In a recent episode of “At Your Convenience,” CSP Editor Chuck Ulie talked with Liza Salaria, senior vice president – category management and foodservice, at Chicago-based W. Capra, about crafting promotions with purpose.
The two spoke at CSP’s Foodservice Forum on June 11 in Schaumburg, Illinois.
On the podcast, Salaria offers suggestions on which strategy or strategies to use when promoting an item.
Listen to the podcast recording of this interview here or read the Q&A below.
This interview has been edited for length and clarity.
Chuck Ulie: You’re going to be speaking here at the forum about crafting promotions with purpose, and why should retailers even promote. Can you talk a little bit about that subject?
Liza Salaria: We want to inject value into our brands, so we discount for the obvious reasons. We want to increase units, sales and ultimately make more money. But tomorrow, we’re going to dig into some of the more holistic reasons that we invest in value, that really change our customers' behavior and really help establish our brand as a differentiation point.
Ulie: Some of the reasons why people promote is to increase basket size, expand consumption and drive trips. Are these all somewhat equal in value, or would you suggest someone start with one of these or a few of these that jump out, or are they all kind of even?
Salaria: It depends. If you find yourself in a situation where transactions are soft and trips are down in your store, you may elect to run a heavily discounted product like fountain, with the sole purpose to drive incremental trips into the store. The second biggest one that I see, and I highly encourage, is that our industry is facing a lot of headwind with trips. So, if customers are coming in less often, then what we need to do is get them to buy more when they are in our stores, and that's called increasing the basket size. And there are certain promotions we do to particularly accomplish that?
Ulie: Another part of your presentation is going to be a clear promotional goal determines success metrics. Can you talk a little bit about that?
Salaria: What can often happen is you maybe discount a product, and I'll go back to fountain or maybe even coffee, and a lot of times we tend to be very binary in terms of our analytics, meaning we want to generate enough coffee sales to pay for the discount. But we need to have a little more holistic approach. So, if the goal is just to drive more customers into the store, then what we're trying to measure is transaction count. And how we look at break-evens is we don't just look about how much more coffee or fountain we sold at a discount. Rather, we look at what other products they buy, and that would be called affinity purchases, right? So, we're looking at what happened to our sweet snack sales, what happened to our salty snack sales, because we're increasing more customers coming in. They're buying other things, and hopefully they'll come back more often.
Ulie: Inside transactions have not rebounded since before COVID. Is there any hope on the horizon?
Salaria: There’s always hope. The starting point is understanding that the industry has a challenge, and really coming out of COVID, consumer behavior just changed. We now work remotely, so commuter travel is down. What we need to face is the fact that when customers do come in, we need to get them to buy more. But the other thing we need to do is to get really creative on how to create new daypart missions. How do we create new reasons for customers to break in the middle of their day, get away from their computers and come to the local convenience store for maybe something unique like a smoothie or a hot cookie or some new reason?
Ulie: Is there any tangible example of that that you can toss out?
Salaria: One of the examples I'll give is Starbucks recently ran a promotion—25% off on any cold beverage, but only between the hours of 12 and 4, and that creates a sense of urgency. That’s creating new daypart missions and, hopefully, if you get customers to try that, that will become sticky, meaning they'll continue to do that long-term.
Ulie: What is promotional intent? Let's say I'm a c-store, and I want to create a promotion, and I own three stores. How would we develop a promotion?
Salaria: Vendors have a lot of funding, and we need to use that funding in a very intellectual way, meaning we want to certainly add value, grow those products, but we also want to change the dynamics of the store. We want customers to come in more frequently, we want them to engage in our brand more richly and we want them to buy more when they come in. So, it just depends on what problems you're trying to solve.
Ulie: Let's talk a little bit about loyalty and fountain drinks.
Salaria: Whether it's on loyalty or it's non-loyalty, you're just offering a discount on something like fountain. It’s a great way to bring customers in the store and drive more trips.
Ulie: How do we get them to grab the soda, bag of chips and then a third thing?
Salaria: You can bundle. Where do you put the salty snacks? Where do you put the suggestive sell baskets? Adjacencies matter, team member engagement and upselling matters. If you find over time that customers are coming in and they're just buying fountain, and you can measure that, they're called the “cherry pickers.” They come in and just buy the fountain and they leave. If you want to close that gap, then what you do is you change the promotion to: You get this fountain for $1 with a food purchase, and you require the purchase. And that starts to automatically build the basket.
Ulie: Any closing thoughts?
Salaria: Beyond just promotions with foodservice, if you think about what food means to the convenience business, it’s the one area that retailers can really differentiate. We sell a lot of the same things. We sell Snickers bars, we sell cigarettes. We sell Red Bulls. How do you position food so that it really elevates the transactions for the store, the average basket for the store, and really the brand efficacy for the total retail environment? So, food has that great opportunity for you to differentiate who you are.
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