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10/18/2022

C-store loyalty customers’ purchasing behaviour defies inflationary pressures: Paytronix report

On an annual basis, spend skyrocketed on non-fuel items.
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paytronix loyalty report

C-store loyalty customers didn’t cut back on in-store visits and purchases in 2021 despite high inflation.

That is according to the second annual Paytronix Annual Loyalty Report 2022. It found loyalty customers increased their spend per visit by 25% last year versus 2020.

On an annual basis, their spend skyrocketed – by almost 40%. This was driven in part by fuel purchasers paying more per gallon for gas, but also visiting 8% more often compared to both 2020 and 2019.

However, spend per check and on an annual basis increased across all categories, not just for gas.

And while Paytronix data shows that the percentage of convenience store checks with fuel rose in 2021, loyalty members only included fuel purchase in 35% of their visits. In other words: they were still buying snacks, coffee, food, lottery and other c-store staples, even with price hikes.

Lee Barnes, chief data officer at Paytronix Systems Inc., says it is encouraging to see “loyalty customers responded to rising prices by purchasing more from their favourite brands. It shows that, as inflation increases, brands with loyalty programs will continue to attract customers.”

Paytronix is a provider of software-as-a-service customer experience management solutions for convenience stores and restaurants.

Across both channels, 2021 saw the highest annual spend per guest of any year for which Paytronix has data. The ice cream/snack/coffee segment stood out among all others, with loyalty customers increasing their spend on this category by 20% in 2021 over 2019.

“We are seeing more convenience stores position themselves as a destination for items beyond fuel by associating their brand with specialty items such as coffee or ice cream,” notes Barnes.

Tapping into the ‘top tier’


The Paytronix Annual Loyalty Report 2022 also identified a “top tier” of loyalty members. It found 8% to 10% of loyalty customers account for 40% of visits in c-stores, averaging 32 visits per month.

Given the visit frequency, they are likely purchasing coffee and some sort of snack or treat on a habitual basis. “These are the loyal snackers whose loyalty you want to maintain,” notes Barnes.

In contrast, loyalty members only purchasing fuel tend to visit just once or twice a month.

As for the average fuel-and-merchandise loyalty customer? They visit around eight times per month. This is a segment Barnes recommends c-stores try to tap into and grow more of into top-tier loyalty customers.

“These are the visitors you can encourage to visit more often,” says Barnes, “whether through a monthly coffee subscription, a discount on a breakfast sandwich or any other incentive.”

Changing demographics

The report also revealed that convenience store loyalty members declined in 2021 versus 2019, by 16% due to an ongoing generational shift.

While still the largest age group within the loyalty segment, members ages 56 and over retracted significantly over the past two years.

Meanwhile, “older millennials” (ages 36-plus) have become the second-largest cohort among c-store loyalty members, moving ahead of “gen X” (ages 46 to 55) over the past two years.

They are followed by “younger millennials” (26 to 35) and “gen Z” (15 to 25). While smaller in number, these two age groups are enjoying growth trajectories along with “older millennials.”

Barnes suggests offering promotions with kids in mind to millennials, given they are starting and growing their families.

“This has the potential to cement loyalty from parents,” he says. “And for gen Z, consider ways to make your menu more appealing to younger patrons and to increase mobile accessibility. “

Given gen Z is “extremely comfortable with digital channels and have increasing expectations for their relationships with convenience stores,” Barnes says, “they are starting to look for online ordering, particularly for food items.”

“And if there is a loyalty program, they expect to be able to use those benefits however they shop,” he adds.  “Creating a loyalty program that customers can access through their phone is absolutely essential for convenience stores in 2023.”