Convenience stores stand in a unique position in the modern retail landscape. They hold the indispensable role as an essential brick-and-mortar establishment in an increasingly digital world, and retailers who have harnessed the unique assets of being in that position are at the forefront of groundbreaking new ways to engage with their customers.
Let’s face it, customers today expect more than just a friendly greeting from employees and a speedy transaction. We live in a world of curated subscriptions and tailored algorithms where personalization reigns supreme in brand satisfaction. 80% of consumers say they’re more likely to do business with a company that offers personalized experiences and even in the era of privacy and security concerns, a whopping 65% of shoppers still say they’d share their data for value-adding personalization.
Understanding The Shift
With the onset of the COVID-19 pandemic, consumer perceptions of convenience stores shifted dramatically. No longer viewed solely as a convenience, these stores became vital hubs for essential items, including groceries like milk, offering a safer alternative to crowded big-box stores. The April 2020 NACS Retailer Member survey underscored the industry's response to the pandemic's impact. While overall foodservice sales dipped, a notable 52% reported increased grocery sales. To adapt, retailers implemented various measures such as introducing online ordering and curbside pickup to strategically increasing inventory on larger-sized options of essential items like toilet paper to meet the increased demand.
Although the demand for essential grocery items has decreased in the last few years, many of the consumer behaviors adopted during this period continue to shape the convenience store landscape. Recognizing the importance of customer engagement during uncertain times, retailers proved their business to be essential for customers through personalized rewards that fosters stronger connections with their patrons both on and off-site.
The Power of Personalization
Personalization has emerged as a key strategy for convenience store retailers seeking to differentiate themselves in a crowded market. By tailoring rewards and experiences to individual preferences, retailers capture the attention of consumers and cultivate loyalty in an increasingly competitive landscape. In essence, convenience stores are uniquely positioned to lead the charge in personalization within the retail sector. Their frequent foot traffic and daily interactions with customers present ample opportunities to leverage data and deliver customized experiences. Embracing personalization is crucial for convenience store retailers seeking to thrive in a market dominated by big chain competitors. It's not just about being convenient—it's about being the preferred choice for consumers on their daily journeys.
A staggering 83% of American consumers visit a convenience store each month, yet only 20% of them come inside the store from the pump. For this reason alone, gas centric loyalty programs fail retailers due to their razor thin margins. Retailers who utilize personalization to increase pump-to-store traffic make visits inside the store a part of consumers' daily routines, whether it's grabbing a morning coffee or picking up snacks on the way home from work. But how can retailers ensure their loyalty offerings make consumers stop at their store? With an average of a dozen other convenience stores along the way, how does one ensure that their store stands out? The answer lies in personalization.
Consider this scenario: On my way home, I stop at the grocery store for dinner ingredients and eye a tempting chocolate bar at checkout. Distracted by a text, I forget it and make my purchase. Afterwards, I go to my preferred gas station, put in my Alt ID at the pump, and start filling up the tank. As I’m waiting, I get a text message from the c-store telling me about a promo on my favorite chocolate brand. The store is running 10 different promos at the moment, but this is the one that is being texted to me because my shopping history shows I’ve got a major sweet tooth. I go in to get my deserved treat and impulse pick up a bag of salt and vinegar chips that I know my partner will love. I’m also running low on milk at home and I forgot to grab one at the grocery store, so I’ll just do it now. I take my items to the checkout, automatically get my discount, and go on my merry way. What started out as a quick fill up trip has turned into a little mini shop of some essential items and treats for the family. This personalized touch from my local convenience store make it a brand that I will go out of my way to support.
Loyalty customers who receive personalized promotions are much more likely to come inside the store to make additional purchases and personalized promotions, on average, double their average ticket size. 49% of consumers have reported making an impulse purchase after receiving personalized recommendations and 40% of consumers say they will spend more when encountering a highly personalized experience. You cannot be everything to everyone. Retailers who cultivate special relationships with customers reap the benefits. A one-size-fits-all approach not only does a disservice in creating meaningful relationships with your brand, but it also leaves valuable marketing dollars on the table. If retailers put out a store wide promo of Chocolate Bar A for anyone who comes into the store, the true convenience shoppers are not going to notice the discount they are receiving and retailers are not cultivating relationships with true budget and loyalty shoppers because there is no incentive to join a loyalty program.
Driving Engagement Through Diversity
Much like how rewards are personalized for every consumer, the way in which they engage with the brand must be diverse for a wide swath of engagement types. In my chocolate bar example, it was a pump text that brought me into the store. Another customer might see signage showcasing new deals and opt to scan a QR code that will lead them to a personalized offerings page based on their shopping industry. Some may prefer offers through mobile apps, while others respond better to targeted email or social media campaigns off site. By diversifying engagement channels, retailers not only boost digital offer redemption rates but also empower customers to choose how they want to engage. By offering myriad avenues for engagement, retailers afford customers the autonomy to interact with personalized offers on their own terms, fostering deeper levels of participation and brand loyalty.Top of FormBottom of Form
Much like a one-size-fits-all promotion, engagement is equally ineffective when it fails to consider individual preferences and needs. The app-only engagement model has disappointing results in the c-store sector. On average only 7% of customers download a c-store mobile app, and then only 14% of that limited 7% open the app once a month. The reason for these staggering low usage rates are a combination of things. One – many consumers are not going to take the time to download yet another app on their phone to complete the enroll process. When retailers vie for attention alongside giants like Amazon and Starbucks for real estate on a consumers' phones, the last thing you want is for downloading an app to hinder engagement with your brand. Likewise, mobile coupons requiring barcodes add friction points at the point of sale and have far fewer redemptions on average than other engagement methods.
Convenience store shopping experiences must be...convenient. Retailers who offer a frictionless redemption process see far higher redemption rates than traditional mobile coupons. A rules based engine flags the discount on the backend of the system, and when a customer inputs their alt ID at checkout, the discount is automatically given without any additional steps. The clerk doesn’t require additional training to complete the transaction and the customer doesn’t need to take extra steps to show a mobile coupon on their phone or pull up the text message that shows the promotional offer.
Future Of Engagement
Across industries, there's a noticeable shift towards embracing Progressive Web Apps alongside traditional mobile apps (referred to here as native apps). Unlike native apps, PWAs seamlessly integrate with web browsers and their cross-platform compatibility ensures widespread accessibility without the need for users to download a separate application. Furthermore, unlike their counterparts, PWAs can be readily indexed by search engines. This indexing capability transforms PWAs into powerful tools, as they become discoverable through common search queries, enhancing brand visibility. In essence, PWAs offer a versatile and efficient solution for retailers, bridging the gap between the old, limited mobile app model and web-based accessibility. This symbiotic relationship between PWAs and native apps enriches the digital landscape, providing consumers with diverse options while empowering businesses to reach broader audiences with ease.
Final Thoughts
Ultimately, personalization isn't merely a passing trend; it's a strategic imperative that lies at the heart of successful convenience store retailing. Recognizing the importance of personalization in today's consumer-driven market, the retailers curating tailored experiences for customers are fostering strong connections with patrons both on and off-site that build brand loyalty. By understanding shifting consumer behaviors and harnessing the power of data, convenience store retailers have elevated loyalty offerings to new heights, driving increased pump-to-store traffic and higher average ticket sizes. Moreover, by diversifying engagement channels and embracing innovative technologies like Progressive Web Apps, these retailers are ensuring convenience and accessibility. As convenience stores continue to evolve, personalized rewards will remain at the forefront of their strategies, solidifying their position as leaders in the retail sector.