Convenience stores can take some of the coffee-consuming market share from quick-service restaurants (QSRs).
“It’s ripe for the taking,” said Kesha Alexander (pictured), co-founder at Supper Co., a Springfield, Missouri-based agency specializing in food, ecommerce, retail and hospitality. “The channel lines have been blurring for a very long time.”
While consumers have brand loyalty, they also are dynamic and their needs change all the time, said Alexander, who spoke last week at the CSP Dispensed Beverage Forum in Rosemont, Illinois. Alexander spoke on Thirst, Need State and Occasions.
“You have to be more to the consumer than you ever have been before,” she said. “They demand that you’re more unique, offer more products, you’re more craveable and provide better value. And if you can do all of those things while also being more convenient, then you can win.”
C-stores have untapped potential at their doors, she said, noting:
- 80% of c-stores sell 80% of the fuel purchased in the United States.
- 44% of those customers enter the c-store.
- 33% make a purchase.
When noting the 44% stat, Alexander asked how c-stores can win over the other 56%. The answer, she said, includes offering non-coffee options in the growing beverage category.
In coffee specifically, 50% of coffee drinkers buy coffee away from home at least once weekly and 33% do so four or more times per week, she said.
“The coffee market is growing, and it’s your opportunity to take advantage of that,” she said.
Power of Positioning
To win against QSRs c-stores must have a point of difference and “live and die by that positioning,” she said. “We have to find an unmistakable proposition that we can deliver to the consumer.”
As examples, she pointed out Jimmy John’s Freaky Fast positioning and Chick-fil-A’s focus on service.
Even if positioning isn’t clear at the corporate level, “You still have the opportunity in your beverage positioning to really stand out.” A retailer doesn’t even have to change what it’s doing, she said, “but taking what it already has and flipping it so it’s an interesting angle to the consumer. Perhaps it about your trending flavors, flavors being added soon—maybe you’re the place where they can do the most customization; we know that’s important to Gen Z. Maybe it’s about your water and filtration to elevate your coffee program.
“Whatever it is, your positioning has to drive everything you do,” she said. “It has to come through in your marketing.”
“The coffee market is growing, and it’s your opportunity to take advantage of that.”
Moving on to innovation, she highlighted what QSRs are doing that c-stores can emulate.
“QSRs and fast-casual restaurants use innovation to create relevancy and news in the category,” she said, noting that McDonald’s is going to test cold brew in some Southern California stores—at $4.69 for a medium.
“It’s not a cheap product,” she said, adding that McDonald’s will use existing equipment to create new products to reach that next consumer. “This is what we have to compete against. Guests want the same things from c-stores.”
Retailers should take ideas from elsewhere and apply then to their business, creating an energetic concept, she said.
“If you see a great idea, take it and use it, because it can build your business,” she said.
Be More Convenient
It takes an average of four to seven minutes to fill a gas tank, while the average drive-thru line is seven minutes, Alexander said.
“So, how do we become more convenient to the consumer than the drive-thru line?” she asked. “What if we filled their beverage needs in those seven minutes in a different way so they don’t have to make two stops? What if you used your self-serve beverage program to get that beverage to them faster than if they went to a QSR?”
Alexander suggested c-stores use push notifications in their apps so when customers arrive at the pump, they receive an offer requiring them to enter the store—or promise a beverage to be delivered to their car like Dominos did with pizza.
“I know there are complexities to all of these ideas, but we have an opportunity to think about what we have at the pump, what we have in store, and how do we use that to our advantage against QSRs,” she said.