As the petroleum retail market becomes ever more competitive, the winners in today’s economy will be the ones who go beyond service to deliver a satisfying retail experience. And one way to do that is through paying attention to the retail trends affecting the industry.
<strong>Trends in Store Design</strong>

Ask yourself what attracts you to your favorite retail store? Is it the choice of products? The level of customer service? Or the functionality of the space? Today’s c-stores often lack the store design ‘wow’ factors that improve consumers’ shopping experience. From cluttered POP displays to confusing traffic flow, many c-stores leave store design at the proverbial front door. According to Joseph Bona, president branded environments at CBX, however, the retail landscape within the convenience retailing environment is becoming more sophisticated and focused on meeting consumer expectations. “Competition for convenience is everywhere—from drugstores and dollar stores to the smaller formats being opened by traditional Big Box retailers,” Bona says. “As a result, c-stores that don’t take steps to remain relevant in an ever-demanding, consumer-driven marketplace will be left behind.”

Bona says the most important aspect of today’s fuel marketing/c-store retail environment is the ability to connect with consumer emotions. “It’s no longer just about selling like items at like prices in like environments,” Bona says. “Today’s consumers have far too many choices where they can go to meet their everyday convenience needs, so those retailers who can provide value beyond selling goods and move toward selling experiences are the ones who will survive and succeed in the future.” This will require engaging all the senses and bringing an element of entertainment into the retail space.

Outside the c-store arena, there are several prime examples of retailers that have embraced this trend in making an emotional connection with consumers. In grocery, Trader Joe’s provides a quirky attitude with quirky named products that you can only find at their stores.

“It’s the overall adventure of seeing what’s new and the thrill of the hunt for proprietary ‘indulgent’ specialty items that you can’t get at your local supermarket,” Bona says. Indeed, as Brad Panarese, vice president, retail design at Tris3ct, a Chicago-based independent ad agency that specializes in retail marketing, explains, shopper expectations continue to evolve related to convenience, better quality foods/products and integration with technology, forcing retailers to respond with designs that speed checkout and navigation.

“This is true in nearly every category of retail,” Panarese says. “The shift in demographics is a major contributor to shopper expectation as female and Millennial shoppers comprise a significant portion of today’s category consumers.”

Panarese agrees that the biggest change in c-store environments is being caused by the introduction of smaller formats by retailers such as Wal-Mart and Target. “Building on the trend of international retailers such as Tesco, RetailNet Group research estimates that 95% of net new store growth between now and 2017 will come from small store footprints—5,000 square feet or smaller,” Panarese says.

Michael Harris, managing partner at Boston-based Match Marketing Group, says one of the hottest trends is the creation of a “local marketplace” ambience within the c-store format.

“The idea is to create an environment that appeals to the changing demands of shoppers with a format that is operational but conveys the perception of constantly changing products and services—hence the marketplace motif,” Harris says.

Convenience retailers also see an opportunity to get a greater share of trips. Today’s fuel marketers have moved far beyond their original reason for being—GLT (Gas, Liquor, Tobacco). Partly this is in response to changing consumer trends and desires, but also as a response to greater competition from large format stores and chains opening local small footprint stores, as well as greater competition from the rapidly expanding drug store convenience and dollar store formats.

“The overriding dynamic is ‘quick trip’—in/out mission based shopping,” Harris says. “The perception of convenience stores has been reversed in recent years—from a gas station with a convenience store attached to a local store with a gas station attached. We’ve seen convenience retailers embrace everything from premium coffee to artisan and craft beers to become more of a destination in their local market.”

<strong>Trends in Offering Fresh Products</strong>

These days, more and more fuel marketers see foodservice, specifically fresh food options, including deli programs, as an excellent way to grow their business. Operators have valid, bottom-line reasons for offering enhanced fresh, healthy items, including saving labor, saving time, and maintaining consistency of menu offerings.

As consumers are inundated with the importance of embracing healthy lifestyles —eating more fresh and less “fast” food—fuel marketers and their c-store counterparts are jumping on the fresh product “bandwagon” like never before.

So why should marketers pay attention to this trend? Quite simply, it offers a new revenue stream that had previously been ignored by the c-store segment.

“This trend has to do with what customers are asking for and the general health consciousness of consumers as a whole,” Bona says. “Traditional traffic drivers, such as cigarettes, have been in steady decline along with retail margins, leaving c-store operators little choice but to look elsewhere to recapture business.”

The desire for shoppers to have more fresh premium products is still an expectation that impacts c-stores. According to Panarese, research confirms that more than 60% of shoppers think that convenience stores should offer more healthy foods.

“Retailers such as 7-Eleven and Casey’s General have responded with staff to prepare new products, such as egg white sandwiches for breakfast, custom deli sandwiches during lunchtime, as well as fresh pasta, pizza, and burgers,” Panarese says.

Additionally, with people eating and snacking multiple times a day or week, foodservice, when executed to high standards, can provide the impetus for replacing lost volume and driving higher sales.

“As a result, c-stores now find themselves competing with the likes of Quizno’s, Subway, and McDonalds, offering freshmade salads, cut fruit, yogurt bars, and higher quality sandwiches, wraps and paninis,” Bona says.

So how are consumers responding to this trend toward fresh product offerings in the c-store marketplace? “I always believe that people eat with their eyes before they taste their food, so if the store environment, beginning from the curb, doesn’t convey a sense of being a professional food establishment, customers will keep driving by,” Bona says. “The best-in-class retailers like Wawa, Sheetz, and Rutters, have proven that, when done right, customers will return more often.”

Bona says it’s all about making a promise on the outside and then, once over the threshold, delivering on that promise through experience, quality of products, and great customer service.

“The competitive landscape will continue to shape and drive change in the industry,” Bona says. “With discount stores and drugstores competing for fill-in occasions, QSRs developing stronger coffee and breakfast offers, and big box retailers building small format stores, c-stores have to move beyond selling daily commodities and concentrate more on serving the many different meal occasions that people have everyday.”

And while some retailers are moving the needle on premium offerings, shoppers still look for the big sellers that have made c-stores popular, such as slushies and oversized sodas.

“Consumers have responded favorably to new menu offerings, but still desire more traditional tactics that are still effective for grocery, such as coupons and special promotions,” Panarese says. “Given that loyalty programs continue to be effectively associated with gas purchase, broadening offers to include special meal deals will expand sales and maintain shopper interest.”

<strong>Trends in Technology</strong>

With each new day, technology brings fuel marketing businesses exciting opportunities for growth and success. As businesses grow, they encounter tough decisions regarding how to best use the technology available. Within the c-store environment, technology needs to provide one key attribute: enable and support the speed of service and customer engagement.

That said, mobile wallets, dispenser technology, reward programs to entice gasoline purchasers to set foot in the actual store for additional purchases, and remote couponing, are all technology trends being implemented across the category.

“National and local retailers understand that shoppers are leveraging multiple screens even when visiting their locations,” Panarese says. “Speedway and Shell have both leveraged social media to feed content that appears at the pump. Shell has continued to evolve their omni-channel experience by tying-in their POS system to mobile and tablets apps, allowing for both gas purchase at the pump as well as in-store including food products.”

Experts advise fuel marketers to keep in mind that social technology will continue to play a critical role in how shoppers interact with retail brands. “Having the ability to respond more effectively with more relevant digital content will be key,” Panarese says. “Monitoring social channels and understanding when shoppers visit or intend to visit c-stores can provide key learning to optimize future content. This approach can also help improve customer service experiences when shoppers visit the stores—reducing perception of wait times and improving satisfaction.”

As shoppers become more familiar and more comfortable with payment apps, marketers will need to find the right balance between rewarding shoppers for their core purchase of gasoline and identifying ways to drive consideration of food/beverage products.

“There will continue to be a challenge between how far retailers stray from core drivers in the category, such as gasoline and foodservice, versus evolving store footprints that include lounges and other amenities meant to entice new shoppers,” Panarese says.

Some industry experts see technology as a double-edged sword—especially for fuel marketers. For instance, Pay at Pump technology is extremely valued by the “on-the-go” consumer (and convenience store operator) but can result in less in-store foot traffic.

But on the other, hand convenience retailers can take advantage of new location-based digital/mobile technologies as added incentives to bring traffic to the store. Furthermore, through these technologies they can promote exclusive products, the increasing range and variety of fresh options, unique services, such as pick up/drop off deliveries including dry cleaning, loyalty rewards, and many more.

“Technology can give convenience retailers a unique opportunity—the ability to really transform their store using technology such as digital communications and media to create a store that has a completely different look/feel through different day parts—a morning café, a fresh lunch stop, an evening dinner solver,” Harris says. “They also need to connect this to the external audience via localized social and digital engagement and solutions.” Experts agree that gas is and will increasingly become a less significant part of the convenience/fuel marketing format. Long term trends, such as fewer miles driven per capita per year as well as the potential increase in electric powered cars, mean that fuel marketers need to provide additional reasons to visit.

“Their locations—easy in/easy out—give them an advantage with the quick trip shopper,” Harris says. “To capitalize, c-store operators will need to continue to move further into local, fresh, unique products and services—in essence a holistic interpretation of the word ‘convenience.’”

&nbsp;

Source: Independent Gasoline Magazine Sept/Oct issue