Convenience-store retailers not offering customers a loyalty program are sacrificing sales, according to a new report from retail-tech firm Paytronix, Newton, Massachusetts.
“Convenience store customers love their loyalty programs,” Paytronix said. “Not only do they visit at a rate that far exceeds restaurants, they also consistently outspend non-loyalty members at by greater amounts than restaurant loyalty members.”
The report notes that c-store loyalty members behave far differently than their restaurant counterparts. Because these customers most likely visit in the morning, c-stores have an advantage over quick-service and full-service restaurants in the morning coffee and breakfast categories.
Other report findings:
- C-stores customers are more likely to spend their rewards as part of their normal course of visiting, as opposed to using them as a treat later.
- C-store loyalty programs provide the highest lift in check sizes of any segment, with loyalty member checks 12% higher on average than non-loyalty checks ($18.42 vs. $16.47 in 2021-2022). This increase in check size has only grown, with no sign of slowing.
- C-store loyalty members tend to visit weekday mornings, and c-stores are the only concept that sees loyalty rewards redeemed on popular visit days. “While the restaurant concepts dominate the lunch and dinner rushes, convenience-store loyalty members prefer to visit in the mornings,” Paytronix said. “That stop for fuel on the way to work or as part of a day working on the road is the main touchpoint for most convenience-store customers, though there is also a preference for midday.”
- Email-eligible c-store loyalty members are 100% more likely to visit than customers who do not give their email addresses.
- Rewards for c-stores are usually spent Fridays or Saturdays, although the difference isn’t as great as at QSRs or FSRs. “This is likely an indication that most rewards are spent on fuel, and they are spent as they are accumulated.”
In addition, Paytronix said, the generational mix for c-stores is unusual, particularly in terms of in-store shoppers.
“Convenience store in-person shoppers are the only category in which 36- to 45-year-olds, not 56-plus-year-olds, lead in terms of spend,” Paytronix said. “Convenience stores also cater to guests unique to their concept: truckers. These guests punch above their weight in certain purchases and can be treated to encourage repeat business.”
For example, while truckers account for about 1% of visits and in-store spend, they are 6% of gallons purchased.
Visits Up
Another finding is the rise in c-store visits, with customers visiting more since January 2021 and boosting spending on items other than gas.
“As c-stores attempt to move into the QSR space and offer prepared foods and specialty drinks, loyalty members will continue to be a foundation to build these services,” Paytronix said.
Jeff Hoover of Paytronix’s strategy and analytics, restaurants and convenience stores, said there was a spike in 2023 in visits early in the year not present in 2021 or 2022. “This is an indication that return to office is driving additional visits to c-stores for fuel and breakfasts,” he said.
In addition, as c-stores offer more options in quality food and beverage, “They need to increase the incentives to come in-store,” Hoover said. “With more customers going out than ever, c-stores have an opportunity to demonstrate they are a viable option next to QSRs.”
Youth Movement
The report also pointed out that c-stores “hold the unique distinction in that not only are they one of the most popular concepts among the youngest age groups, they are growing in popularity among those age groups faster than any other concept.”
As technology advances and artificial intelligence improves behavioral predictions, digital guest engagement will deepen, Paytronix said.
“If loyalty were only about giving every guest a 10th sandwich for free, the trends highlighted in this report would have begun decades ago,” the report said. “Instead, the factor that made a difference was that each concept embraced loyalty and used it to get to know their guests better.”
That knowledge has been implemented to improve the relationship between the customers and brand. “Loyalty has built digital guest engagement,” Paytronix said.
As technology advances and artificial intelligence improves behavioral predictions, the digital guest engagement will only deepen.
“The knowledge of what a guest wants and when they want it, combined with a deep well of data, means that as guests change their relationships with brands, brands can change their offers to match,” Paytronix said.
When loyalty is combined with other technologies, such as online ordering and messaging, Paytronix said, the digital guest engagement only becomes more natural and human, “allowing brands to build relationships that are scalable and real. And that should be the goal for any brand seeking to connect with its guest: authentic and mutually beneficial relationships.”
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