How c-stores can make the most of the holiday sales uptick
Holidays are always bringing increased sales for c-stores. Christmas, Valentines Day, Easter, Mother’s Day are just a few of the traditional celebratory days and holidays that bring customers into a store looking to purchase items to celebrate. Then there is the growing recognition of the importance of other traditions and celebrations that can bring customers into the store.
Just two months ago, c-stores were carrying chocolate hearts, candies, and other items to celebrate Valentine’s Day which the Washington, D.C.-based National Retail Federation projected that this year would generate US$27.5 billion on Valentine’s Day, up from last year’s US$25.8 billion. Easter looks to be just as successful with the Canadian-based Retail Council of Canada projecting that 50% of shoppers are gearing up for this coming Easter holiday with some 85.7% of Canadian shoppers saying they plan to maintain or increase their spending for the season.
One expects many c-stores will begin stocking an assortment of chocolate treats, cards, and other items in anticipation. The question for those c-stores is not just knowing what to stock but in what numbers and at what price. Seems simple enough, you may say: take what you did last year, extrapolate what growth one expects, then stock and price accordingly.
There is just one problem. This year is proving to be as volatile as the political landscape. With tariffs, economic uncertainty, and volatile prices for such things as cocoa that are making prices rise for chocolate-based confections (just to take one example of pricing volatility) makes those calculations harder.
Matt Pavich, senior director, strategy and innovation with Revionics, says right now and going forward for the years to come, c-stores need to understand the importance of data, especially the right kind of data for their operations, and “really understanding that data and understanding what is important to your customers.”
“Having advanced analytics is going to be critical so you can have the right strategies in place and to have the right mix of items in place for the holidays,” he continues.
Pavich says that in today’s retail environment, especially for c-stores where pricing, customer demographics, sales trends and even tastes, play a crucial role in sales, having access to tools that allow one to gain a granular understanding of customer behaviour and pricing will be critical. C-stores present unique challenges for data analytics as what drives customer behaviour, pricing and sales is different from other retail market segments, especially holiday sales.
“The Mother’s Day experience in a c-store is going to be very different from the Mother’s Day experience in a jeweler or a mass market merchant,” he says. “It’s very important to follow the fundamentals of business, but you will need to really listen to your customer, looking at their data and working with your cost structures to support them, to find effective promotions that are not draining on your resources and bringing in the right mix of items.”
Pavich says in the coming years, AI and other technologies driven by AI-supported systems will help c-stores and their suppliers understand customer data, pricing trends and sales data in greater depth and help predict buying behaviors and product trends. This then will help them make decisions of what needs to be on their shelves, especially for the holidays.
“AI is going to pick up on historical trends from what your customers have spent before, and it will even pick up on the nuances of what is growing in the market, what is trending and even predicting what might happen in the near future,” Pavich continues.
This will be most important when considering how global changes to supply chains and the price of ingredients will impact the prices on goods one stock on one’s shelves. Take chocolates, that perennial favourite during the holidays, from Valentine’s Day, to Easter, to Mother’s Day to even Christmas and birthdays. It is a sure-fire seller. Only the price of chocolates has been going up as global cocoa prices – a key ingredient in making chocolate – has been increasing.
How then should one price those chocolate items a c-store will carry to consider increasing prices, and increasing competition from other c-stores, retailers such as grocery stores, big-box stores and even specialty confection shops, all of whom are competing for a c-store’s customer? Price something too high, and business goes elsewhere; too low and your margins become too tight or even unprofitable. Do you even have the right chocolates, say a new flavour or item that is hot amongst buyers for the holidays?
“You have a whole bunch of challenges right now,” Pavich says. “You need to think about promoting the right products and doing so at the right price and finding out if what you are doing is breaking through to your customers. Easter can be challenging. You can now buy your Easter candies at a grocer store just as easily as you can buy them from a c-store. So how do you market your candies, how do you message to your customers, what would be a good offer for them to make them come into your store and buy the candies from you, and how do you communicate to people your offers, say at the gas pump if your store is part of a gas operation or through a loyalty app?
“How do you find the right category of products and price them and even eliminate ineffective promotions,” he continues. “That is when you are going to need and use those power analytics and tools.”
