The Future of C-Store Merchandising At the Point of Sale
Good things come in small packages. The C-Store channel is growing fast and now represents 40 percent of the retail growth opportunity in the U.S. market. As C-Store revenues topped nearly $150 billion last year, CPG companies saw their C-Store sales grow at twice the rate of all other stores in the market. This is good news for C-Store retailers and brands – more opportunity means more upside. But it isn’t all smooth sailing inside the retail hub of tobacco, salty snacks and soft drinks. Small store size remains a persistent merchandising challenge. The average size of a C-Store is just 2,963 square feet – and while modular displays across the store are easy to set up and move around, they take up a lot of space. The checkout area is even more competitive for consumer attention because many C-Store customers don’t venture past the register. The typical C-Store shopping experience is a quick trip, with customers looking for new value offerings on each visit.
C-Store growth is attributed in part to the large number of new products that hit C-Store shelves. On average Consumer Package Goods (CPG) companies introduce 1,900 new products on a yearly basis. Think about that. What new tools did you leverage to support those new products? Did you deploy new merchandising strategies? How did you bring awareness to these new products and get your customers excited about them? Whatever your experience, the overall results were underwhelming. Of those 1,900 products, only ~26% of them reached sales of $10MM nationally. New merchandising tactics are a must.
DIGITAL DOES MORE WITH LESS
So, how do you maximize impact with minimal space? Think digital. Digital merchandising is flexible, targeted and measureable. It can also help brands and retailers capture shopper insights real time via interactive surveys and extend the in-store customer experience to mobile. Platform features vary, but one thing is for sure: digital merchandising communicates more and takes up less space than traditional merchandising tactics. That’s a win for C-Stores.
PRN, a leader in digital media at retail, is putting digital innovation at C-Stores to the test. PRN’s LIFT Network is an interactive digital upsell platform that’s deployed at checkout in more than 1,700 C-Store locations across the country. The touchscreen technology uses live transaction data to personalize the customer experience, increase sales, promote products and amplify brands. In short, LIFT enables C-Store retailers to sell more items to every shopper.
Additionally, the LIFT Network is helping C-Store retailers build their loyalty programs – and that’s a big deal in the convenience space. C-Stores are all about the coveted return trip customer. Sixty-four percent of C-Store customers visit a retail location weekly – and they expect new value props to greet them on their frequent visits. Consumers reward retailers who surpass their expectations. LIFT’s ability to integrate with existing host providers and track customer loyalty can be a vital tool in this process.
LIFT THE BOTTOM LINE
LIFT screens are front and center on the checkout counter at the point of purchase. A consumer-facing screen displays attract messaging, promotions and relevant offers based on seamless POS integration – while a cashier-facing screen guides associates through each transaction with simple dialogue prompts. A metrics-based incentive program optimizes both associate participation and performance.
THE REAL DEAL
It’s working. This data-driven technology measures ROI by tracking key metrics including conversion rate, incremental product sales and category share lift – down to the UPC level. In fact, results demonstrate an ability to grow sales by 9% to 65%. Consider these case studies:
Grandma’s Cookies brand saw a 41% sales lift during the period when media was present versus the pre-campaign period when no media was present. The brand’s competitors’ shares dropped during the campaign.
- 44% sales increase vs. control sites
- 17,300 incremental units purchased
- 10, 101 from free offer (12.4% conversion)
- 7, 199 at retailer price (.54% conversion)
Powerade brand saw a 41.1% conversion rate on a “Buy 1 Get 1” offer at a national retailer via the LIFT Network. The national conversion rate is 2.1%.
- Over 57,000 units upsold through the LIFT Network in less than 4 weeks
- 16% of total PowerAde volume sold via the LIFT Network
Doritos concluded a 4-week campaign in over 2,000 locations that resulted in a 13% sales increase for Doritos as compared to the pre-campaign period.
- In addition to walk-up and traditional upsell activation, Doritos leveraged digital coupon values of $0.50 and $0.75 to drive the consumer trial
- Doritos sold ~28,000 incremental units via the LIFT Network throughout the campaign
A DIGITAL PATH TO PURCHASE
Now is the time for C-Store merchandisers to think outside the small format box – because the 21st century consumer is a tough customer. We expect the in-store experience to simulate the nimble world of clicks, taps and swipes. We want communication platforms to speak to each of us individually with personalized messages – not to all of us with generic ones. We want tablets on the shelf to seamlessly onramp us to curated mobile and online experiences. We want relevant product information, redeemable offers and reviews at our fingertips. Technology has raised consumer expectations – and retailers must rise to the challenge. Success will depend on who stays out in front.
1. IRi and Nielsen, 2016
2. IRi, 2016
3. Association for Convenience & Fuel Retailing, 2016
4. IRi, 2016
5. IRi, 2016
6. Tectronic, 2016
About the Author
Kevin Carbone is CEO of PRN and a member of the Scala Board of Directors. A former CEO and founder of 6Connex, a virtual collaboration company, Kevin is experienced in retail and enterprise technology and has delivered both software-as-a-service and professional services solutions to Fortune 500 companies, including Walmart, Cisco, HP, Oracle and Visa. Kevin holds an M.B.A. from the Harvard Business School and a B.A. from the University of California, Berkeley, where he graduated Phi Beta Kappa.
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