- Leaders need to go beyond being the most convenient option to being one that also offers top quality products, speedy and accurate service, and a variety of shopping methods.
- The #1 reason respondents were not part of a loyalty program was that they feel it takes too long to build up enough loyalty points to redeem a reward.
- While consumers were initially slow to adopt alternative shopping methods with convenience stores, Intouch Insight saw a recent spike in the use of delivery from third party applications.
With compounding external factors such as supply chain pressures, labor shortages, and rising inflation impacting the daily operations of convenience stores, consumer insights serve as a foundation for informed action. According to this year’s Convenience Store Trends Report from Intouch Insight Ltd., convenience does not trump brand loyalty for today’s shoppers.
“In a world where channel blurring is forcing c-stores to compete with other verticals such as grocery or quick-service restaurants (QSR), leaders need to go beyond being the most convenient option to being one that also offers top quality products, speedy and accurate service, and a variety of shopping methods,” Cameron Watt, President and CEO at Intouch Insight, said in a release sent to Wholesale Central.
The Intouch Insight report highlights five key trends around consumer habits and purchase preferences that directly impact convenience stores as well as critical insights on how brands are performing in relation to these trends:
1. Competition with Quick Serve Restaurants
Convenience stores offering ready-made food are increasingly in direct competition with quick serve restaurants, with the potential to win customers away from traditional fast-food brands when they are more conveniently located or offer a faster alternative to drive-thru. Ready-made meals at convenience stores proved popular, with 76 percent of those surveyed indicating that they have purchased prepared food from a convenience store.
Respondents gravitate towards c-stores for grab-and-go meals because they can purchase gas at the same time. However, they can be steered away because of high prices and lack of alternative shopping methods that allow them to remain in their vehicle. The brands that consumers can rely on to have their favorite food items in stock are the ones that will continue to see their prepared food sales increase.
2. Convenience Driving Coffee Sales
Coffee is a major commodity for today’s retailers, with 75 percent of consumers reporting they regularly purchase coffee. Convenience stores are already a major player and, of consumers who reported purchasing coffee, 88 percent said they had purchased coffee from a convenience store. However, to retain their share of the market, convenience stores need to ensure they can deliver a quality product and excellent customer experience.
Generally, convenience store brands score quite well when it comes to key elements of their coffee service, like cleanliness and having equipment in good working order. Even in these areas, however, there can be the need to improve in busy times and in certain locations. One additional area of opportunity when competing with traditional coffee shops would be to offer items such as milk alternatives. Intouch Insight’s data shows that younger consumers are purchasing prepared food with greater frequency from convenience stores, and since milk alternatives are a popular choice among this demographic, doing so would put convenience stores on even footing with their competition.
3. Capitalizing on In-Person Interactions
After years of forced closures and social distancing, many brands are finally re-connecting with their customers face-to-face — but for convenience stores, many shoppers are completing their purchases at the pump. This means it is even more imperative to make consumers feel appreciated and valued when they enter your locations.
When asked their preferred payment method for gas, 83 percent of consumers said they would rather pay at the pump. This means a large number of customer interactions with convenience store brands happen without them stepping foot inside the location. Because of this, the impression made by a location’s forecourt can be a key factor in whether they walk into the store or ever return to purchase something else.
The main aspects that could use improvement in this area are ensuring pump islands are fully stocked at all times, as well as keeping the main entrance clean and free of debris. It is easy to forget about the pumps when there are customer demands happening in-store, but given the high traffic and potential impact of the fuel experience, it is vital that procedures around checking and restocking the pump area, as well as the cleaning of location entrances, are updated and adhered to.
4. Opportunities Around Customer Loyalty
Loyalty programs are very popular, with 94 percent of consumers reporting they are part of at least one. However, convenience stores did not make the top three most popular rewards programs. By doing more to promote their loyalty programs and the ways in which consumers can earn rewards, convenience stores will be in a better position to influence customer purchasing habits.
The #1 reason respondents were not part of a loyalty program was that they feel it takes too long to build up enough loyalty points to redeem a reward. Regular purchases from the same business make points accumulate faster, which can explain the popularity of grocery stores over restaurants, but the same should be true of convenience stores.
Mystery shopping data reveals that a lack of in-store promotion could be a major factor in the lower adoption of loyalty programs with convenience stores. In a recent study of convenience store brands across the U.S., it was reported that cashiers only mentioned the loyalty program in 28 percent of customer interactions. Additional signage promoting loyalty programs, as well as training cashiers to inform customers of the benefits and savings associated with membership, would boost consumer participation.
5. Rising Use of Alternative Shopping Methods
While consumers were initially slow to adopt alternative shopping methods with convenience stores, Intouch Insight saw a recent spike in the use of delivery from third party applications, representing a growing revenue stream for operators. This growth can be attributed to increased adoption of delivery services, while the use of curbside pick up continues to slowly decline.
In a recent mystery shopping study conducted by Intouch Insight, they examined the ordering and fulfillment experiences of convenience store brands through their own 1st party mobile apps versus 3rd delivery partners. The results showed that 1st party apps performed better across key metrics including overall satisfaction, likelihood to use again, adherence to estimated wait times, and properly processing orders — with accuracy and timing showing the biggest difference between the two channels.