there is a chance this growth is now locked in-to behaviors. This may be the one bright spot in an otherwise challenging retail landscape, especially for CG items that tend to be low involvement purchases.
The C-store channel has often been an afterthought in suppliers' merchandising plans, which means it is as close to a greenfield as the industry has seen in a long time. It is also a more natural fit for promotions to drive purchase of impulse items than the more intentional shopping dynamic at groceries.
Perhaps the greatest reason for overlooking the C-store channel was the inability to track and quantify performance. Now that has changed.
The Fast Lane: New C-store Analytics Systems
The kinds of market intelligence systems that are standard for major groceries and big box retailers are now being deployed at C-stores. These connect ERP systems to the POS for a lifecycle view of inventory turnover. In fact, because of the unique dynamics of C-store shopping behaviors, the C-store analytics systems boast a level of granularity that is often hard to get at in grocery and big-box retail.
However, like larger grocers, C-stores have integrated and leverage these systems with their loyalty programs and related mobile apps to drive store traffic and merchandise turns. In addition to giving CG marketers more levers to field promotions and drive volume through the channel, this also enables brands to enrich data across channels.
In at least one case, these systems are now connected to a gas savings app that also serves ads and promotions. This extends CG manufacturers’ ability to push promotions to out-of-home consumers at specific locations at specific times of day. This assures that promotional messaging is both more relevant and more actionable.
Driving More Sales
The C-store data landscape is further enhanced by the literal landscape. While there are 40,000 grocery stores in the U.S., there are 150,000 C-stores. This adds an overlay of geographic granularity to the data that can inform all kinds of strategic insights. Manufacturers can optimize product availability according to local preferences for variables like flavors and sizes.
The sprawling footprint of the C-store also means merchandising programs can be rolled out in a more graduated and scalable way. The data captured in one region can be used to guide projections for program expansion, rolling all the way back to ERP operations. Such optimizations can drive meaningful increases in both volume and profitability.
The detailed time-stamping of the data is another quality that can be leveraged to better understand the impulses that drive purchases. The smaller basket sizes help isolate related itemsets that can inform bundling and cross-selling opportunities.
The unique promotional tactics available in this channel enable efficient demand generation that is not practical — or sometimes not even possible — in other channels. Capabilities like leveraging real-time transaction data to deliver digital coupons or using day-part purchase data to inform digital advertising is unique to the C-store data sets.
CG manufacturers looking for business growth opportunities would be well-served to take a closer look at what’s happening in the C-store space. Between the deployment of new data capture and analytics systems and promotional platforms uniquely suited to the segment, CG brands have all the tools they need to maximize revenue from the growing C-store channel.
Jamie Hudson is senior VP and GM, offers and insights, at PDI.