`24/7 Lives` - Convenience Store News

‘24/7 Lives’
Forum offers strategies
to appeal to wiser,
high-tech consumers
By Angel Abcede & Linda Abu-Shalback Zid
[email protected] & [email protected]
“Transform your
store into something
more ritualistic.”
Picture Grandma texting: Old school meets new world.
Retailers, welcome to the new reality. About 70 attendees at the CSP 2009 Consumer Insights Forum held last
month in the Phoenix area explored various trends, from
consumers’ recessionary reaction to the emergence of
health-conscious shopping, reflecting a sense that tomorrow’s patterns will be unlike anything retailers have seen
in the past.
As an example, the combination of 18- to 29-year-olds
living independently and 30- to 39-year-olds together make
up what one senior marketing director calls GenNOW, alluding to their immediate and nontraditional buying power.
Though in different life stages, the two groups strike
similar chords in attitude and behavior, and by 2015 will
number 110 million—42% of the U.S. population.
“They live and eat differently than any other group that
has come before them,” said Eric Johnson, the marketing
guru at Kraft Foods who coined the phrase GenNOW. “They
live 24/7 lives.”
Retailers on the forum’s panels told attendees they’re confronting the new consumer head on. John Schaninger, vice
president of sales and merchandising for Whitehouse Station, N.J.-based Quick Chek, spoke of refining the 121-store
chain’s marketing strategy, pushing value to local customers
earning a $50,000 average household income.
Quick Chek dropped pricing on 6-inch sub sandwiches
to $2.99, and with help from vendors was able to do so without compromising recipes or quality. In the first week, company officials saw a 60% increase in units and were so
impressed they’ve embraced the value offer. “Moving forward, we’re the $2.99 sub guys,” Schaninger said.
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Private ‘Branding’
Photos by Scott Mitchell
Addressing the boom of private brands, Al Meyers, senior vice president of business development
for TNS Retail Forward, Columbus, Ohio, said everyone from huge retailers such Wal-Mart and
c-store giant 7-Eleven to smaller, regional players have embraced the concept.
Companies are wisely choosing not to focus on private “label,” which had the stigma of being
a second-rate product, but instead fashioning private “brands.” He said companies are investing
in these new brands, improving taste profiles and giving personality to their identities.
According to Ajay Parikh (right), proprietary-brand development manager for La Palma, Calif.-based
BP ampm, other elements must also be in place, including the proper commitment, supply chain
logistics, margin and what he called “customer permission” to go with a private brand.
“It’s not just a label slapped onto a product with cheap ingredients,” Meyers said. “It’s a brand.”
Reality Marketing
For North Salt Lake, Utah-based Maverik, adventure’s first stop is its “Kick Start TV” reality show,
which launched in May 2008 [CSP—Jan. ’09, p. 38].
Brad Call (left), executive vice president of adventure culture and general counsel for the 200-store
chain, said the idea for the show developed from the propensity for DVR users to fast-forward through
commercials. He says the idea of “Kick Start” is “taking the average Joe or Josette” and doing some
fun, adventurous things with Maverik and its adventure partners. Each episode includes a trip to
Maverik, highlighting products from vendors that support the program. The show airs on NBC affiliates
in Western states. “Every week, we’ve got about 16,000 people watching our show,” Call said.
Maverik challenged employees to create ads for the highlighted products, with plans for the
winning ad, as voted by the employees, to be included in “Kick Start.” “It’s important in any media
campaign to have the active participation and involvement of your own people,” Call said. “And
they’ve got to feel it, be excited, have fun with it. It creates the energy within your corporation. So
that was fun getting our people involved.”
FACEBOOK-ING FACTS
Offering value deals isn’t the only way
Quick Chek is growing fans. Indeed,
the retailer, renowned for its premier
coffee program and in-store imagination, is winning virtual fans with its
new Facebook page.
“We’re actually talking to our most
loyal fans,” Schaninger said, “because
why would you go on Quick Chek’s
Facebook [page] unless you’re a loyal
fan?” The chain’s Facebook promotions
include freebies when the site reaches
a “friend quota” goal, fan of the month
and couponing. The fan base is growing at a rate of about 10% a week.
Surprisingly, Schaninger said, “one
issue that’s really great is that we can’t
control fan content and comments.”
Although that means everyone can see
comments—good and bad—Schaninger
appreciates that his responses also are seen
by all. One interaction, he cited, included
a posting from a customer who was
unhappy about the discontinuation of a
coffee flavor. Soon other people were
posting that they combine two flavors to
achieve a desired flavor. From there, other
“recipes” ensued from this virtual
groundswell.
Quick Chek has run two other
online offerings that have captivated
Facebookers. One, referred to as “Sub
Culture”(www.qcsubculture.com),
allows users to pick a sub, dress it up,
give it a personality and tell it what to
say. Another was a “Name It, Claim It”
contest directing kids to come up with
a name for the company’s frozen slushie
drink. It attracted 1,800 names, which
Quick Chek narrowed to 25, and then
21 following a trademark search. Instead
of spending big money on a focus
group, Schaninger went to his son’s
high-school junior marketing class, who
brought it down to three; he hopes to
have a name picked before year’s end.
Quick Chek is on the right track.
Internet and mobile activity as it ties to
shopping are becoming a fact of life,
said Dorothy Allan, senior vice president of retail strategy for TracyLocke,
a Dallas-based Web marketing consultancy. “It’s like a rocket coming at us,”
she said, citing that mobile shopping
may even surpass the Internet by 2011.
In describing the difference between
mobile (or cell-phone) vs. Internet shoppers, Allan said it’s the difference between
a hunter and a gatherer. A mobile
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“We may be in a
recession, but we’re
not going to partake
in it. The key point is
to make sure you
play the game.”
BILL RIPLEY
Stop-N-Go
“My kids, they don’t
watch commercials.
It’s all technical. So
how do you get to
them?”
JON MANGUM
Stinker Stores
“[It’s all about] ease
of shopping and how
you initially present a
product.”
KRIS KINGSBURY
Robinson Oil Corp.
“[Mobile shopping]
is coming at us like a
rocket.”
DOROTHY ALLAN
TracyLocke
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“hunter” is in more of a directed, “stealth”
mode. He or she is a “I know what I
want” shopper who’s interested in handling the transaction in a couple of clicks.
The Internet shopper is more of a wanderer, taking time to float through Web
sites and gather what is of interest.
In describing numerous characteristics of online-shopping behavior,
Allan said life stages play a role, with
everyone from baby boomers to socalled “millennials” having different
priorities and behaviors while cruising
the Internet. According to Allan, retailers must appreciate the differences
among age groups, gender and mobile
vs. Internet shoppers to find that “sweet
spot” for their businesses.
ECONOMIC RIPPLES
The dual trends of recession spending
and online communities are definitely
reshaping shopper spending habits
and changing the game for c-store
operators, according to Al Meyers, senior vice president of business development for TNS Retail Forward,
Columbus, Ohio. To start, numbers
suggest shoppers are gradually easing
up on their penny-pinching ways, he
said. However, after the recession, consumers will continue to make “mindful” choices, opting to remain frugal
in ways they find meaningful.
In terms of economic trends and the
effect the recession has had on shoppers, Meyers said last fall’s credit shock,
Wall Street collapse and housing implosion created a “perfect storm” that
demoralized shopper psyches. It caused
consumers to zip up their wallets for
everything but vital needs.
Since then, the stabilization of the
housing market and other factors are
“starting to unlock” that freeze and, at
Quick Chek List
Promotional and marketing efforts by Whitehouse Station, N.J.-based Quick Chek are
numerous and imaginative. John Schaninger, vice president of sales and merchandising
for the 121-store chain, shared a few ideas:
䊳 Free iced coffee. The company gave away free iced coffee at a recent jazz festival. He said,
“We don’t believe in sampling, because sampling means it’s [only a small size]. We believe in giving you a free full size, because that’s how you drive loyalty by trying it once.”
䊳 Coffee with the mayor. In one store, the company did a “morning coffee with the mayor”
for three months. The mayor loved it, and it’s starting again in January; other mayors also have
shown interest.
䊳 Big balloons. An annual Quick Chek New Jersey Festival of Ballooning attracts “150,000 of
our closest friends,” according to Schaninger, and “it’s all about Quick Chek,” with the company’s
products prominently displayed throughout. The event is run by volunteers, so no labor costs are
involved in getting the branding out.
䊳 “Skin-vertising.” Last July, if you went into a Quick Chek in the morning, you were literally
branded with a “Claim Your Steak” stamp on your hand. The “skin-vertising” meant you could
then come back later in the day and get a steak sub. “So it did a couple of things. One is it got you
to try my sub, which is pretty good,” he said. “But the second is, you’re walking around all day
with my brand on you.” In May, the company did it again with a “Sub Stimulus” plan.
䊳 More free coffee. The company’s “Joe to the World” promotion gave away 84,412 cups of
coffee last year. “We drove traffic, we drove breakfast and we made money doing it, because
nobody walks out with [just] a cup of coffee; everybody buys something else.”
least for several demographics, including Gen Xers, a release of pent-up
demand is expected.
The key will be fixing the jobless issue,
Meyers said; as a result, categories such as
apparel will continue to see problems. But
TNS Retail Forward analysts are looking
at 2010 as the start of the recovery, with
growth rates in 2013 predicted to be more
of what the nation is accustomed to.
According to Meyers, boomers are
likely to continue to be a force in the
recovery; they have to keep working to
recoup wealth lost when stocks plummeted. But they won’t be spending as
much because they have fewer needs.
Meyers advised retooling for the next
generations that have careers to launch,
children to raise and homes to tend to.
RETOOLING FOR GENNOW
The GenNOW demographics define
their lives in a high-tech, digital age, and
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they’re abandoning the three-squaremeals paradigm in favor of blurred eating occasions, said Johnson of Kraft.
As a demographic, these consumers
are technologically savvy, have a high
“food I.Q.” and are health-focused, Johnson said. But they’re not elitists or intellectuals, nor are they particularly wealthy.
And while they’re health-conscious,
they’re not extremists.
Many GenNOW consumers are settled singles or newly coupled. They may
be new parents setting up their growing
households. Generally, they are very
engaged in life, but they seek simplicity
and balance. That yearning for simplicity can translate into the retail environment, with simple, clean store designs
and brand messages that are transparent and compelling, Johnson said.
In terms of food, fad diets, he said,
are out with this consumer group.
Healthy eating—portion control and
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nutrient-dense foods—is becoming a
lifestyle. “They also want real food,” he
said. “Nothing tainted or processed, and
[products] that celebrate cultural aspects.
… In many ways they’re saying, ‘I want
to eat like my grandparents did.’ ”
Typically, the GenNOW consumer
shops over a wide range of channels,
going to five or six different places vs.
simply going to the grocery store. In
addition, they shop in different channels
for specific purposes. For instance, a GenNOW consumer may go to a Trader
Joe’s only for wine and cheese. To capture those shoppers, Johnson advised
retailers to “stand for something.”
In addition, midday eating presents
a strong opportunity. Options are limited in general, he said, so c-stores are
in a strong position, being able to offer
both convenience and portability. Items
on a dollar menu are quickly becoming midday snacks. Along these lines,
products that can “give back time” or
make the task of eating easier have
strong potential for success.
In the end, Johnson said retailing is
experiential and retailers not only have
to have the right products, but they’ve
also got to tell a story and define for
consumers what they stand for.
DESIGNING ANSWERS
Offering further analysis of today’s consumer, Kim Zenchak, director of customer and shopper insights for Cadbury
North America, Parsippany, N.J., shared
the results of a study and offered possible solutions for common pitfalls.
One finding stemmed from the
physical aspects of store layouts and
often found them constricting and carrying too many products amid a “sea
of color,” said Zenchak, referring to
research done by Cadbury and design
FORUM ATTENDEES
Healthy Figures
Focusing on healthy-eating trends, Michelle Barry, senior vice
president of The Hartman Group, Bellevue, Wash., cited trends
derived from the company’s recent research:
70%
of respondents use diet to address health issues
such as mood and cognitive abilities. These respondents are …
3x
more likely to want functional foods and beverages to
help with issues such as bone health or to strengthen their
immune systems. In addition, this group typically has …
6
meals daily, “grazing” throughout.
Star ingredients: vitamins, minerals, protein, fiber, whole
grain, omega-3, folic acids and antioxidants
Sore-thumb ingredients: cholesterol, trans-fat, animal fat,
butter, salt and corn syrup
firm Shook Kelley, which has offices in Charlotte, N.C.,
Chicago and Los Angeles. “You walk in and you don’t know
where to look.”
She said that retailers should create a space that is intuitive “for both the body to navigate to and for the mind to
visually engage with. Make it comfortable.” For signage, she
suggested, “Make it simple, make it clean, make it logical.”
Psychological insights from the study focused on transitioning shoppers into the mindset of shopping. She pointed
out that consumers generally don’t perceive the c-store as a
destination, but rather as a stop along the way from point
A to point B as they continue on in perpetual motion. “If
we don’t get them to stop, they will never buy more,” she
said. Work from the outside in, making it simple, engaging
and less utilitarian, she suggested.
Retailers should also manage, steer and shape what their
stores mean to their customers. “Transform your store into
something more ritualistic,” she said. “Rituals are really an
opportunity here, because we all have them.”
Another point to consider is what people come to a
retailer’s c-stores for, and editing product selection based on
that knowledge. “This sounds like an easy one, but I see it all
the time,” Zenchak said. “Suggest product combinations that
make sense. You will drive larger baskets.”
Retailers should also try to leverage shopper habits, especially with new competition coming from other channels.
“You have to take back what you own,” Zenchak said. “And
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you have to make it different and better.”
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Participants in CSP’s 2009 Consumer Insights Forum,
held Nov. 4-5 in Chandler, Ariz.:
RETAILERS
Heather Heller, Dave Wilkins Alimentation Couche-Tard Inc. (Circle K)
Mike Adams, Ajay Parikh BP ampm
Cynthia Badish, Natalie Nader BP West Coast Products
Robert Mahlstede Catalina Mart
Doug Dorfman Cenex (CHS)
Larry Brueggemier, Jeannine Petersen Circle K Stores, Arizona Region
Ryan Turnock Danny’s Family Cos.
Bruce Earhart, Mike Triantafellou Handee Marts Inc.
William Churchill Kwik Trip Inc.
Russell Drury Loaf ‘N Jug, Kroger
Brad Call Maverik
Khawaja Jamal, Nasir Cheema NSR Petro Services
Charles Newman Prima Marketing LLC
John Schaninger Quick Chek
Mark Oatman, Chris Passarell RaceTrac Petroleum Inc.
Kris Kingsbury Robinson Oil Corp.
Steven Jones Spartan Fuels
Jon Mangum Stinker Stores
Bill Ripley Stop-N-Go
Lawrence Jasinski Tesoro Marketing Co.
Megan Stark Top Star Express
Mike Polo Western Refining Retail
SUPPLIERS
Mark Frisch Abbott Nutrition
Steve Anderson, Casey Kerkmann Blue Bunny
Katy Dutt, Vickie Grimes Boyd Coffee Co.
Stephen Ullrich, Kim Zenchak Cadbury North America
Jennifer Kaul, Michael Utke Dr Pepper Snapple Group
Raymond Beadnell, Martha Laka Ferrero USA Inc.
Mary Sauers Jack Link’s Beef Jerky
Vincent Licari, Mike Shields Johnson & Johnson Sales
Randall Froeschle, Eric Johnson, David Kuhn Kraft Foods
Eddie Perez, Danica Stanek Mars Snackfood U.S.
Lance Smith McLane Co.
Rick Fiamelli, Jerry Morrow Mother Parkers Tea and Coffee
Rob Ditzhazy, Joe Wiggetman Nestlé Waters North America
Elizabeth Journell The NPD Group
Sonja Mathews PepsiCo
Bob Presley Ruiz Foods
Jennie Jones S&D Coffee
Kristin Oehlke, Lucia Crater U.S. Nutrition Inc.
Amy Bowden, Jeff Vorst WhiteWave Foods