Roundtable Report: Magnetic Impulse
Triggering impulse sales can help counter shrinking c-store baskets
Put it on the counter. Hang up more signage. Bundle it. Go big. Go small.
The ways to trigger more impulse sales are as varied as the categories themselves. But the stakes for retailers are only growing, as declining fuel sales keep more customers off the c-store lot and competition from other channels mounts.
It’s a challenge with which the more than two dozen retailer and supplier attendees of CSP’s 2014 Driving Impulse Sales Forum are quite familiar. And it is playing out against the backdrop of declining c-store shopping, according to research from The Nielsen Co., which shows baskets down nearly 3% and trips down 5.6% in 2013. To provide new angles to help retailers trigger more impulse sales, presenters at the forum, held in Chicago in April, led discussions on a range of topics, including the value of the Hispanic consumer, maximizing assortment and the state of some of the biggest impulse categories.
In terms of their buying ability, the 52 million Hispanics living in the United States are arguably the most important demographic for retailers hoping to grow candy and snack sales.
On average, Hispanic households are younger and larger than those of non-Hispanics, said Roy Kokoyachuk, quantitative research director and managing partner for ThinkNow Research, Burbank, Calif., a firm that analyzes the motivations and habits of the Hispanic consumer. And these households’ buying power amounted to $1.2 trillion in 2013, larger than the economies of most countries, according to figures from the Selig Center for Economic Growth.
Hispanics tended to be more optimistic than non-Hispanics about the economy, Kokoyachuk said during a presentation about Hispanics’ snacking behaviors based on ThinkNow research. The firm segments Hispanics into three groups based on their level of acculturation, an approach that best frames purchasing behavior.
The more acculturated segment, which makes up 27% of the demographic, is more likely to be born in the United States, speak only English and consume only English-language media. The less acculturated— 16% of the group—are more likely to be born outside the United States, speak only Spanish and consume only Spanish-language media. Retailers need to home in on the level of acculturation of their Hispanic customers to best serve their needs.
For example, ThinkNow research shows that Hispanics tend to value quality and low prices the most in their shopping experience. “As Hispanics acculturate, low prices take on a greater significance,” said Kokoyachuk. This may be because these consumers are most familiar with their brand options and are able to compare and choose items with greater confidence.
Similarly, Hispanic consumers who are less acculturated are more likely to leave a store if they don’t see an item they are looking for in stock, likely because they are not as familiar with the alternatives to their preferred brand.
And while Hispanics overall are just as likely to buy candy near the checkout as they are in the aisle, the less acculturated greatly prefer the checkout—again, likely because they are unfamiliar with other brand options.
Hispanics and non-Hispanics show similar preferences for where they prefer to buy snacks when running an errand: C-stores rank third for both groups, behind fast-food restaurants and grocery stores. However, there are a few interesting differences within the demographic. Male Hispanics are twice more likely to choose a c-store for a snack purchase than female Hispanics are. And less acculturated Hispanics are more likely to prefer a ready-to-eat sandwich, fruit or yogurt than the more acculturated.
The bottom line: If your store has a large Hispanic consumer base, it pays to better understand their level of acculturation to best serve their needs.
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