Convenience stores need to think of themselves as foodservice companies that offer convenience, said consultant, author and speaker Ernie Harker (left) at the CSP C-Store Foodservice Forum last week in Rosemont, Illinois.
“You need to be food forward, not just fuel forward,” he said. “Most of your business comes from a core group of people. Identify them and develop a craveable product they’re crazy about. This will drive your profit.”
Harker, speaking on how c-stores can beat QRS, touched on an array of topics including the importance of offering new products for free—“have marketing pay for it,” he said—to build a core group. “You want that salad in the mouth of someone who’s never tried it.”
Use loyalty rewards to grow the audience for a product, offering free food to those who join the c-store’s program—but make the pitch in the loyalty app no more than three times. “After three, they don’t want it,” he said.
Packaging also is critical and can be the best kind of advertising, Harker said, showing a slide of a Campbell’s soup label versus a big-box retailer’s bland one. “The cost to print those two labels is pretty much the same,” he said. “We buy based on emotion.”
“Tug on the heart strings, tell the story and you’ll win.”
Price is a brand attribute and changes the way a consumer actually experiences the quality of a product, he said. Harker then discussed a study where people were hooked up to sensors that read the pleasure areas of their brains. Two groups were drinking the same wine, but one group was told it was a $5 bottle, the other group $35. The brain triggered a “meh” response in those drinking the “cheaper” wine but a “wow” response in the other groups.
“The taste was different because people associate price with different things, such as opulence,” he said.
Harker also said:
- Have a good product with a cool package, he said. “Invest in mouth-watering photography, not blurry. You need to see the salt on those fries.”
- Promote like a QSR, becoming a restaurant that has convenience. “Figure out ways that your point of sale promotes your primary product. If foodservice is your primary product, make sure your marketing shows it.”
- Get out the word on your foodservice via social media and elsewhere. Maverik used to send burritos to radio DJs, who would rave about items on the radio, he said.
- Invest in a rewards program. It’s difficult and expensive to reach one’s audience via traditional methods, but, “If they have your app in your pocket, it’s so easy to reach them.”
- If a c-store doesn’t have a signature item, simply call it something different. “A Slurpee is an Icee,” Harker said.
- Tell vendors and product developers you want something new and spicier for customers.
Other insights from the foodservice forum:
Happier Paying Once
Consumers are happier when they pay one time, which is why some will say they’ll even pay more for a combo than less for ala carte.
This insight comes from Greg Tornberg (top center), principal consultant at Impact 21. “That’s why all-inclusive resorts are popular,” he said. “People will say they choose this even though it’s more pricey because they pay only once.”
Tornberg spoke on The Irrational Human Psyche: Understand It, Leverage It, Grow Your Foodservice Sales! at the Foodservice Forum.
People don’t know what they want until they see it in context, he said, showing a slide of two types of subscriptions, an online newspaper for $59 yearly versus print and web for $125. Most would choose the cheaper option. However, when a third option was added in a study, print only for $125, the print-and-web option suddenly became more attractive, and more people selected it. “Their revenue went up 42% just by putting something in we call the decoy, which was the print-only for $125.”
The same can be done at c-stores, he said, showing an initial offer of private-label water for 99 cents and premium for $1.79. Sixty percent chose the cheaper option.
However, the addition of a third option, an import, for $2.29, resulted in the private label dropping to 40% of sales, the premium rising to 45% of sales, and the import garnering 15% of sales. This resulted in more overall profit for the c-store.
“Sadly, a lot of menu boards are designed first—what looks pretty—but it’s not necessarily strategic.”
Panera’s $8.99 monthly coffee subscription program led to increased trips and food purchases, with customers’ visit frequency rising 200% and a 70% increase in consumers buying food with the coffee. “If you want to grow foodservice sales, sell beverages,” he said.
A key way to boost a foodservice program is to find something remarkable and associate it with the food/business. “People will share and talk about it,” he said, noting the clever trivia on Snapple bottle caps. “It can be simple. Shamelessly steal this—it worked on a Snapple cap.”
Scarcity is also a way to garner attention, he said, noting how McDonald’s succeeds with the McRib because it’s always a limited-time offer. “The short time frame makes it successful, people share and talk about it because they feel like an insider and feel special,” he said.
“We all sell the same stuff at the same price,” he said. To improve sales, “Tug on the heart strings, tell the story and you’ll win.”
Menu Strategy a Must
Convenience-store retailers must have a menu board strategy in place to best succeed.
“A menu strategy is a business plan that sets out in writing exactly what the business objectives are, who’s going to do them, and how they’ll be done,” said Howland Blackiston (bottom center), principal at Westport, Connecticut-based King-Casey. “There must be measurements in place to make sure they’re doing those things, and responsibility is given to who’s going to do it.”
The best way to develop a menu strategy to promote food and beverages is selecting the right team, Blackiston said.
“Think more like a restaurant.”
First, however, retailers must do their homework. “What do consumers say about your menu?” Blackiston asked, adding that core items always must be there “to satisfy your customers to come back; but other menu items you can play around with.”
“Sadly, a lot of menu boards are designed first—what looks pretty—but it’s not necessarily strategic, and this is a big difference,” he said.
The strategy process includes setting and prioritizing business goals, which can boost ticket and profitability, Blackiston said. This can includes putting higher-priced items in more prominent positions on the menu, bundling items, and running tests with consumers in developing the menu board. The process includes using quantitative research to validate decisions.
“Think more like a restaurant,” Blackiston said. “Understand consumers’ needs as it relates to communications and communicating your products,” he said. “These are no-brainers for QSRs and fast-casual brands.”
Healthy Sells
Fifty-five percent of consumers would buy a product labeled “healthy” even in the face of higher prices, according to a 2023 food and healthy survey from International Food Information Council.
This stat was presented by Molly McGrath (right), founder of Light Work Kitchens, Chicago.
With this in mind, the best way to reach millennial or Gen Z parents is through their phone, she said in her talk Can You Support Your Customers’ Health and Your Bottom Line?
“Promote through loyalty apps,” she said.
Sales strategies include bundling hot foods with milk, fruit or packaged veggies for a complete kids meal, creating awareness for organic snack items, and offering lower-sugar drinks and low-fat and whole grain items.
Parents, who often look to healthier options for their kids than for themselves, are more able to make choices on behalf of younger kids—up to about age 10, which is when they begin to select their own foods, McGrath said. She added that 46% percentage of millennials are parents and 54% of older millennials are parents, according to CSP sister research firm Technomic.