Convenience Stores: A $140 Billion Opportunity
Multicultural consumers are changing the retail landscape and the way brands approach shopper marketing. Convenience store marketing, however, is often neglected and poorly understood, especially across multicultural segments. But why? According to Nielsen, convenience-store sales represent 17% of total retail sales, and reached $140 billion in 2016, up from $126 billion in 2012. This trend, combined with the rising purchasing power of multicultural consumers, reveals a big need for multicultural insights within the convenience-store channel.
To explore this opportunity, we launched a survey to understand the convenience store trip and the shopper mindset across the Total Market. We sampled Hispanic, African-American, Asian, and non-Hispanic white consumers to compare convenience store drivers, shopping attitudes, and in-store behaviors. We uncovered fascinating insights between ethnicities, and uncover new ways for brands to tweak their strategies to capitalize on opportunities.
Where do Convenience Stores Fit in the Consumer Marketplace?
- Although consumers don’t spend a lot on each trip, they frequent convenience stores often, with a majority shopping there multiple times a month. Asian shoppers are the exception and visit stores less frequently than other ethnicities.
- Multicultural consumers are more likely to believe convenience stores are less expensive than grocery stores. But ultimately, most consumers expect, and are willing to pay a premium, for the convenience these stores provide.
What does a convenience store trip look like?
There are two types of convenience-store trips: impulse and planned. Impulse trips are prompted by individual cravings and are more likely to happen in the evening. In contrast, planned trips are more social, especially for Hispanics who often bring their families.
Purchases depend on the type of trip. Impulse trips lend themselves to craving-type products, like coffee, beer, and even lottery tickets.
Planned trips lead to more traditional grocery staples (e.g., bread, milk), especially for bicultural and unacculturated Hispanics.
What’s the Mindset of the Consumer as they Shop?
Shoppers are often in a rush and go into these stores knowing what they’ll buy. However, they’re highly influenceable and open to additional purchases. Multicultural consumers are especially likely to make last-minute purchases at the register.
Despite being high-frequency shoppers, loyalty and reward programs are not very common in the convenience-store setting. White (33%) and African-American (26%) consumers are the most likely to have used a loyalty/reward program, but overall numbers are low.
So What Should Brands do Differently?
- They’re called convenience stores for a reason. Convenient locations and flexible hours are the primary drivers to shop at these stores, and consumers are willing to pay more for the convenience factor. Take your store to the next level by promoting additional purchase drivers like fresh products, clean/organized stores, and modern services (e.g. order kiosks).
- The Hispanic convenience store trip is unique. In many ways, Hispanics treat convenience stores like grocery stores. They’re more likely to buy traditional food staples, prepared foods, and shop with their families. To cater to Hispanic consumers, offer a wide variety of products as well as in-culture and in-language messaging.
- Cash-in on store loyalty. Most consumers go to convenience stores several times a month and are passionate about their favorite stores. But few participate in loyalty or rewards programs. Offer reward programs in tune with consumer preferences (e.g. convenience, relevant products) and clearly communicate the benefits.
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