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NEW YORK -- C-store operators should recalibrate their offer and marketing plans as consumers’ confidence about their finances and the country’s economic recovery is strengthening, according to a new survey of retail spending and trends from Deloitte.
Nearly two-thirds of the more than 1,050 consumers surveyed May 1-3 said their household financial situation is the same or better compared to a year ago, while more than one-half believed the economy started to recover from the recession, compared to less than one-fourth of respondents to a similar survey last October. In addition, nearly two-thirds of respondents said they are planning to spend the same or more at retailers this year.
“We see the trend in impulse purchases in convenience stores starting to improve and the consumers’ [more optimistic] attitude is certainly a benefit, but consumers are still cautious,” said Scott Erickson, partner at Deloitte’s retail practice. “While shoppers are willing to spend a bit, they are still sensitive to broad economic events and prices.”
Despite their growing confidence, consumers are still concerned about the “what-ifs.” More than half (54 percent) said rising energy prices could cause them to hold back their spending in coming months; more than four out of 10 said higher taxes (45 percent) and lack of improvement in the job market (41 percent) could do the same. More than one-fourth of the respondents believed the economy is recovering, but may fall back into recession.
“Certainly, with the consumer [worrying] about energy prices, convenience store operators will watch the price of gasoline closely,” Erickson said. “Though it’s very volatile, and the crisis in Greece and the potential slowing of China’s economy makes the market challenging to predict.”
Unlike some other retailers, convenience store operators have an added challenge of convincing customers their in-store prices are competitive, Erickson said. “The need for quick and easy products won’t go away,” he said. “But it will be a matter of how to lure the customer to the store and ensure it is the one supplying them when they do need something quickly.”
Private label may be a way to offer both convenience and value pricing, he noted.
In terms of shopping behavior, the survey showed consumers are increasingly tapping into Web, social and mobile technology, all of which greatly influence where they shop and what they buy.
-- The Web has become an integral part of the in-store shopping experience, with 75 percent of consumers indicating they look online for store, price or product information before or during in-store shopping.
-- More than half (56 percent) of consumers use social networking sites such as Facebook and Twitter; among them, more than four in 10 interact with retailers to get promotions, review recommendations and gather other information.
-- More than one in five (21 percent) consumers have used a Web-enabled mobile phone in the shopping process. Forty-four percent of those shoppers said they use phones to find an address. Another 35 percent use their phones for price comparison.
“Others download coupons over their mobile sites,” Erickson noted. “There are many interactive ways c-store operators can meaningfully reach out to customers. Whether ensuring stores’ names show up in GPS navigation systems when looking for a gas station or through the creation of iPhone apps.
Given consumers’ recent spending activity and improving outlook, retailers need to invest in ways to drive loyalty, such as analytics that allow them to make merchandising, staffing and inventory decisions as customer demand shifts. Many retailers are looking to further localize product selection, promotions and pricing scenarios to deliver a customized shopping experience, he noted.