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Big opportunities for convenience stores to maximize loyalty programs

customer-loyalty-radarWhen it comes to loyalty programs, the good news is that most convenience stores have one in place. The bad news is that operators aren’t maximizing their programs’ potential, according to the latest report from PDI.

The C-store Shopper Report: How to Fuel Customer Loyalty confirmed the popularity of c-stores and their loyalty programs alike: 89% of adult consumers have visited a c-store in the last six months, and 42.5% of consumers said they belong to a c-store loyalty program, up 6% from 2017.

The report, which surveyed 2,221 U.S. consumers and 239 retailers, paints a picture of an overcrowded market and fierce competition for customer loyalty, while presenting a number of opportunities. The findings also provide valuable insights for Canadian retailers looking to maximize loyalty programs.

“Loyalty programs are extremely popular because they work. The good news is most c-stores have a program in place. The not-so-good news is that they haven’t maximized their programs to increase foot traffic and encourage higher spending,” said Brandon Logsdon, senior vice president, Marketing Cloud Solutions at PDI. “Our latest report provides first-hand data that c-store owners, operators and marketers can use right away to understand their customers better and improve the performance and outcomes of their loyalty programs.”

For example, the study reinforced what most c-stores know: members of loyalty programs are highly engaged individuals with a keen awareness as consumers. Fuel savings remain the number one motivation for c-store shoppers to join a loyalty program for the fourth year in a row, as regardless of good or bad economic time and whether the prices are rising or falling.

Among other key findings are:

  • C-store loyalty members spend more on average than non-members: $11.17 vs. $8.66, respectively. Additionally, c-store members spend on average 29% more per visit.
  • Most c-stores (73%) have a loyalty program in place, with the majority of retailers (97%) saying their programs have been in place for more than a year and many of them for more than five years.
  • C-store operators identified decreasing store visits and attracting new customers as two of their biggest concerns. Additionally, 42% said they feel that training staff to talk about their loyalty program with customers is their top challenge.
  • Other challenges facing c-store operators are keeping up with technology and the pace of change (55%), preferring a mobile app for tracking and redeeming (52%) and concerns about customer fraud (43%).

“Having a loyalty program is not enough in today’s competitive market. What’s crucial is the program’s ability to keep existing customers returning and spending more with every visit, and convert regular consumers into loyal members,” Logsdon stressed.

While 72% of c-store operators collect customer data, they don’t necessarily use or take advantage of the information to improve their loyalty programs, according to the report. Some of the opportunities that are within reach for retailers upon collecting data are: encouraging participating in a loyalty program, personalizing messaging and communications, and developing and deploying customized offers and promotions.

Originally published by Convenience Store News.


Consumer Insights: What does ‘convenience’ really mean to today’s c-store shoppers

CSN_AisleLogo_500x400Traditionally, convenience stores have filled the definition of “convenience” by location mostly. The channel is known for its prime locations, around-the-clock service and small store size.

While location is still important among convenience store shoppers, the word “convenience” has evolved to now evoke multiple store- and experience-related attributes, according to the findings of the 2019 Convenience Store News Realities of the Aisle consumer study.

For a majority of shoppers, it boils down to a convenient experience.

When asked what defines convenience, 44 percent of shoppers polled cited quick/quick visit and 13 percent said a store is convenient if it is close, close to home or close to work.

Convenience also means “easy.” Specifically, 22 percent of those surveyed defined convenience as easy, 13 percent defined it as easy to get in and out, and 7 percent defined it as easy access.

What a store has to offer is important, too, according to shoppers. In tandem with the expectation of an easy experience, 5 percent of shoppers said a store that offers a convenient shopping experience is one that is easy to shop and has what they need.

Overall, the definition of convenience for most shoppers is an experience that ultimately saves them time and effort. Convenience is quick, easy, close by and allows a shopper to get what they need, when they need it.

Convenience stores that focus on simplifying the shopping and purchasing experience are more likely to see an uptick in foot traffic and an increase in basket size.

SHOPPING BEHAVIOURS

For most of those surveyed, stopping by a convenience store has become a habit, with nearly two-thirds of all shoppers (63 percent) visiting at least weekly. This is particularly true for the younger generations, as 66 percent of Millennials and 65 percent of Generation X visit c-stores weekly, compared to 56 percent of Baby Boomers.

Shoppers habitually visit the same location, with 72 percent of c-store shoppers reporting they typically visit the same store each time.

When rating the store they shop most often, respondents gave “excellent/very good” ratings to trip speed (76 percent), friendly staff (64 percent), store organization (63 percent) and cleanliness (63 percent). Conversely, categories with the highest “fair/poor” ratings included price (30 percent), quality of prepared food (21 percent) and loyalty program (19 percent), indicating room for improvement in these areas.


Curb appeal and promotions drive fuel-only customers inside a C-store: Study

The majority of fuel sold in North America is sold at convenience stores. However, getting motorists to come inside the store after filling up has been an ongoing challenge for the convenience channel.

Citing State of the Industry data from NACS, the US-based association for convenience and fuel retailing, GasBuddy noted that a convenience store’s inside sales generate almost three-quarters of all gross profit dollars. Yet, some estimate that a similar number of consumers fill up and drive away — never coming inside to make additional purchases.

Forecourt_Lg_032619Converting those forecourt customers to inside customers is not impossible. In a new study, Canopy to the Store, GasBuddy found that conversion depends on a c-store operator’s ability to meet consumer needs of safety, cleanliness and hospitality. Additionally, consumers show “a strong interest” in specific strategies and promos that can move them from the pumps to the store.

First impressions count: Think curb appeal

GasBuddy released a report summarizing the findings from its surveys conducted in July 2018 and December 2018. Chief among its findings: Curb appeal matters.

Calling the forecourt “the first handshake that welcomes customers to the store,” GasBuddy explained that consumers are unlikely to go inside a store if they perceive it as dirty, boring or unexceptional. Reputation matters as well.

Frequent customers cite the following factors as having a strong or moderate influence in their opinion of a store before stepping inside:

  • Store design and upkeep (82.54 percent)
  • Cleanliness of the fuel area (79.7 percent)
  • Quality of lighting (79.6 percent)
  • Brand reputation (58.6 percent)
  • Opinions of friends and family (55.12 percent)

Moving inside, GasBuddy found that restrooms matter. According to the survey results, 22.6 percent of consumers said they frequently make a purchase after using the restrooms at a c-store. Another 56 percent said they occasionally make a purchase.

However, the restrooms must be clean. Nearly two-thirds of consumers said they have visited a gas station’s c-store with the intention of using the restroom, but decided to leave and go elsewhere.

Top reasons for avoiding a c-store’s restroom are:

  • Restrooms were dirty;
  • Restrooms were outdated and/or poorly maintained;
  • C-store was outdated and/or poorly maintained;
  • Restroom required a key or an access code; and
  • Customer did not feel safe.

GasBuddy’s report also revealed that knowing that a convenience retailer was committed to clean, quality restrooms would probably influence nearly 42 percent of consumers and definitely influence 27.19 percent.

“Every restroom visit is a sales opportunity. It’s a chance to connect with fuel-only customers who would otherwise rarely — or never — wander inside the store. Unfortunately, retailers who provide outdated, dirty, or poorly maintained facilities are not equipped to leverage this opportunity,” GasBuddy stated, calling restrooms “a litmus test for overall store quality.”

Offers and promotions drive sales

Beyond the look and feel of a store, convenience store retailers need to reach fuel-only consumers where they are — on their phones. According to GasBuddy, more than half of consumers look at their smartphone while refueling and, more notably, nearly three our of four consumers aged 18 to 34.

“This opens many opportunities to drive in-store sales through relevant offers and promotions,” the report noted.

Fuel discounts can hit the spot. In a recent GasBuddy study, 65 percent of consumers said gas prices impact their ability to spend money on other items and services.

Relevant orders also deliver results. When asked which kinds of mobile ads influence their decision to visit a convenience store brand, consumers said:

  • Healthy food options;
  • Redeemable coupons for convenience store products;
  • Loyalty rewards for convenience store products; and
  • Loyalty rewards for fuel savings.

The Canopy to the Store report also found that nearly 71 percent of consumers surveyed belong to a rewards program for a c-store or gas station. Of those, 48.78 percent use a rewards program very frequently, 34.2 percent somewhat frequently, 12.84 percent somewhat rarely, and only 4.17 percent very rarely.

Minimal savings and discounts on products consumers don’t purchase are among the reasons why they rarely use a rewards program.

A c-store retailer can change consumers’ minds, however, if the program offers consumers the ability to: build up points to spend on what they choose; earn discounts on fuel for in-store purchases; and get discounts on products they purchase daily or weekly.

To download GasBuddy’s full Canopy to Store report, click here.

Originally published at Convenience Store News.