With recessionary times redefining where and why consumers shop, a distinct opportunity is opening up for convenience store operators wanting to become the pantry for this evolving consumer, according to Thom Blischok, president, Information Resources Inc. (IRI), Chicago.
Blischok, a speaker at last week's CSP CyberConference called "How's Business: Finding Hope in 2010," [image-nocss] said success in meeting the emerging, quick-trip occasion comes with a combination of finding the right product, creating the right assortment, keeping those items in stock and, most importantly, offering the consumers the right price-point.
Overall, retailers in all channels should expect anywhere from a 3% to 10% reduction in consumption, with shoppers often asking the question, "Do I need this?" For the c-store, it means spending will be flat through 2010, he predicted.
"Quick trips will continue to grow, but c-stores that lack the right assortment at the right price will be challenged to retain their fair share," he said.
C-stores today are not as competitive on price compared to Bentonville, Ark.-based retail giant Wal-Mart and segments of the grocery and drug channels. "C-stores must promote the idea that convenience can be competitively priced," he said, "even if they have to go back to their manufacturers to change the game."
But price is not the only ingredient in the value equation, Blischok said. Pointing to Oak Brook, Ill.-based McDonald's and its successful "Angus burger" launch, he said a good price, quality, a unique product in the marketplace and a familiar brand all play a role.
IRI's internal research shows that the value-conscious consumer is here to stay. In one study, 88% of respondents said they are worried about what will happen to the economy, indicating an "economic sobriety"; 85% are concerned about their personal, economic situation; and 78% want to stretch their dollars.
In shopping-behavior trends, 80% said that if they decide they don't need something, they won't buy it (a trend Blischok called "de-selection"); 75% looked for sales; 65% delayed purchases; 60% were reluctant to try new products; and 55% traded down for store brands or lower-priced items.
He said that c-stores in particular should focus on the trend by consumers to avoid new products. That trend may influence the balance of old and new products retailers carry in their stores.
Providing solutions to shopping occasions is also part of the answer. Blischok gave a list of examples:
Game Day. Grouping and pricing needs for college- and professional-football parties, including not only food items but paper products.
Mom Emergencies. Single-pack diapers and wipes for on-the-road, clean-up needs.
Cold Season. Pairing health-and-beauty remedies with displays of juice.
Health Stops. Reshaping the store as a quick destination for healthy options, such as smoothies and other better-for-you snack items. The topic of confection in particular came up as a representative of Hackettstown, N.J.-based Mars Chocolate North America, sponsor of the CyberConference, examined the impact of the economy on the category. Noel Vacanti, who is in charge of strategic insights for the company, said that its highly popular Snickers bar brand took a hit, correlating directly with the rise in unemployment. The company has since addressed issues with advertising and promotion, developing a "Real Chocolate Relief" display and focusing on price to boost overall sales.
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