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Ah, Bubba. Near and dear to the convenience store retailer's heart, Bubba is a mainstay of the c-store industry. That white, blue-collar male in his mid-30s looking for a quick snack, some beer and a pack of cigarettes is what this industry was founded on. But taking a walk through a convenience store's front doors these days, one might find some new faces popping up among the c-store aisles. Somewhere between the low-carb section and the enchilada roller grill, a new convenience customer has emerged.
"The traditional shopper in c-store retail has definitely changed," said Kim Harten, director of operations for Sun-Up Food Stores, an eight-store division of West Monroe, N.Y.-based North Shore Oil. "As life roles, responsibilities and families change in our neighborhood, so does the face of our convenience store."
This change is not necessarily a bad thing. In fact, in terms of profit potential and market reach, it's the greatest thing to hit convenience stores since flavored beef jerky. Retailers are adding new products and launching new avenues of business to make their stores friendly for rising consumer segments such as women, Hispanics, senior citizens and even children — and Bubba is still welcome any day of the week.
"C-stores have been evolving over the decade into veritable mini-malls of convenience," Harten said. "The selections have become more varied and customer-service standards are ever reaching higher. This can only benefit customers, both the traditional and non-traditional."
As convenience retail enters this new era of profitable customer evolution, will Bubba eventually be booted out of the lineup? Not likely. "Bubba certainly exists," said Gerald Lewis, a New York-based c-store industry consultant and former principal for CDI Group. "Bubba's needs are to get a beer or cigarettes or a snack of some kind quickly. But a lot of other people have those needs as well."
The problem with servicing Bubba's needs only, Lewis said, are that those are the areas under threat today. Organizations like Mothers Against Drunk Driving (MADD) have forced a lot of stores that used to have barrels in the front of stores with beer on ice to stop selling single-serve alcohol. Cigarettes are under attack due to health concerns and impending federal regulations, and even snacks and candies are threatened, as more and more people watch what they eat. "Convenience stores basically have realized there isn't a heck of a lot of future in staking their whole business in these areas," Lewis said. "They have to begin to serve some other needs."
The demands of modern-day living have increased the need for what convenience stores offer in selection, service and quality. The retailers that strive to meet those needs are the ones leading the pack in the c-store business today. "Convenience stores started out thinking as convenience store operators, and now the progressive ones that are doing well have realized that what they are is retailers," Lewis said. "This is a very big change, because someone said long ago that retail stores aren't places for kinds of people, they're places for needs or occasions. What you have to be talking about is the typical needs that the convenience store serves and who those likely customers are — and how the needs of those customers are changing."
One inkling of concern is that the core c-store shopper, Bubba himself, has noted less satisfaction with his typical convenience store visit. "Realities of the Aisle," a study conducted earlier this year by Envirosell in conjunction with Convenience Store News, found that young men under age 24 visited c-stores with the greatest frequency, but were also consistently the least satisfied with the stores. Armed with cameras and questionnaires, Envirosell researchers observed 12 c-stores from four chains for two days each to track and interview c-store customers. The researchers indicated from their findings that late hours and fresh food choices might entice more satisfaction among that younger male demographic. In fact, 18 percent of customers overall said they would be compelled to shop more if the store had extended offers in the foodservice category.
Lewis cited Wawa Inc. as a leader in bringing excellent foodservice to its customers, and Nice 'n Easy Grocery Shoppes for providing fill-in groceries to meet the demands of its small-town customers in upstate New York. Filling these universal needs won't alienate Bubba, but it will spark interest from new customer groups.
"If you look at the whole convenience store operation as a retail store, then you have to focus on what needs you can serve that are maybe underserved in your area," Lewis said. "Don't worry whether it's Bubba that you're serving or anyone else, because if Bubba has those needs, Bubba's going to come in regardless."
Historically, convenience stores have had difficulty attracting and retaining the female shopper, in large part because their focus was set on that core 18- to 34-year-old male customer base. Today, women are playing a bigger role, as more and more women enter the workforce and demand quick convenience in their shopping needs.
"Women are increasingly interested in convenience store shopping," Harten said. "The wide range of selections, new product introductions, family-sized food selections and quick in-and-out service are among the concepts that continue to build loyalty of female shoppers."
The Envirosell study found further evidence of the female shopping behavior in c-stores, proving the importance of this increasingly powerful consumer segment. According to the study, women shop slightly more in-store sections than men, buy slightly more products on average and have higher rings per transaction. Women spent an average of $5.88 per transaction, compared to men's $4.72.
The women surveyed in the study also spent more time in the store (two minutes and 30 seconds vs. men's two minutes and 18 seconds), and overall ranked various store criteria higher than men. Female shoppers gave significantly higher ratings than men to criteria such as "fast service," "pleasant store experience," "ease of finding products" and "variety of products that I want." This means that while women are a proportionately smaller customer base, they are more careful and deliberate shoppers who are spending more bang for the buck in the store and extremely satisfied once they leave.
Women were also more attracted to the coffee station and tobacco than men, as well as full-service food areas and fountain areas. These findings lead to implications that these product offerings may be the key to securing return visits from that all-important female shopper base.
A Multicultural Mix
As the minority population in the United States continues growing at astronomical rates, it is imperative that the c-store industry begins to take note of who is shopping in itsstores. In order to have success marketing to the multicultural community, c-store operators must have a clear understanding of the demographic population that each of their stores is catering to, be it Hispanic, African-American, Asian-American or any other group. (See "Strong and Growing," Page 89.)
In the Envirosell study, 51 percent of respondents cited "convenient location" as the most important factor in choosing a store. About one-third of the shoppers lived within a mile of the stores, 25 percent more lived within five miles of the stores, and another 25 percent lived more than 15 miles from the stores. Even those living farthest from the stores generally worked near the stores, according to Envirosell researchers.
Knowing the market around the area of the store is essential to efficiently meeting the needs of any c-store's "traditional" customer base. "Any business that is successful must cater to the needs of their customer base both in product selection and marketing — the successful c-store operation is no different," Harten said.
"With multicultural customers, the goal is to make folks feel comfortable in your store," said David Morse, president and CEO of New American Dimensions LLC, a Los Angeles-based multicultural marketing firm. "If you have people working behind the counter that they can relate to, it makes a difference. People in the majority don't think about race, until they are surrounded by people who are of a different race than them. Minorities are very tuned in to being included."
The boom in the Hispanic population over the last decade is a force that c-store retailers recognize. "In Florida and the Southeast, we've seen an insurgence of new customers in the Hispanic segment," said Mitchell Rhodes, president of Jacksonville, Fla.-based Gate Petroleum, which owns and operates more than 100 stores. "We don't have a Hispanic aisle or anything like that, but we have changed up our product mix a bit to cater to that growing customer group."
Rhodes said the key is to integrate the Hispanic-geared product offerings with other products in a category, so as not to alienate the shopper to one particular area of the store.
Another key to the Hispanic market is freshness. While many Hispanic immigrants may tend to shop only at their local Hispanic market, as they become more accustomed to U.S. culture, they start looking for freshness in other retail channels. "They're already going to the supermarkets, and as they acculturate they are going to the Wal-Marts and eventually make their way to the convenience stores," Morse said. "And 'fresh' can be things you'll see at the convenience store —bread, milk, eggs, butter, etc. That's not to say they're not still buying the same stuff as Bubba. They're still buying the beer and cigarettes, but they're also buying the eggs and milk."
Once a convenience store has made an impact on the Hispanic community, word travels fast. Morse said he spoke with a c-store retailer in Texas who said he has had success marketing to Hispanic immigrants just by adding Churros, a Mexican doughnut, and Atole, a nut-flavored drink made out of cornmeal, to his product mix. "Word gets around that they have these Mexican products, and now his store is the place to be," Morse said.
Maintaining a balanced spreadsheet of products to cater to these different customer groups is the tricky part. Having an overabundance of Hispanic-targeted food products or female-targeted HBC items may deter core customers from feeling comfortable in the store, but subtle additions here and there may be enough to satisfy all groups.
"We were seeing $40,000 in lost profits per month after the tobacco regulations hit," said Jerry Smith, director of operations for U.S. Oil's Express Convenience Centers, a 22-store chain based in Combined Locks, Wis. "We've now regained $26,000 of that back through a combination of new product offerings that we're seeing tremendous success with." The chain has introduced several new product varieties to make up for those lost dollars, including prepaid cards, homemade candies, premium cigarettes, flavored coffees and cappuccinos, energy bars, low-carb snacks, sandwiches and fresh-brewed teas. Smith said as more and more working mothers began coming to the stores, they added more frozen items for quick-fix dinners, coffee varieties and fitness-conscious snack items. The roller grill has also proved a hot bed of new products, including Mexican tortillas, burritos, egg rolls and roller hamburgers. "They're used to be only hot dogs on the roller grill, and now there are so many other products, the hot dogs are being put on the back burner," he said.
But with all of these new products aimed at attracting new customers to the store, is the traditional convenience customer being underserved? Smith doesn't think so. "Bubba might be tripping over some of this new stuff on his way through the store, but the fact of the matter is he's still coming in and he still is buying the same stuff he used to. But now we've opened up our options to serve some new customers as well," he said.
Products aren't the only way to keep those new customers coming into the store. "Our traditional shopper is indeed the 18- to 35-year-old, blue-collar male, but there are definitely new groups we've been targeting," Rhodes said. "We've always done well with the white-collar business crowd, and now we've really been trying to reach out to females, children and older shoppers."
Rhodes said his company builds facilities with spacious aisles, bright lighting and clean bathrooms to keep the stores attractive to these newer convenience customers. To add an element of safety for female and older customers, gas dispensers are grouped in large numbers, and store employees will pump gas for a customer on request.
To bring the younger generation into the store, Rhodes said the company reached out to the community as a whole. "We implemented a Student of the Week program with some of our local schools," he said. "That not only brings us out into the community and puts us face to face with customers, but it brings these younger customers into the store and introduces us to a new younger audience."
Rhodes is confident, however, that Bubba is still the king of the c-store as far as dollars are concerned. "We still have bigger bulk displays of beer and more beverage coolers to cater to that regular convenience customer," he said. "He's also still buying cigarettes, though he's not as brand loyal as he used to be."
While some c-store operators have taken these new customer segments into account, those still catering to Bubba — and Bubba alone — may suffer in the long run. "There's so much missed opportunity out there in the c-store business today," Smith said. "You've got to stick your neck out there and do whatever you can to have new pennies coming in the front door daily."
Just feel confident knowing that Bubba will still be walking in right behind them.