According to the most recent data from the US Energy Information Administration (EIA), Americans purchase 140.43 billion gallons of gas in a single year. That’s a lot of trips to the pump—but not necessarily to the convenience stores they’re attached to. In fact, despite all these fuel purchases, nearly 75% of customers aren’t venturing past the pump. That’s a lot of missed opportunity for retailers to increase convenience store sales.
A recent survey published by NACS provides compelling insight on why this is happening. Surprisingly, over 50% of respondents said that they didn’t need anything from the store and over 23% said that they felt they didn’t have time.
The typical fuel retailer averages about five cents in profit per gallon. In-store purchases provide much higher margins and are a critical source of gross profit for c-stores. To that end, this article will highlight how innovative convenience retailers are overcoming the challenge of getting drivers to leave fuel island.
Getting Your C-Store Assortment Right
Drivers aren’t leaving the pump because they think they don’t need what you’re selling or don’t have time to shop. To attack that issue head on, make your c-stores live up to their name by upping the convenience factor. The memory of one experience, when it was a hassle to get in and out of your store, or when your store failed to have one desired item, can last a long time. Thus, it’s critical to ensure that whenever drivers ventures beyond the pump, they easily find what they need.
One way to accomplish this is by marketing-by-daypart. Put simply, this refers to the practice of changing the food you sell and your messaging according to the time of day. For instance, 7-Eleven and Wawa both do a fantastic job of driving customers into their store for breakfast by utilizing in-store and on-pump promotions of fresh pastries and coffee.
Given that breakfast is the most important meal of the day, it’s no surprise then that a recent VideoMining study found that breakfast was responsible for a whopping 28% of c-store foodservice traffic. Though popular for many, breakfast is a small-ticket daypart with the smallest average ticket size at $6.47. Conversely, late-night snackers had the largest appetites ($7.79 average ticket size), but made only 9% of stores’ total purchases.
Once you uncover your own customer demand patterns, you can use in-store and on-pump promotions to market towards your unmet customer demand. For example, Nittany Minit Mart recognized an opportunity to increase lunch sales of fresh pizza. To do so, the stores promoted inside and outside of their locations, and went directly to customers—after each purchase, a cashier placed a promotional stuffer in the customer’s bag highlighting pizza and other fresh offerings.
These examples shows that businesses can’t be satisfied with general industry trends. Convenience retailers must utilize their data to understand how their non-fuel products sell and strategize accordingly. Mark Harrington, VP of Marketing at Clutch, a customer marketing platform agrees: “Statistics and demographics vary by store brand and even location,” Harrington said. “Too many businesses rely on industry wide statistics that don’t end up actually applying to their own locations.”
It’s one thing to understand that each store in your chain is unique. It’s another to understand how to take advantage of that. Convenience retailers use CB4’s machine learning technology to uncover hyper-local demand for specific SKUs at individual locations throughout their chain. The benefits are twofold:
- Store managers discover products that are popular with the customers who visit their specific locations. These products can be overlooked when they’re not top sellers across your entire chain.
- Store managers receive notifications when a floor execution issue prevents customers from easily purchasing one of these local favorites. Remember this is the exact type of situation that can drive a decision to not leave fuel island the next time someone pulls in.
Learn more about how our solution drives same-store growth for leading convenience retailers.
Technology for At-Pump Shopping
Assuming you’ve made your assortment as smart as possible, what else can you do to make your offerings more convenient? Why not bring the store to car?
To achieve this, some c-stores are undertaking initiatives for digital pump displays, along with bringing vending and ordering to the pump. One such offering, Vendgogh, provides at-the-pump technology that allows customers to select, purchase, and pick up products right next to the pump. The machines integrate with POS systems to streamline reconciliation and accounting.
It’s not just smooth from the c-store side, either. For customers, this allows them to refuel their car and get their hands on tasty snacks without ever having to leave the pump. Thus, no taking crying children out of car-seats, no wandering around in-store looking for products, and best of all, no having to look presentable to purchase from in-store attendants.
Despite the operational challenges of installing a display at-the-pump and the high price tag (vending technology can cost up to $10,000), the goal is for machines to pay for themselves and increase convenience store sales. C-stores that sell fuel serve an of 1,100 customers per day. Given that 73% of those people aren’t buying anything but gas, this may be an attractive proposition if you want to increase convenience store sales. That said, the decision to invest here does necessitate an in-depth cost/benefit analysis.
Technology for At-Pump Promotion
Signage will always help to drive promotion, product, and brand awareness. In order to be more agile, however, c-stores are installing at-pump media stations to promote in-store offerings. This can help increase convenience store sales by immersing a captive audience in a brand-driven narrative. The average time it takes to refuel a car is 2-3 minutes. Why not use that to your advantage?
To hone in on fuel customers, companies such as Gas Station TV and All Over Media go as far as creating original content to entice customers. Interspersed with this content are ads and promotions that can be localized and set for different times of day—further enhancing the promotion by daypart opportunity. On its site, Gas Station TV references a quick service restaurant attached to a gas station that utilized its technology to increase store visits by 15%. It’s unclear what results you could if your c-store does not have a restaurant attached.
Gas will always be a low-margin, high volume product. But technological advances now provide innovative ways to entice your customers beyond the confines of the pump and increase convenience store sales. Marketing-by-daypart, crafting smart promotions, and bringing the store to the customer are just a few methods to make this happen.
All these methods tie back to having the right product in-store at the right time. Machine learning helps you crunch your POS data to better understand what’s happening at individual doors and capitalize on hyper-local demand. Winning tools take this a step farther by putting power in the hands of store managers to ensure customers’ desired products are on hand and ready to sell.
Learn how CB4 delivers recommendations that empower store teams to fix costly in-store operational issues and increase convenience store sales at each location in your chain.