If you attended this year’s Convenience Retailing University (CRU) in Glendale, AZ, then you probably left with much to think about. From the education sessions to private conversations, it seems that everyone was focused on the industry’s most pressing issues.
I want to take a look at three that stood out.
1. Understanding Your Customers is More Important Than Ever
Convenience stores are the original hyperlocal retailers. We’re an industry that understands the importance of knowing our customers.
But today’s retailers have new tools at their disposal, and it’s more than just demographics and surveys. The best predictor of consumer behavior is exactly that: behavior. As CSP and Technomic’s Jackson Lewis mentioned during a Key Category Forum on customer engagement, even Starbucks relies on purchase history to make recommendations within its loyalty app.
This is also at the forefront of our minds here at GasBuddy. As a provider of location data, we’re able to provide a clear picture of the customer journey to and from retailers. Who else are your loyal customers loyal to? What about those who fill up and drive away? Are they going to Starbucks instead of coming inside your stores? How’s your coffee and breakfast program?
That’s why as we progress through 2018, we’re excited to continually improve our product offering and help retailers to further understand their customers’ behaviors. It’s simply necessary in today’s competitive environment.
2. “The Times, They Are A Changin’”
Everyone wants to talk about Amazon Go, and it’s easy to see why. Not only has Amazon displayed both the willingness and ability to disrupt a diverse range of industries, but the checkout process has remained static for decades. New payment options exist and the store environment has evolved significantly, but we still stand in line and wait for someone to let us leave.
Amazon sidesteps this issue by literally enabling “grab-and-go” behavior. Walk inside, find what you want, and step back out. A system of cameras and pressure-sensitive shelving will ensure you’re charged for whatever you take. In the near future, this technology may prove scalable as others attempt to replicate it.
Will Amazon Go disrupt the more than 154,00 convenience retailers in the United States? It’s doubtful. But it does highlight the need to differentiate your brand. Whether it’s Amazon Go, food delivery services, or mobile apps like GoPuff, many companies are now competing to own the concept of “convenient”. Retailers who fail to differentiate their product selection and customer experience may face significant challenges in the near future.
3. “We need to understand there’s a [negative] stigma for our industry that we need to overcome.” – Cliff Albert
Convenience retailing has a perception problem, as SEDA North America’s Cliff Albert pointed out in his presentation at CRU.
This was highlighted in the results of a recent survey we conducted at GasBuddy. Those of us in the convenience retailing industry understand that the foodservice offer at many stores is at least on-par with quick-service restaurants, but consumer perceptions lag behind. When asked how they compare, 63 percent responded that QSRs have higher-quality food than convenience retailers.
That’s why quality at every step of the customer journey is essential. Foodservice investments can be minimized by something as simple as dirty restrooms or a messy store environment—therefore decreasing the likelihood that consumers view a retailer as a destination. As we found in GasBuddy’s Q3 2017 Foot Traffic Report, stores with above-average restroom ratings on the app saw a 33% increase in foot traffic over those with below average ratings.
Perceptions are also driven by what customers say and share online. While the hotel and restaurant industries fully understand the connection between online feedback and brand reputation, convenience retailing has been slower to catch on. But think about it. Would you stay at a hotel with consistently negative reviews when other options are nearby? Of course not. We’ve been conditioned to respond to ratings and reviews, and they influence our behavior. BrightLocal found that 85% of consumers trust online reviews as much as personal recommendations. Similarly, 69% of GasBuddy users said in a recent survey that they wouldn’t visit a store with less than 3 out of 5 stars on the app. As convenience retailers look for a competitive edge in 2018 and beyond, online reputation management should be a key component of their strategy.