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Spotlight on the C-Store Shopper

Retailers discuss ways of understanding, engaging current and potential consumers.
Breaking into the mindset of the many groups making up modern consumers—from social-media-savvy millennials to yoga-centric females and construction-working Bubbas—can be a daunting task. Take millennials, for instance: By time a retailer can gather data on the latest Gen-Y food trend, most of that group has moved on to the next hot-ticket item. Yet with deep pockets and a willingness to embrace the c-store channel, millennials are hardly a group that can be ignored.
 
What’s a retailer to do?
 
Fortunately, the c-store channel is one that embraces the opportunity to swap stories and share information on engaging the growing variety of consumers out there. The nearly 60 retailers, suppliers and experts on modern consumers who attended CSP’s annual Shopper Insights and Engagement Forum in September in Phoenix gathered to do just that.
 
“I’m amazed at the amount of information you’re willing to share with each other, despite being in competition,” said Christopher Brace, owner of New York-based Shopper Intelligence. “I think that’s unique to the c-store channel. I certainly haven’t seen it anywhere else.”
 
Brace did some sharing of his own during his session at the forum, including many common misconceptions about the definition of an insight.
 
“Insights are not generalizations. There are significant differences between the two,” said Brace. “Insight is the act or result of apprehending the inner nature of things. If there is a number in an insight, it’s not an insight; it’s a generalization. Generalizations are meant to inform; insights are meant to inspire.”
 
For example, Brace’s data shows that roughly 46% of c-store shoppers purchase only one product during a shopping trip. Saying that most c-store shoppers buy only one item is not an insight, but a generalization. To understand why these consumers are buying only one item—and how to inspire them to change the behavior—requires insight. 
 
“We need to move from ‘disrupting’ shoppers’ behaviors to ‘connecting’ with shoppers’ emotions,” Brace said. “Shopper and consumer insights are the key to developing communications that capture the attention of shoppers.”
 
While a common tactic for driving sales is using in-store signage to advertise new products or promotions, Brace believes this is not the most successful way to capture the attention of shoppers, who make 95% of decisions subconsciously, as opposed to just 5% in the conscious mind (to which such signage appeals).
 
“There is a fallacy in marketing that the more information we give our consumers, the better,” he said. “This could not be further from the truth. Too much information makes it harder for consumers to make a decision.”
 
Given that, how can retailers inspire consumers to make additional purchases? It comes down to connecting, engaging and inspiring shoppers.
 
“Of these three, it’s most important to connect with shoppers. If you don’t do that, you’re not going to engage or inspire,” said Brace. “The good news is if you can connect and engage your shoppers, you’re perfectly set up to inspire them.”
 

On Millennials, ‘Susie Normal’

Of course, before a retailer can connect, engage or inspire shoppers, he or she must first understand the consumers who are shopping the c-store—or could be. Michelle Barry delved into the mindset of several consumer groups in her presentation.
 
“Convenience has been around for a long, long time,” said Barry, president and CEO of Centric Brand Anthropology, Seattle. “It has become a part of how we operate and how we live.” 
Indeed, for most of the 20th century, convenience was a key point of differentiation for retailers and suppliers alike, especially when it came to food. In fact, during the rise of TV and microwave dinners, convenience was more important to consumers than the actual taste of the food. 
 
That is far from the case with today’s “foodie” culture. The emphasis on quality and freshness often directly butts up against the traditional idea of convenience. Yet with operators such as Panera and Whole Foods proving that food can be both fresh and convenient, c-stores are finding themselves in a bind.
 
“Convenience is at a critical time; convenience being a point of contention is a rapidly diminishing point,” Barry said.
 
Yes, the stereotypical c-store model of a convenient place to pick up gas, beer and jerky will still work for a certain set of consumers—whom Barry referred to as the “Bubbas” of the world—but these shoppers account for only about 25% of the market. 
 
“Do you alienate Bubba if you offer fresh, quality options to the other 75% of consumers?” Barry said. “Probably not.”
 
Using her research as an anthropologist, Barry looked at the typical daily meals of some consumer groups less likely than Bubba to shop the c-store channel: the “Yoga Chick” and “Susie Normal.” While Yoga Chick may always eschew the c-store channel in lieu of high-end coffee shops and trendy cafes, Barry sees lots of opportunity with the Susie Normals of the world. While these female shoppers want the quick and convenient experience a c-store offers, they often head to competitors in the drug-store channel instead.
 
“Drug is a big competitor for the average female consumer,” said Barry. “She can buy something to eat and also pick up lip balm and a snack for later. She can do all her indulgence shopping in one spot.”
 
And, as important as it is to draw Susie Normal away from drug and into convenience, Barry believes it’s even more crucial for c-store retailers to retain a consumer base they already have—but may not always cater to.
 
“The ultimate opportunity is millennials,” Barry said. “You haven’t lost them … yet. But c-stores are very, very close to becoming irrelevant for this generation.”
 
Barry sees a simple way for c-stores to appeal to females, millennials and beyond, and it all goes back to that trend of fresh, quality food. While the terms “local” and “organic” are often associated with high-end shoppers or health nuts, this is no longer the case.
 
“Today, high-quality food is not just limited to affluent suburbanites and urban hipsters,” said Barry. “Fresh and quality—it doesn’t automatically mean healthy. There are lots of options within quality indulgences.”
 
Which isn’t to say retailers must completely overhaul their foodservice programs. Rather than investing in an entirely new program to attract millennials and females, retailers can merely dip their toes in the water, Barry suggested.
 
“Simply adding fresher, trendier options will go a long way,” she said. “It doesn’t have to be across the board; it’s not all or nothing.” 
These options could come in the form of bread brought in from a local bakery or just a few artisanal toppings for a sandwich program. Even retailers not in the foodservice game have an opportunity to draw in the fresh-minded consumer without a drastic operational change.
 
“I know from 15 years of research that dairy is the first category moms adopt as a local or organic option,” said Barry. “It’s kind of a halo for you. The traditional c-store experience doesn’t have to be entirely shelved; it can coexist with a ‘fresh’ concept, especially for females who just want another option.”
 

Priorities of the Beer Consumer

Millennials were also a hot topic in a session on the beer consumer, presented by MillerCoors’ John Knapp and Scott Sabin. While premium beers still account for the majority of c-store dollar sales, millennials are driving hot new segments within the category, Knapp said.
 
“Growth is happening in flavors and higher-alcohol products,” said Knapp, MillerCoors’ director of category management. “These products are really appealing to millennials and are expected to see continued growth.”
 
Beer’s continued success in the channel—and the category’s appeal to the high-spending millennial—is good news for suppliers such as MillerCoors, but even better news for c-store retailers.
 
“When we talk about the convenience shopper, it’s really about the fight for trips,” said Knapp. “To compete, c-stores are creating ‘destinations’ to generate more traffic. Beer accounts for 13% of c-store sales; it certainly has potential to be one of those destinations.”
 
To better understand how to make beer a true destination, Sabin—the company’s marketing insights manager—shared the top “musts” of the c-store beer shopper. Besides the obvious need for quick and convenient service, these are the aspects that most factor into a beer shopper’s decision-making process:
 
  • Cold: “This is the most powerful thing in shoppers’ minds,” Sabin said. “They are truly looking for that cold experience—beer that is ice-cold from when they touch it to when they consume it.” MilllerCoors’ research shows that 70% of c-store consumers intend to drink their beer within two hours of purchase, driving cold to the No. 1 position in importance. On the other side, only 2% intend to drink it the next day or later. Sabin sees the cold “must” as a big opportunity for retailers, whether through coolers or beer caves: “C-stores, more than any other channel, have the opportunity to own this cold experience.”
  • Brand: “Most shopper types are looking for those core (premium) brands,” said Sabin. “A little variety gives the shopper an opportunity for trial. But at the end of the day, they’re probably going with a core brand.” In other words, while there’s certainly room to bring in a few SKUs of craft or specialty products, don’t ignore the industry standards. 
  • Pack Size: Whether a retailer sticks to six-packs and single-serves or opts to stock 12- or 24-packs of popular brands, it’s crucial to remain consistent in what’s on the shelves. Packaging is something consumers will pick up on, especially if their preferred size is out of stock. “C-store beer shoppers understand both value and pricing,” Sabin said. “They know if that 12-pack is out, two six-packs will cost them more.”
  • Price and Promotions: As value-conscious as c-store beer shoppers are, they understand that they’re paying a premium for the convenience the channel offers—which is why price and promotion are at the bottom of the “must” list. They’re still important, but not nearly as much so as cold, brand and pack size.
“The c-store consumer understands there will be less promotions and discounts in this channel than in grocery,” Sabin said. “But they also like being rewarded and feeling like they got a good deal.”
According to MillerCoors data, POS price signage may be the best way to communicate a good deal. Sabin shared that stores with price-related POS had 88% more beer shoppers, 46% more buyers and 64% more sales. Just as important, consumers spent 50% more time browsing the category, netting an extra 8 seconds of engagement.
 

Engaging Singletons

Conference attendees were also treated to insights on a fast-growing and high-spending segment: singletons. While most people understand the definition of being single, a “singleton” refers to someone who chooses to live alone as well. This segment was at the center of author and social scientist Eric Klinenberg’s session.
 
While in the 1950s, choosing to live on ones’ own was considered “sick,” “neurotic” or “immoral” by the general population, that is not even close to the case now. In research for his book “Going Solo: The Extraordinary Rise & Surprising Appeal of Living Alone,” Klinenberg uncovered the following statistics:
 
  • Nearly three in 10 American households today consist of just one person.
  • Nearly 50% of those one-person households are ages 35 to 65. And in recent decades, the greatest increase has been with those younger than 35.
  • Nearly half of U.S. adults are single.
“As a social scientist, you just don’t see drastic changes like this,” Klinenberg said. “In a way, it’s revolutionary.
 
And though the cost of living—not to mention the cost of living alone—goes up significantly in urban areas, the highest concentration of one-person households can be found in cities such as New York (where 32% of households consist of one person), Seattle (42%), Atlanta (45%) and Washington, D.C. (48%). The data suggests that people with money are not only choosing to live in expensive urban locales, but also choosing to invest in living in expensive urban locales on their own. 
 
The U.S. Bureau of Labor Statistics’ 2010 Consumer Expenditure Survey further highlights the spending power of single citizens, reporting that the group spends approximately $1.9 trillion annually, with the average singleton boasting $34,471 in discretionary spending. That’s a good $6,000 more discretionary spending than the average married couple and more than $10,000 beyond that of married couples with children. 
 
This spending has benefited everything from the global ready-meal market—which is up nearly 40% since 2002—to the real-estate market. In fact, Klinenberg credits single females—who are two times more likely to buy a home than their male counterparts—with driving the post-recession real-estate recovery.
 
“The spending power of singles is tremendous,” Klinenberg said. “But despite their buying power, singles are a greatly ignored or misunderstood demographic.”
 
And though urban-dwelling singletons may not seem like an obvious group for c-store retailers to target, Klinenberg was quick to point out that some of the greatest concentrations of single men are in construction- and manual-labor-filled rural regions, such as the Dakotas and Wyoming.
 
Whether it’s through ready-made or frozen meals for these rural-dwelling men or single-serve ice cream or yogurts for city-dwelling females, retailers should at least consider this demographic, Klinenberg said.
“This is a really significant transition in how we operate,” he said. “It’s affecting you whether you know it or not.”
 

Creating a Design Experience

Of course, the meeting wasn’t just about collecting insights on different consumers. It was also about learning how best to engage consumers across the board. According to David Weinberger, associate creative director of New York-based brand agency CBX, one major obstacle for this channel is standing out from the competition. 
 
To exemplify this issue, Weinberger began his session by playing two videos in which he interviewed consumers immediately leaving a c-store, asking at which chain they’d shopped. In one video of a generic-looking store, not a single consumer could name the brand they’d just exited. The second video was set at a brand-new Wawa location; the consumers in this video not only knew that they’d shopped a Wawa, but also waxed poetic about many of the company’s signature items, from hoagies to coffee and décor.
 
“It’s necessary to give people something to associate with your store,” Weinberger said. “More than most retailers, c-stores have permission to change. Design really does create an experience, giving people a reason to engage.”
 
Weinberger had several examples of retail chains recognizing the importance of design. McDonald’s recently invested significantly in a design overhaul, testing new chairs, different lighting, earthy greens vs. the company’s signature red-and-yellow color scheme, and natural-looking roofs. Similarly, New York drug store Duane Reade went from a chain New Yorkers loved to hate to one that’s completely focused on a “We know New Yorkers” message, exemplified by store décor, cleaned-up locations and a proprietary Duane Reader publication that advertises the brand’s private-label products in a style mocking The New York Post.
 
Of course, there are plenty of examples of c-stores using design as a way to engage consumers. Take Weinberger’s video star Wawa: When the Wawa, Pa.-based chain made its move into Florida, it looked to residential areas near its new locations to inspire store designs. And Wawa’s innovative design isn’t limited to new builds—it’s also using social media to inspire simple promotions and advertising in its stores.
 
“A lot of interesting design things Wawa is doing are happening on their social-media pages,” said Weinberger, citing the brand’s Hoagiefest and Parched Madness Facebook campaigns, which are now advertised in-store as well. “If you’re doing things that are resonating on social media, think of how you can bring it into the store.”
 

More Than ‘Likes’

Weinberger’s points on Wawa’s social-media success hit on a key question many retailers have struggled with: how to convert social media “likes” into real-world sales. According to integrated digital marketing communications executive Steve Goldner (also known as “Social Steve”), when it comes to social-media ROI, it’s not about “likes” but engagement.
 
Goldner shared two important figures to support this point: On average, engaged consumers spend 30% more, and when a consumer is referred to a brand through social media, there’s a 71% likelihood they’ll make a purchase. 
 
“A pinnacle point of social media success is when you get people recommending your business on social media, although it doesn’t necessarily have to be on your page,” Goldner said. “Social-media marketing is not just about engaging with your audience, but getting them to talk with one another to influence brand awareness, purchase decisions, customer loyalty and brand advocacy.” 
Inserting a brand into a timely situation in a witty, memorable way is certainly one way to get people talking about it, something Goldner describes as “real-time marketing.” Oreo memorably did just that during last year’s Super Bowl blackout, tweeting an on-the-fly ad pointing out “You can still dunk in the dark.” It was a simple campaign people remember nearly a year later.
 
“Most brands are not giving their social media the control to do that,” Goldner said, pointing out that a company must have a lot of faith in its social-media people to allow the kind of quick turnaround required for real-time marketing. Yet successful real-time marketing moves such as Oreo’s get the public talking about the brand—and sharing the content with friends, spreading the message much more quickly than even the most-liked Facebook page could on its own.
 
“When you have more than half a million followers on Facebook, only about 15% will see any given post in their feed,” said Goldner. “The way to up that number is to get your followers engaged and sharing that content on their own walls.” 
 
Real-time marketing isn’t the only way to get social-media users to spread a brand’s message: The best way to accomplish this goal is to develop compelling content. Goldner believes quality content will better engage consumers in the long run than coupons or value-driven campaigns.
 
“People are most likely to share something about a brand via content,” he said. “Successful consumer product goods companies aren’t just doing sweepstakes, but great content as well.” 
 
For example, Red Bull caters to its audience by producing extreme lifestyle content, including last year’s Red Bull Stratos campaign that had Austrian skydiver Felix Baumgartner freefalling in a pressure suit from 24 miles into the stratosphere—thus breaking the sound barrier—before safely parachuting to earth. Although the fall lasted only 10 minutes, Red Bull is still using content from the campaign, including a “What Felix Saw” video, shot entirely from the skydiver’s perspective.
 
Though this is probably a larger-scale project than the average c-store retailer would invest in, there are lessons that can be learned from its success. Goldner encouraged the retailers in attendance to look at their audience and their brand, then develop a quality, meaningful content strategy that speaks to both.
 
“You can’t have social-media success without a content strategy,” Goldner said. “Keeping up with the latest content is the No. 1 reason users follow brands.”

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