NATIONAL REPORT — Lower foot traffic usually means lower impulse sales, but this doesn't have to be the case.
Although consumer behavior has changed, whereby today's convenience store shoppers demand an omnichannel experience, one truth still reigns: the right offer at the right time can have a major impact on a retailer's bottom line.
According to an AlixPartners study released in January that surveyed 1,001 adult U.S. consumers, convenience store visits remained low as 29 percent of respondents said they didn't make even one visit to a c-store in the past week. Even looking ahead to the next six months, 26 percent said they would stay away from c-stores, while 20 percent said they would visit three to four times a week, and just 15 percent said they would visit at least daily. The highest percentage — 39 percent — said they would make one to two visits per week.
Conversely, the AlixPartners 2021 Convenience Store Industry Outlook study found that c-store consumers across all age groups expected to order more deliveries over the next 12 months than they did in the previous 12 months. Additionally, 23 percent of the consumers who participated in the study said they used curbside pickup in the past six months.
"The good news for c-stores is that the pandemic has squeezed five years of progress into seven months," said Eric Dzwoncyk, global co-leader of the restaurants, leisure and hospitality practice at AlixPartners, a business consultancy. "By focusing on loyalty programs and delivery services, c-stores have closed the gap with other retailers, especially QSRs [quick-service restaurants]. As a megatrend, convenience is only going to get bigger. Who's better positioned than a good convenience store?"
Today's convenience channel operators must account for this major shift in consumer purchasing behavior, which is anticipated to continue post-pandemic. Adapting is especially important for impulse-driven categories — namely, candy and snacks.
Shoppers expect personalized, relevant marketing, and they're looking to be met outside of the store, online, and through mobile apps and loyalty programs.
EFFECTIVE E-COMMERCE SOLUTIONS
Although the pre-pandemic world was largely defined by e-commerce, the coronavirus pandemic accelerated the digital domain, taking it from a convenience to the norm.
"An effective e-commerce solution allows [operators] to leverage digital advertising much more effectively than in-store, as a potential customer can make a purchase decision immediately upon seeing an advertisement," Vroom Delivery founder and CEO John Nelson told Convenience Store News. "For example, say that a customer sees an ad on Facebook for a particular candy bar that they want. Rather than having to get into their car and drive to a store to buy it — or, worse yet, potentially going to a competitor to do so — they can click on it, buy it with a few taps, and have it delivered without having to leave their couch."
Impulse buys account for a large portion of the candy and snacks that find their way into online baskets. On average for both pickup and delivery orders, this category is in the last third of items added to a cart prior to checkout, data from Vroom shows. Vroom Delivery is an e-commerce solution designed specifically for the needs of c-stores and small markets.
"In other words, candy and snacks are often the final items that people add to [their] cart before checking out," Nelson noted. "Furthermore, when prompted during the checkout process, up to 15 percent of customers add an additional snack or a beverage to their cart because of upsells, cross-sells and suggestive selling."
On an average delivery order, 23.7 percent of all baskets contain at least one item from the candy and snacks category, according to Vroom Delivery figures. About 5 percent, or $1.50, of the basket is snacks/candy by value, and 8 percent by number of items.
On an average pickup order, 9 percent of all baskets contain at least one item from the candy and snacks category. About 2 percent, or 49 cents, of the basket is snacks/candy by value, and 3.2 percent by number of items.
Because candy and snacks are typically one of the top-selling categories amongst loyalty customers, and c-store customers in general, a best practice for mobile/online ordering is to target customers with candy and snack add-on items, according to Jeff Hoover, data insights strategist for convenience stores, at Paytronix Systems Inc., a Newton, Mass.-based company that provides software-as-a-service customer experience management solutions for convenience stores and restaurants.
"Not only can we use this to build check size, but since we have historical transactional data on these customers, we can again target specific segments and only present offers for certain products or categories to those people who have not purchased these products before, or at least give smaller offers to other customers and avoid cannibalizing sales," he said.