THE PLUME

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Retail Evolution

Seven Ways the Convenience Industry is Moving Forward

Convenience stores face a colossal challenge: they have to be all things to all people all of the time.

How they do that today, and how they will continue doing it tomorrow, was the topic of a recent conversation between Joe Sheetz, chairman of the National Association of Convenience Stores (NACS) and Todd Tillemans, president, U.S., The Hershey Company.

“You have to pick and choose because you don’t have a Sam’s Club of space,” says Sheetz, who is also president and CEO of Sheetz, Inc., which owns nearly 600 convenience stores in the Mid-Atlantic region. “You have to be very flexible and agile. You have to constantly be working it—what’s going in, what’s going out.”

The talk, which was moderated by Chris Blasinsky, content communications strategist with NACS, took place inside of Hershey’s Mobile Customer Insights Center (MCIC). The location meshed well with the discussion’s theme, because the MCIC is traveling the country, meeting with convenience store owners and sharing insights to help them grow sales. During the conversation, which touched on the importance of data, innovation, digital technology and more, one message was clear: in order to be all things to all people at all times, you must constantly be evolving and moving forward. Here’s how the 90-year-old industry is doing just that.

  1. They’re relying on insights to help boost sales. Thanks to technology, data abounds when it comes to the convenience store channel. That data is published in studies conducted by NACS, it’s shared with convenience stores during meetings with Hershey’s MCIC and it lives within the sales information that individual stores collect, themselves. When analyzed and applied, this information can help store owners anticipate shoppers’ expectations and better understand the way they consume food, says Tillemans. “Snacking has really grown,” he says. “If you go back 30 years ago, you were told, ‘eat your three meals a day,’ and now people are on the go, they’re moving, there’s a need for snacking and there’s, on average, 25 snacks per week.” There’s no one-size-fits-all for those snack cravings, which could be for candy, chocolate, sweet and salty and better-for-you snacks. By understanding what people want and when they want it, convenience stores can become the go-to snack stop for busy consumers.
  2. They’re stocking the shelves with innovative items that keep customers coming back. Sheetz says that shoppers are constantly looking for something new and exciting when it comes to confection, and as the owner of many convenience stores, it’s up to him to give it to them. “We are the place of choice for somebody seeking convenience,” he says. “But we’re also one of the last bastions, at this point, of successful bricks and mortar, so we have to stay relevant.” He continually works with partners, such as Hershey, to identify new, fun, exciting and different offerings beyond the core to fill his shelves and get shoppers to return.
  3. They’re pairing and positioning shoppers’ favorites where it counts. On average, shoppers spend less than three minutes inside a convenience store. That means that the classic items they love need to be easy to locate and, of course, single-pack sized and ready-to-eat. Tillemans says that data shows that certain items pair well together, and by displaying them side-by-side it can make an impact on sales. “We know that fountain drinks and Reese’s have a real overlap, and when you do that well in promotional periods there’s over 100 percent sales lift. And Kit Kat and coffee, we’ve measured a 55 percent uptick,” says Tillemans. “So the more you can find the natural pairings that consumers already want and make them available and visible, it grows traffic.”  
  4. They’ve started offering seasonal items—and they’re doing it early. A few years ago, seasonal items were things that could be found on the shelves of larger retailers. Now, they’re a growing part of convenience store business, too. Sheetz says that his stores start displaying Reese’s Peanut Butter Eggs as soon as they come in, which is months before Easter. When he first started to do that, he wondered if it was too early. Then, he heard people saying they’d been waiting for them all year long. “I don’t know that there is a ‘too early,’” he says. He adds that he believes seasonal items will present a big opportunity for the convenience store-channel in coming years.
  5. They’re working with partners to get shoppers what they want. There was a time when larger retailers dictated pack size and convenience stores didn’t have a lot of choice when it came to inventory and size options. Today, with more access to data and stronger business relationships, that’s changed, says Tillemans. Suppliers understand that single-serving sizes are a must, so that customers can indulge immediately. “It’s gone from ‘We’ll give you what we have,’ to ‘Let’s co-create together. Let’s invest in insights and bringing the right product for your shopper.’” says Tillemans. “It’s come a long way.”
  6. They’re beginning to think digital. For nearly 20 years, Sheetz convenience stores have offered touchscreen ordering, and today, customers can even place a food order online and pick it up. While larger retailers have been confronting the digital conundrum for a few years, convenience stores are still on the cusp of the challenge. Tillemans is excited to see what the next chapter might bring in integrating the digital experience. One example he shared revolved around Reese’s. Research shows that cravings for Reese’s peak at 3 p.m. and then another hits around 10 p.m. Knowing that, a shopper could get a message on their phone at that time that asks if they want a Reese’s and directs them to the nearest Sheetz. “Digital gives more touch points,” says Tillemans. “You can see it on the digital shelf and it can spur the same level of engagement. The digital shelf is still a shelf, a basket and a checkout. it’s just a different way to do it.”
  7. They’re optimistic. Sheetz is no stranger to the doom-and-gloom tenor that often accompanies talk of retail. But when it comes to convenience stores, he’s not concerned. “Sometimes I think we fall into this trap of thinking everyone’s sitting on their couch watching Netflix and playing Fortnite and ordering everything to be delivered,” he says. And while times have indeed changed, he says he looks out on the roads and there’s still traffic. He looks out at the pumps and people still need gas. He looks around his stores and people are still buying snacks.

    His goal, and the goal of many c-store owners like him, is to be creative, be relevant and do what they do best: be convenient. “It’s our job to capture them on their way to, on their way home and become a crucial part of their life,” he says. “Almost like a habit.”
Kate Silver
Contributor

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