The Incredible Shrinking C-Store Trip
Exclusive look at latest VideoMining heat-map research shows more traffic, less time and spending in stores.
Can you make a sale in 90 seconds or less?
Pretend you’re on the TV show/speed challenge “Beat the Clock,” because that’s approximately the time the average consumer actually shops a c-store.
“If you think about the time retailers and manufacturers have to influence shoppers, it’s 1 minute, 25 seconds,” says Priya Baboo, executive vice president of shopper insights and strategy for Video- Mining Corp., a research firm based in State College, Pa., that has quantified this slim retail window in its groundbreaking, annual C-Store Shopper Insights Program.
“You have to do whatever possible to influence shoppers,” she says. “First of all, capture their attention, influence them to consider the category and push them to make that sale.”
The latest version of this study, shared exclusively with CSP, reveals a troubling trend, one that jeopardizes ordinary c-stores not attentive to delivering a strong first impression. Namely, our customers are spending less time in the c-store.
Consider it the incredible shrinking c-store shopping trip. In 2010, the total average in-store visit measured 2 minutes, 21 seconds long; in 2011, this figure dropped to only 2 minutes, 1 second—a 20-second decline.
The shrinking shop is exacerbated by this in-and-out measure: From 2010 to 2011, there was a 6-point increase in the percentage of customers who spent less than 1 minute—total—in the store. Considering that about 70% of the average c-store trip is spent shopping, retailers had only 40 seconds to spur a sale.
According to VideoMining, this decline was accompanied by a 2% slide in average basket size, to $5.59. In fact, the number of shoppers spending less than $2 per visit grew from about 28% in 2010 to 33% in 2011 [CSP—Sept. ’11, p. 95].
“This is a hypothesis,” Baboo says, “but it looks like … there is a direct correlation between less time and smaller baskets.
“People don’t have more time on their hands, and even if they do, they don’t want to spend more time in the store,” she continues. “If I go down the candy aisle, I may be tempted to buy.” It’s a phenomenon that VideoMining, which also conducts research in the grocery channel, is seeing across all types of retailers—but it is hitting c-stores the hardest.
In this exclusive report, the pages ahead feature highlights from VideoMining’s 2011 C-Store Shopper Insights Program. Last spring, the firm captured
shopper behavior thanks to a combination of technologies. Ceiling-mounted video cameras installed at c-stores from five of the channel’s largest chains— including Circle K, BP/ampm and Cumberland Farms—tracked customers’ movement, while video-analysis software processed hours of c-store shopping trips to generate heat maps of store traffic and shopper activity.
The data was then cross-referenced with point-of-sale data to reveal insights about the average c-store shopping trip and purchasing rates by day-part, category and in-store area. The 2011 research, which encapsulated about 2 million shopping trips, included the participation of several CPG firms, including General Mills, The Hershey Co. and Sara Lee Corp.
While the c-store shopping trip and basket shrank in 2011, there was some good news. Traffic—the number of customers entering the stores—jumped 18%. Unfortunately, less of this store traffic converted into shopping and making a purchase; in fact, traffic-to-buyer conversion was off 7% vs. 2010. High-impulse categories, such as candy and snacks, saw already low conversion rates plateau.
“It tells you even though they’re walking in the store, even though they’re exposed to signage near the sales counter, they’re not paying too much attention,” says Baboo.
So how can retailers and their vendor partners get customers to spend more time and money? Here are a few leads for 2012:
- Bundle to build the basket. While first-destination categories such as beverages and foodservice offer a powerful opportunity to get more mileage out of purchases, not enough retailers are following the practice, says Baboo. It can be especially powerful when targeted at high-conversion day-parts. (See p. 48.)
- Treat primary aisles as media. Although 80% of shopping took place in the primary aisles, coupled with a 40% jump in shopping this area, there was a 6-point drop in shopper-to-buyer conversion. Baboo suggests that retailers and vendors are focusing too much on secondary displays and neglecting the main stage for purchase decisions: “Retailers may have the product, but the sheer fact that shoppers are not able to find it might have caused shopper leakage for the category.” (See p. 47.)
- Establish a good assortment at the sales counter. This powerful real estate saw a 6-point drop in traffic-to-shopper conversion, most likely because of faulty assortment or giving featured play to products that don’t deserve it. (See p. 47.)
Many of the fixes, Baboo acknowledges, sound deceptively easy, but she argues that even small changes, slight improvements and easy fixes will move a retailer that much closer to strong sales and customer loyalty.
“You already have so many people walking into the store, and you’re not converting them, especially when the basket is extremely high,” she says. “You only have 65% of people buying, and what happens to the remaining 35%? Even a slight increase—1% to 2%—will directly impact the bottom line.”
In-store baskets including foodservice are 14% higher than those that don’t, says Jill Boyce, director of shopper insights for Sara Lee Corp., Downers Grove, Ill. “Foodservice does a better job converting shoppers to buyers than other large categories such as carbonated soft drinks, salty snacks and candy,” she says. “And, after salty snacks and fountain beverages, foodservice is the next most important destination in the store.”
The sophistication of a retailer’s foodservice program weighs on everything from the amount of time a customer spends in a store to how efficiently he is converted into a buyer. According to VideoMining research, c-stores with a quick-service restaurant (QSR) type program converted twice the number of customers into buyers in less time than those with simpler programs. These customers know the menu and need less time to order.
Average in-store basket indexed higher in stores with prepackaged food items, and these sites also saw the longest checkout times. Both the QSR-type sites and prepackaged proved to be destinations for higher-ticket items such as cigarettes, which speaks to their higher basket.
Sites with a roller-grill program, meanwhile, saw the lowest traffic-to-buyer conversion rate and basket. For these locations, the roller grill has been a breakfast-and-lunch-only option. “These stores are clearly missing out on the after-work opportunity,” Baboo says. “The number of items on the grill reduces from lunch on and by the time it’s 4 p.m., it’s empty and there’s nothing there.”
Salty Snacks & Candy
While the traffic-to-buyer conversion rate for candy and snacks stayed the same from 2011 vs. 2010, each category saw different outcomes in other metrics. For example, customers spent 10% less time shopping candy, but candy baskets rose 9%. Salty snacks, meanwhile, saw no change in shopping time but grew buyers by 8% and sales by 14%, indicating true sales growth.
As VideoMining examined the video and sales data for these shops, it discovered that demographics such as gender, ethnicity and age play a much lesser role in the purchase decision-making process than occasion. At lunch, candy competes with sweet snacks, bakery and salty snacks, while during the after-work snacking occasion, candy competes with cookies and crackers. Retailers can harness this dynamic by customizing displays and promotions to particular day-parts and occasions.
Of total store traffic, 58% of customers in the 2011 study shopped beverages—packaged and foodservice-related—immediately after entering the store, according to VideoMining. Of categories ranking highest in engagement-to-purchase conversion—with the average category indexing at 100—beverages including beer, fountain, carbonated soft drinks (CSDs) and hot beverages made a strong showing. With beer enjoying the highest engagement-to-purchase conversion rate, its greatest opportunities lie in building store traffic and upselling customers to higher-ring brands.
“How do we ... take that trip to include something beyond beverages?” asks Baboo. “This goes back to building baskets.”
Interestingly, placement of the beverage cooler proved a key to this dynamic. Some of the sites had coolers situated on the side of the store as a convenience to customers. “Because a lot of trips to c-stores are driven by beverages, shoppers would make a beeline to the beverage coolers, and we saw the rest of the store, which had products such as salty snacks and candy, did not get a lot of activity,” says Baboo.
As Jill Boyce, director of shopper insights for Sara Lee Corp., observes, “There is a significant opportunity to bundle foodservice purchases with beverages and snacks. As an example, 41% of foodservice purchases at c-stores do not include a beverage. We also know shopper conversion and basket size significantly increase when stores orient the roller grill facing the beverage coolers.”
The C-Store Shopping Trip
From 2010 to 2011, the average consumer’s visit inside the c-store shrank by 20 seconds, to just 2 minutes 1 second, according to VideoMining’s most recent C-Store Shopper Insights study. The shift occurred during the actual shopping portion of the visit, although these same consumers spent more time focused on a particular category.
At the same time, the basket size by dollars dipped 2% to reach an average of $5.59. According to Baboo, the shrinking store visit and basket size were directly correlated, and influenced, she believes, by consumers’ tight budget focus.
“If I spend more time in the store, I may be influenced to buy something,” says Baboo. “It’s also the fear of … if I spend more time, will I be pushed into buying more? Will I be subjected to impulse purchases?”
In fact, more than 40% of shoppers spent less than 1 minute in the store, posing not only an increase from 2010 but also a significant challenge for retailers looking to build basket sizes.
Share of Time in C-Stores
Shopping time in the store fell 2 points to reach 70% of the visit—or 1 minute 25 seconds.
C-Store Customer Shopping Time Distribution
The percentage of shoppers who spent less than 1 minute in the store rose 6 points in 2011 to make up the biggest customer segment. More than two-thirds of customers spent less than 2 minutes total inside.
- Issue: With time inside the store dropping 14% from 2010 to 2011, the average in-store basket fell 2%.
- Solution: Build baskets by offering bundled solutions to improve basket ring in a short time.
About the Study
During six weeks in August and September 2011, VideoMining Corp. conducted its third C-Store Shopper Insights Program, a study that quantifies and analyzes c-store shopper behavior.
The 2011 study included five c-store chains representing 48 stores in 11 markets, and encapsulated approximately 2 million shopping trips. Twelve stores were outfitted with ceiling-mounted video sensors, while proprietary video-analysis software processed millions of hours of c-store shopping trips. The data was then cross-referenced with point-of-sale data to reveal insights about the average c-store shopping trip.
For the 2012 study, which will be conducted over 18 weeks this summer, VideoMining has expanded the participant base to include 12 retailers representing 144 sites in 20 markets, and will track more than 10 million shopping trips. Participants include Circle K, BP/ampm, Cumberland Farms, Hess, Giant Eagle’s GetGo, Maverik and Thorntons.
Conversion by Location
More than 80% of in-store sales occurred in the primary aisles of the c-store, according to VideoMining—and in fact the percentage of shoppers in these locations rose 40% between the 2010 and 2011 studies. At the same time, the shopper-to-buyer conversion rate fell 6 points. It is evident, says Baboo of VideoMining, that retailers and vendors are not paying enough attention to the category’s main sets.
“How do you frame the choices so they’re not walking away after considering the category?” Baboo says. “Primary aisles are definitely one of the areas you don’t see a lot of [buyer] conversion, compared to the shopper base it gets.”
She suggests dressing up the aisle as media, adding signage to better highlight products and more clearly outlining different subcategories. Retailers may have the product, but it’s going to cause “shopper leakage” for the category if the customers can’t find it, Baboo says.
Secondary displays, meanwhile, saw little change in traffic-to-shopper or shopper-to-buyer conversion. Those on sales counters actually lost 6 points in traffic-to-shopper conversion, which is partly because some of the study’s retailers removed impulse items from the counter area. But faulty assortment is also at play, says Baboo.
“If I don’t have time to actually go to the main shopping location for candy or the primary aisle, then I’m going to look for something near the sales counter,” she says. “If you don’t have the right assortment, if I don’t see a candy bar I’m interested in buying … then they’ve lost me and my dollars.”
In addition, some of the study’s retailers had non-impulse categories such as motor oil taking up valuable counter space. Here, vendor guidance can be a huge help, not only in determining the ideal assortment but also in parsing the results of the heat-map data.
“There is a strong belief that secondary locations are important, but there is clearly more work to be done on getting the location and assortment right,” says Krista Lorio, a member of the Consumer Insights team at General Mills Inc., Minneapolis. “The heat maps are a great starting point to analyze if the current displays are matching the needs of the current traffic patterns.”
None of the store locations saw big improvements in shopper-to-buyer conversion from 2010 to 2011. But even some improvements are welcome, says Baboo.
“It’s up to us to leverage the increase in traffic to our advantage,” she says. “Bundling, using signage to treat primary aisles as media, or having good assortment at the sales counter— even slight changes here would really go a long way in terms of having an impact on the bottom line.”
Share of Volume
Most purchase decisions are made in the categories’ main aisles, according to the 2011 VideoMining study.
C-Store Performance by Location
Traffic-to-shopper conversion rates fell for counter displays in 2011, while fewer shoppers in the primary aisles turned into buyers.
- Issue: Shopper-to-buyer conversion rates fell in 2011 in the primary aisle, while sales counter displays were less able to convert consumers into shoppers.
- Solution: Treat primary aisles as media to improve conversion rates. Use signage to frame shopper choices and avoid deselection. Declutter displays near the sales counter to increase efficiency.
Conversion by Day-Part
If you were to break out the traffic-to-buyer conversion rate of a c-store from 6 a.m. to 9 p.m., you would see a mountain peak in the early morning, falling to a foothill at lunch and a valley by the evening. Basket sizes, meanwhile, were the lowest in the morning and highest in the mid-evening hours of 6 to 9 p.m.
Consider it a map, says Baboo of VideoMining, for building bigger baskets in the morning and growing conversion rates in the second half of the day.
“C-stores should really start focusing heavily on how to get customers to come into the store for breakfast and lunch and one more time during the day for something else,” says Baboo.
Bundling is a powerful tool, she says; this can get a customer to not only spring for a doughnut in addition to her coffee in the morning, but also buy that bag of chips along with the soda when she has the mid-afternoon munchies.
“We strongly believe that the breakfast day-part is where retailers need to focus right now,” says Lorio of General Mills, citing competitive threats from QSRs. “Not only are QSRs seen as equally convenient due to the drive-thru, but they also now offer quality coffee programs with a wide range of breakfast solutions from healthy to indulgent. To maintain and gain traffic, c-store retailers need to make sure their coffee is on par or better than the competition and make sure they are offering the right breakfast assortment. It is also important to compellingly communicate the food they sell in order to assure consumers that is fresh and delicious.”
Also consider foodservice promotions that encourage a return visit to the store on the same day. For example, after a breakfast purchase, provide a coupon for a percentage off a lunch or dinner purchase that same day. It’s a way to cement loyalty in the face of competition from channels such as grocery, which has amped up its fuel loyalty programs, says Baboo. Customizing promotions and displays by day-part is one tactic that is not easily replicable in a grocery store.
Buyer Conversion Rate by Day-Part
Traffic-to-buyer conversion rates were highest in the 6 and 7 a.m. time frames, then rose again during lunch but failed to recover late in the day.
Average Shopping Time & Basket by Day-Part
From 2010 to 2011, the amount of time spent shopping during all day-parts shrank, with breakfast dropping by nearly 1 minute. Basket size, however, held steady during the morning but fell off during lunch and mid-evening.
- Issue: Three out of four customers who visit the store during the breakfast day-part make a purchase—but generate smaller baskets. Evening hours have larger baskets but lower conversion.
- Solution: Bundle products to build baskets during breakfast, and offer evening discounts with morning purchases to bring customers back, determined to buy.