The World's Unsexiest Business
adding a little sizzle to the convenience store industry
quora question: "what are the marketing activities/programs/campaign[s] to push sales at convenience stores?"
Understand your market and who you’re trying to sell or are really great at currently selling:
Then consider something more data driven like product mix/preference. Just because you’re operating a business in a higher income neighborhood doesn’t mean the average sales transaction ticket will be higher. While the correlation between income and average ticket may be higher, it becomes confounded by a widely supported argument that higher income consumers are more highly educated and therefore more aware of the absolute versus relative valuation of goods. I’ve written a blog post about this particular phenomenon and how it applies to a convenience store.
As for something tangible that you can take away from this response:
1. Less is more. Don’t plaster windows with promotional material that your suppliers/distributors have coaxed you into displaying. Well, unless they paid you to do so. But if you’re trying to hide a dirty store interior, stick with 1 (at most) for every window. And even then be highly discretionary about the consumer base that particular product or brand attracts. Posting a gigantic Marlboro cigarette promotion on your largest window signals to me you’ve got plenty of energy drinks and sugary snacks. And then I consider how you might have succumbed to engaging in razor thin margin warfare.
2. Don’t attempt to change the world by reinventing the wheel. If you’re a health food junkie and are trying to get your customers to eat better then promote it in the form of a campaign. Not by changing your product mix. The average US based convenience store has so clumsily navigated the ‘fresh’ category that grocery retailers such as Whole Foods have been able to sell the same product in their stores at twice the price for half the convenience. Conversely, if you offer nothing that would generally be considered healthy or even fresh but the demographic you’re trying to capture only visits your store on their ‘cheat’ day, start monitoring the product attribution movement of a few test products. Specifically, have products such as Quest protein and KIND bars or even Muscle Milk seen an uptick in sales volume over the past 90 days? I’d consider them marquee products for consideration of a product mix shift.
3. Hire a category manager on a contract basis. Full time employment will encourage Parkinson’s law to kick into play: work expands so as to fill the time available for its completion. And if they’re really great, you’ll be able to justify their full time pay by the increase in gross margins and/or top line.
4. Either go all in with social media or abstain altogether. Nothing screams ‘unfollow’ more than a half attempt at after thought posts— the makings of inside joke hashtags and blurry images. Consider scanning a couple different platforms to find someone whose posts you like and has a decent following. Then reach out to said individual to run your social media program. It’s a lot cheaper than you might think.
Softening things up a bit -- would you consider adding FOMO to that list? And in case you weren't familiar with the millennial coined acronym, that's the Fear Of Missing Out. Unlike its more existential rooted relative YOLO (You Only Live Once), FOMO's focus is usually directed more to an event rather than the entire spectrum of life.
That's not to say that they haven't been used interchangeably.
The calm before the storm?
Before consumer euphoria starts to set it, just remember that volatility always returns to its natural 'mean' level.
While prices at the pump aren't anywhere near absolute historic lows (sub $2 nearly 10 years ago), they are sitting in relatively cheaper territory (slightly shy of $3) but still above the average price (~$2.80) around this time last year.
Addressing the tracking error between crude and RBOB (the 'crack' spread), this particular spread has seen an increased ebb and flow. Currently, we're sitting somewhere in the middle after having seen a dramatic spike a couple of days prior to the new year.
Many of my blog posts going forward will refer to the convergence / divergence of relative and absolute prices inside and outside the store.