By Fran Duskiewicz
I€™ll admit up front: This is an old dog/new trick story. While the company I work for, Nice N Easy Grocery Shoppes Inc., in Upstate New York, has always embraced research, like many other retailers, we didn€™t know about formal "shopper" research until recently. We often used the words "shopper" and "consumer" and "customer" interchangeably without realizing that while one person may play all three parts, the roles and influence on our business are completely different.
The "consumer" is a person with a need who makes a purchasing decision. This individual later becomes a "customer" when they actually buy and use the product. Between the consumer and the customer lies the "shopper" €" and it€™s the understanding of this person and how he or she makes critical purchase decisions that€™s often the great unknown for our industry.
Consumer data is readily available, detailing the age, gender and income of people who buy products in our stores, but how do we approach learning more about the shopper and the opportunities that research can present?
A new report from the NACS/Coca-Cola Retailing Research Council (NACS/CCRRC) provides an overview of the shopper research concept, as well as compelling ideas to help convenience retailers capitalize on growth opportunities. "C-Growth: Using Shopper Research to Grow C-Store Sales" turns to shoppers themselves, asking what would motivate them to spend more money in a convenience store.
As the outgoing chairman of the NACS/CCRRC, I oversaw the first phase of this research. And based on my experience as an executive with Nice N Easy, a chain of 85 outlets, I can tell you that the process of learning about this special area of research has revolutionized our company€™s approach to business.
I€™d like to share with you the journey that took me down this road, which has provided unique points of competitive differentiation to better position our company for future success. It€™s a tale of serendipity that ends with valuable lessons for anyone in convenience retail.
I didn€™t have to pack heavy to embark on my company€™s journey into shopper marketing; it was a short trip.
A couple of years ago, a local chamber of commerce asked Nice N Easy to expand our grocery selection in a convenience store located in a suburban community because residents were driving to another town to fulfill their routine shopping needs. We considered tearing down the existing store and constructing a larger new one, but first we wanted to ensure the venture would create a profitable return on our investment.
For answers, we turned to one of the world€™s most respected consumer research companies. We wanted to know what products to put on the store€™s shelves and how to appeal to shoppers we didn€™t yet know. We soon discovered that the renowned firm could tell us a million things about consumers, but not much about shoppers.
About that time I was asked to join the NACS/CCRRC and was chosen as chairman. After discussing many possible topics, an obvious and constant theme emerged: We need to better understand the shopper.
Turns out, a nationally known firm specializing in shopper research is located 15 minutes from our office. In short order, their representatives began to educate our company and in the span of a few months, shopper research emerged from obscurity in my world and presented itself everywhere I turned. I needed no further signs to let me know that I had stumbled upon something game-changing.
The latest NACS/CCRRC study debuted in February and is based on research conducted by TNS Landis, part of a world-renowned insight, information and consultancy group. Building on past studies conducted by the NACS/CCRRC, the updated research is a concise and powerful tool to guide c-store executives into a new era of competitive differentiation.
The report reveals that retailers can set themselves apart from competitors by creating engaging experiences and understanding that contemporary shoppers seek more control during their visits, as well as rewards €" or a little of both. In addition to understanding the framework of products and services, it€™s important to know how today€™s on-the-go individuals spend time in our stores. This kind of thinking adds a new dimension to marketing efforts.
The report also identifies five compelling platforms for retailers to explore and the reasons why people make purchases at convenience stores.
The NACS/CCRRC report details the following opportunities for growth:
- My Time: These shoppers seek stores where they can relax and browse. They don€™t want to feel rushed, but once they€™ve made their selections, they want to check out and depart quickly. Store layout and service are paramount to these shoppers.
- Fresh Value Fast: Want to compete more effectively to satisfy shoppers€™ immediate hunger needs? Although busy, fresh value fast shoppers want to feel as if they are taking care of themselves and are not forced to sacrifice food quality. They desire fresh, made-to-order items, with toppings they personally select.
- Female Friendly: C-stores with an interest in appealing to female shoppers can create an environment that feels comfortable and safe with professional staff who don€™t infringe on personal space. This group of shoppers also is motivated by the reward of having a break in their day €" time to look at magazines or enjoy a cup of coffee. (In this regard, we are competing against coffee shops and drug stores for women€™s time.)
- Family Time: Money is tight for many families these days, yet they still seek affordable destinations. Set up your stores to offer reasonably priced treats the whole family can enjoy; include a clean, safe relaxing atmosphere with seating. It€™s all about creating an attractive value proposition with emotional rewards for parents.
- My Place: C-stores can turn up the heat with one of their primary targets €" blue-collar males €" by creating a place where they feel welcome and can connect with friends. Service, seating and that all-important cup of coffee are primary components that address this shopper€™s needs.
After Nice N Easy saw these opportunities defined, the brave new world of shopper research suddenly made sense to us.
The shorthand lingo we€™re using internally revolves around the three "Fs": Female Friendly, Family Time and Fresh Value Fast, as well as the "My€™s" €" My Time and My Place. We see opportunity in each of these segments, but the three "Fs" seem ideal for our operation. We€™re incorporating one platform into our long-term planning, acting immediately on another and have experienced immense success with the one we already launched.
From our perspective, female shoppers offer tremendous untapped potential, and what we€™ve learned is that we face an uphill battle. At present, our company understands that women would rather go to a drug store than a convenience store for certain items. And, while grocery and foodservice are crucial to our future, gas pumps can be a turn off when women embark on some shopping missions.
After opening a new 7,000-square-foot store, we received insightful feedback from women in the community: "You have such a nice facility; why are you ruining it by putting the gas pumps up front?"
You know what? They have a point. To make future stores more attractive to females, we€™re considering locating our fuel station on the side of the building. Shoppers could enter the store without navigating around the gas island. It€™s an intriguing, novel approach to a complex sales barrier.
The big "aha" for us is the opportunity that exists with the Family Time platform. In recent years we noticed younger families with kids visiting our stores on evenings and weekends. They buy some snacks, sit down and have little get-togethers that don€™t break the bank. These sales didn€™t register with us as a growth opportunity.
After reviewing the NACS/CCRRC study, however, our team realized that we haven€™t done anything specifically to address family needs and bring them to our stores. That€™s changing now. Our solution may be as simple as reorganizing our foodservice menu to offer "family deals" or it might involve targeted marketing through direct mail or social media initiatives on Facebook, Twitter, foursquare or a couponing site.
Several years ago our company launched Easy Street Eatery, a proprietary foodservice concept, offering a wide variety of made-to-order meals. As time passed, we realized we needed to take it up a notch and get into the home meal replacement business. We also knew we needed to hire people to make the program work, so we recruited three chefs, one of whom came from one of the best restaurants in Syracuse.
The chefs have created 12 gourmet home meal replacement options at a $6.99 price point. Lobster lasagna and chicken Florentine are among our menu offerings in addition to more traditional fare. Foodservice personnel in each store are trained to prepare the meals on-premise in a 1,500-square-foot dedicated space that includes seating. The concept has been a huge success and shopper research will fortify our efforts to expand and refine future offerings.
Now let€™s take a step back into the past so I can tell you about the future. The year is 1997: I€™m speaking with an industry consultant about the value of category management. "Do you do category management?" he queried. "Of course we do," I responded. We had categories and we managed them €" ipso facto, category management.
Little did I know we had only encountered the tip of the iceberg. Being involved in defining category management was a transformative process for our company and it completely changed the way we conducted business. What seemed like a simple process was not. It was deeper and wider and, while challenging, more rewarding than we had ever anticipated.
Fast forward to today. Shopper research has the same potential to alter the course of history for convenience retailers. Any company can examine the recommendations from the NACS/CCRRC study and find ways to grow, but the deeper impact is yet to come.
A few years from now we will look back and recall this time as the beginning of a new era €" when we once again reinvented our industry.
Fran Duskiewicz is the senior vice president of Nice N Easy Grocery Shoppes Inc., a chain of 85 New York-based convenience retail outlets, and is outgoing chairman of the NACS/Coca-Cola Retailing Research Council (NACS/CCRRC). Please direct questions to: Bill Bishop, NACS/CCRRC research director, at firstname.lastname@example.org.