Known for a full-service convenience, fuel, and car wash offer, along with a strong partnership with Tim Hortons, Esso emphasizes the one-stop-shop aspect of the convenience channel. But as demographics and desires change, Esso is taking a closer look at the products that will draw loyal consumers in store.
We recently spent the afternoon with Erica Ackermans, convenience retailing manager with Imperial Oil, to find out how the evolving Canadian consumer is impacting the c-gas retail landscape.
YCM: What major trends are you witnessing in the Canadian convenience-gas channel?
Erica Ackermans: I think a continuing trend our industry is facing is the need to revamp our product mix to meet up with consumers’ changing needs. If we think about some of the supporting categories like newspapers and publications, in recent years, we’ve really seen consumers move away from those to digital publications. So we need to update our product mix with offers that are reflecting those changing needs.
Another trend that we’re looking to tap into is the changing demographics in the Canadian marketplace, and an ability to respond to that. Ethnic groups are becoming a bigger segment of our population, and there are particular products we can offer to appeal to those groups.
YCM: What is the biggest challenge facing the c-channel today? What are the greatest opportunities for success?
EA: Probably the biggest challenge is increasing competition from other channels. We see grocery stores with extended hours of operation and now pharmacies with expanded food and snack offers, going after what might have traditionally been c-store customers.
We really need to tap into what is our competitive advantage: the one-stop-shop, the quick in and out, to keep people continuing to come into our stores. In our network, one of our strategies is we have the c-store offer, we have car wash to support it, along with fuel, and we typically have a Tim Hortons offer in a lot of our outlets, for people who are looking for their morning coffee or afternoon snack. So you can meet a lot of consumer needs in that one location very quickly.
EA: If you think about the female shopper, they would rank things like store image, cleanliness, safety, and lighting probably much higher in importance than male shoppers typically would, so it’s important to meet those criteria. The female shopper also tends to be looking for healthy options a bit more than male shoppers, so get away from the traditional c-store combos of chips and pop, and try something like a granola bar and water combo to appeal to that segment.
And when we think of ethnic groups, certainly in grocery their needs may be different from the typical grocery offer, so there’s an ability to look at different offers you could use to cater to the specific market. We’re looking into specific planograms that respond to certain ethnic groups, giving the flexibility to the retailer to choose what option would be best for their location.
YCM: What role do loyalty programs play in meeting the needs of today’s consumer?
EA: I think loyalty programs are almost a ticket to the game in the c-channel these days. Customers are looking for extra value, and that’s something a loyalty program can really respond to. We look at our loyalty programs as targeting two different consumer groups. There’s Esso Extra, which is more immediate – it doesn’t take long to earn points toward a lot of those items, so it responds to a lot of convenience store customers. And then Aeroplan is for those loyal consumers who are working toward a bigger trip or aspirational item.
In the convenience store, we often will tie some of the specific point programs into our c-store items. So for example, it might be bonus Esso Extra points if you buy a particular item in the store. It’s a great way to drive those customers who are engaged in the loyalty program to grow their spend with us.
A loyalty program can really play a key role, because you can use the data from your loyalty consumer to identify their habits. It allows you to provide a much more targeted offer to your most important segment group: your loyal customers.
YCM: What advice can you provide for creating the optimal in-store environment?
EA: I think it’s important to understand the traffic patterns within your store format. Make sure you’re laying out the store both to appeal to those consumers who want to get in and out quickly, but also have some impulse areas in key spots so you can grow your sales or basket size. We also can’t underestimate the value of good execution: store cleanliness, lighting, and not having an over-cluttered location that’s difficult to move around in.
YCM: How does a strong foodservice program contribute to this ideal shopping experience?
EA: A food program is a vital component of the c-store offer. In our experience, the right food partner can drive an increase in store sales of anywhere from 5- 25%. It really helps build traffic into your location and if you find the right partner, it can be very complementary to the overall store offer. Tim Hortons has done a lot of interesting things on their offer side recently in some of our locations. It really adds to the overall look of the site when you have a food partner that’s keeping up on the image side and expanding their product offering, as well.
YCM: What do you expect the convenience channel to look like in the next three years?
EA: I think technology will continue to play a bigger role. New or emerging payment technologies will become a much bigger factor on the convenience side of things, like mobile payment and the ability to do targeted offers to your consumer base. Retailers really need to stay current and stay on top of those emerging trends to be successful longer term.
YCM: Can you offer any other advice to help retailers win with customers in the c-gas channel?
EA: You can’t underestimate customer service, and a lot of retailers sometimes do. They spend a lot of time working on re-imaging the product offering, and don’t think about the personal side of things. Make sure you’re hiring the right people who work well with your customer base, and ensure your attendants can respond to the needs of your customers. If there are certain demographics in your area, having attendants who can speak in their preferred language goes a long way to bring consumers in.