11 Strategies for Market-Basket Growth
Opportunities abound in wine, chocolate and ... newspapers?
DALLAS -- Did you know that people buy chocolate with just about anything else in the store? That people have had $700 more in their accounts since last year? And that customers shop a convenience store in the evening the way they do a small grocery store?
In the session “Boosting the Convenience Market Basket” at CSP’s Convenience Retailing University, Don Burke, senior vice president of Management Science Associates Inc., Pittsburgh, analyzed data compiled from three convenience-store retailers and offered these tips:
- That $700 extra consumers have comes from lower gas prices. While in-store sales are up 3% as a result of customers spending less on fuel, “You have to work a little harder to get that money now,” Burke said.
- Revenue from fuel sales is down, but dollars from those sales aren’t down as much because people have been “buying up”—purchasing higher-octane gasoline instead of regular. However, 85% of fuel customers don’t buy anything in the store. How can you get them inside? With signage promoting the top in-store categories. (See No. 9.)
- Speaking of those categories, some of the fastest growing (in the latest 13 weeks of data vs. the same time a year ago) are wine (up 12%), beer (10%), cold vault/energy drinks (9%) and ice cream (8%). Many of these are up as a result of consumers wanting to treat themselves via the extra cash they have, Burke said.
- And more on wine: The “sweet spot” price for wine in the c-store is $8 to $12, and the wine market basket is $18.62 on average. However, Burke says some folks are willing to spend $24.99 for a good bottle. Make sure customers know you have high-quality items and some may bite. Even better: Many of those who purchase wine buy hard liquor with it, so make sure the displays are close together.
- Two other complementary liquids: water and carbonated soft drinks. “Always leverage and market your cold case together” for bundling opportunities, Burke said.
- Who knew? People tend to buy a newspaper when they buy a lottery ticket, according to MSA data. “If you want to sell more newspapers, put it near the lottery machine,” he said.
- Most beer is purchased between 3 and 11 p.m., usually when folks are on the way home from work. “Put a six-pack on your (checkout) countertop just to remind them,” Burke said.
- Total store sales peak between 4 and 5 p.m. And sales of milk spike in the later hours. “People shop c-stores in the evenings the same way they do a small grocery,” he said.
- In a market-basket analysis of the top categories, chocolate always pops up as something customers will buy with another product. Those fuel customers who don’t come into the store (see No. 2) might be lured inside by a promo on chocolate candy.
- Thirty-six percent of customers who buy beer make that their sole purchase. The category purchased second most often with beer? Family planning. Safety first!
- Finally, it’s not just hype: MSA numbers show stores that offer foodservice have 2% higher sales than those without. And when people purchase foodservice, they buy something else 82% of the time.
Follow CRU 2016 at #ConvenienceRetailing.