Solving the Mindset Puzzle

 If one were to ask a retailer about the mood of an average c-store cus­tomer on a given day, the comeback might be: “What’s the weather like?”

Literally. And that retailer might be right. A really in-tune retailer might even ask, “Is it above 65 degrees?”

That’s because panelists at the annual CSP Shopper Insights Forum, held last month in Scottsdale, Ariz., covered a broad range of factors that influence shoppers, including age, gender, ethnicity and, of all things, weather.

The 65-degree threshold was part of a presentation from Don Burke, senior vice president of Management Science Associ­ate Inc. (MSA), Pittsburgh. Combining data from Temple, Texas-based McLane Co., the nation’s largest c-store dis­tributor, with firms that follow national weather patterns, Burke and MSA cal­culated the “magic number” at which consumers would start mobilizing after a spate of chilly weather.

“At 65 degrees, people are going out more,” he said. “They shop more and sales are going to peak.”

Even though notions such as hot weather leading to higher packaged-beverage sales seem obvious, Burke said planning for such measureable behavior leads to actions such as extra prep work to avoid out-of-stocks.

Understanding the changing nuances of weather, demographics and customer experience keep retailers nimble and profitable, according to speakers at the forum.

“Marketing to consumers comes down to understanding different mindsets; it’s about marketing to the mindset and not necessarily the age or demographic,” said Tina Wells of Buzz Marketing Group, Voorhees, N.J. “It has become really complicated for a c-store to figure out how to market to a demo­graphic. They really have to think out of the box and think about how to reach [their customers].”

For instance, a retailer considering ways to market to a younger demo­graphic should consider potential sub­groups. One may be adults ages 20 to 25, many of whom have returned to their parents’ home to live. In that case, the mother of the household may become the one who decides what to buy and where to shop for that young adult.

Forum speakers revealed more aspects of the mindset puzzle:

• Acculturated Hispanics were more likely to respond like typical customers, while Spanish-only-speaking custom­ers responded to specific cultural cues such as Spanish products and Spanish-speaking employees.
• Creating a customer experience is still a strong motivational tool for shoppers.
• Reaching out to “tribes” within the so-called millennial market.

Retailers are always trying to under­stand how shoppers behave in certain spaces and want to manipulate their stores to promote certain kinds of behavior, said Michael Powell, cultural anthropologist for Shook Kelley, which has offices in Los Angeles and Charlotte, N.C.

“How you create a better experience is a key part of the puzzle,” Powell said. “What does the store mean? What does brand mean? What do your products mean to people?”

Hispanics Today

Examining issues of brand and brand meaning, David Portalatin, director of industry analysis for The NPD Group, Houston, brought the question to the specific demographic of Hispanics, exploring some of the findings from work done specifically for the CSP forum.

This firm’s studies show Hispanic populations tend to be brand-loyal, but not brand-specific. “It’s important to have a good selection of brands, but it’s not necessarily dependent on a specific brand,” he said.

As long as variety exists with branded product, that’s what the Hispanic shop­per prefers, with that tendency intensify­ing with Spanish-speaking individuals, Portalatin said. Of course, in areas where the Spanish-speaking element is domi­nant, retailers ought to consider com­municating via product choice, signage or Spanish-speaking employees, but the placement of brands as a way to satisfy that base penchant for national names ought to be in place.

“Some consumer segments are brand-loyal. In other words, if the brand is not there, they’ll leave,” Portalatin said. “Not necessarily so for Hispanics. They will make a brand replacement.”

And by brand, that means well-known manufacturer brands, recognizable ones with brand affinity. Private label may qualify, depending on the merits of the label, but typically it’s what a retailer would consider a product brand.

Portalatin’s NPD research also hit upon foodservice. Surprisingly, the key to wooing the Hispanic population in this evolving category is not necessarily with what may be considered “ethnic” foods. Rather, it’s the “simple basics” of foodservice.

“No. 1 is food quality. Does it taste good?” he said. “Quality and it being well executed is more important whether or not an [ethnic] offer is there. And variety is important, too.”

Portalatin’s findings were obtained in conjunction with Los Angeles-based Garcia Research, which focuses on Span­ish-language data collection, providing attendees with “bonus material” outside of NPD’s base research.

Fluid Demand

While several panelists spoke to shopper behavior in general, a few addressed how shoppers view specific products. For this forum, two speakers focused on packaged beverages.

Andy Morris, shopper insights man­ager for Red Bull North America, Santa Monica, Calif., said what most shoppers appreciate about c-stores is the ability to go directly to the item they want, grab it and check out. The opportunity, he said, lies in understanding that purchase and engineering ways to upsell that customer.

In his studies, Morris said a correla­tion exists between low shopping time and high basket ring. “For every second cut, you add 21 cents to the basket,” he said. “So it’s about making it easy for people to shop the store and fulfilling the promise you made.”

But while people intent on purchasing a specific product will “speed walk” to their destination, moving an average of 3.3 feet per second, according to Morris, their walking speed slows down to 2.9 feet per second after grabbing their product. That’s the opportunity to upsell, he said.

One solution he suggested was using the top-50 items that suppliers and a store owner’s own sales data can help identify. Placing those top SKUs in the path of someone leaving a destination point might be a solution. “We encourage you to think about how to take advantage of where the top 50 are placed,” he said, “and how to use these items to create opportunity.”

Tinkering with new or underdeveloped categories may also provide opportunity, said Jeff Schouten, director of channel marketing for MillerCoors LLC, Chicago. For the beer category, for instance, c-stores already represent a casual, quick, cold, brand-specific buying opportunity for people transitioning from work to play. Yet this tried-and-true scenario limits the SKUs a retailer can carry.

A clear opportunity for growing the category is craft beers, he said, but because major brands are important for c-stores, craft SKUs are in an uphill battle for shelf space. While grocery stores—with square feet to spare—may have dozens of craft-beer products, c-stores average five.

But continuing to make the c-store a beer destination means evolving with the tastes of the consumer. “The beer jour­ney,” Schouten said, “is about invitation, exploration and experimentation.”

Evolving Experience

But before retailers become tied to approaching customers on one level, a broader concern may be delivering a bet­ter experience and taking charge of how a store’s brand evolves to stay relevant.

Using Oak Brook, Ill.-based McDon­ald’s as an example, Powell of Shook Kel­ley cited the sleight-of-hand the fast-food chain accomplished on a major scale that kept it grounded in its core products of hamburgers, while evolving its visual look and messaging to evoke a more health-conscious, contemporary feel.

“McDonald’s did not totally move away from its roots, but expanded on that perception,” Powell said. “That’s the kind of thing c-stores need to be working on.”

Brand messaging involves everything from building design to product selec­tion. Much in the same way libraries have “cues” in long study tables and endless shelves of books, or pubs have with bar tables and pint glasses, individual ele­ments assembled in a c-store may evoke an experience that may sell more mer­chandise, or allow a customer to trust a new category such as foodservice.

Part of the goal in creating a new envi­ronment is to encourage the behaviors that the visual cues evoke. “We know how people act in a library,” Powell said. “And we know how people act in a pub.”

Having worked with Louisville, Ky.- based Thorntons Inc., Powell said one of the main challenges the industry has is building on—not losing—its identity as a c-store, and also becoming something more. “It’s about perception and expecta­tions that shoppers have before they step inside the door,” Powell said. “Driving down the street, you see hundreds of buildings, and the c-store is such a com­mon and expected form.”

The way Thorntons changed that iconic image was to develop a “box within a box” design, with the foodservice side of its identity a larger, more graphically interesting “box” juxtaposed with a more traditional c-store frame.

“We thought about how we could change up expectations before the con­sumer even steps inside,” he said. “When you walk in, you recognize that the two boxes offer different experiences.”

Another important ingredient in the brand messaging is making communica­tion clear and easily understood. C-stores frequently are cluttered with messages, with fully stocked shelves, danglers, ship­pers and a host of other elements that create visual chaos, Powell says.

“From the entrance, you want the cus­tomer to look left or right and just notice two or three things,” he said. “You’re not trying to inundate people with too many messages. It’s a common problem.”

How does a retailer pick the right mes­sages? It’s about “what you’re good at, inherent assets, market opportunities. Who are you attracting? What are they coming in for? Do you want to build a new audience? Does it overlap with what you own?” Powell said.

And it’s more than just design. “It has to be solved with a strategic process,” he said. “The retailer has to come to grips with what they’re trying to sell. They can only do a couple of things really well.”

Future Potential

Examining the retail space is also a mat­ter of consumer motivation, or what drives shoppers to shop. Eric Le Blanc, vice president of marketing, deli and convenience stores for Tyson Foods Inc., Springdale, Ark., said one such shopper is an elusive segment but one that ought to be on retailer’s radar: “balancer moms.”

This demographic is about 40 years old but ranges from 30 to 55, has a college degree, ranks the third highest among Tyson research segments for household income, and gravitates to suburban and rural markets. And while it’s the largest segment within the general population of the United States, c-stores are not suc­cessful in capturing them, Le Blanc said.