Hunting the Hypermart Customer

Published in CSP Daily News

Value, existing strengths and the c-store key to recapturing lost gas dollars

NEW YORK -- Despite the feeling of futility many retailers suffer when thinking about going head-to-head with a hypermart, all is not lost, said David Portalatin, manager of gasoline and convenience store services for NPD Group Inc., Houston.

During a recent CSPNetwork cyberconference on winning back the big-box gasoline purchaser, Portalatin argued that in fact many of those same customers attracted to the allure of cheaper fuel at the local hypermart are also regular customers of the c-store.

To view an on-demand rebroadcast [image-nocss] of this cyberconference ($49), click here.

More than half of those consumers who have bought gas from a big-box store have been in a c-store within the last 30 days, in the same 30-day period that they made their gas purchase, said Portalatin. Half of those people we think we have lost, we haven't lost at all. They're still your customer if you're a c-store operator and they're still in your store. You still have a face-to-face interaction with those people on probably a weekly basis.

So how can retailers make the most out of that c-store purchasing occasion? Portalatin offered three key strategies:

Be competitive. Although 94% of big-box gasoline purchasers said they chose that outlet because of price, convenience retailers don't necessarily have to play a matching game with the neighborhood big-box. For this consumer, it's always about price and value, and promotions related to price, Portalatin said. He advised retailers to take a second look at a loyalty program that rewards a certain segment of customers with a fuel discount. Equalize the price differential because you're delivering more value, in either the service, product offering or perceived quality, he said. Play up your strengths. Whether it is brand power, product performance or even conveniences such as pay at the pump, retailers should highlight what they consider their strongest point of differentiation to attract the big-box consumer. For the majority of consumers, location will always be the No. 1 reason they choose to shop with you, said Portalatin. Continue to invest in those good sites and weed out those that under-perform. Leverage the c-store. In the battle of the big box vs. the little box, the c-store presents a big opportunity for those retailers to win over the hypermart gasoline consumer. NPD research has found that big-box gasoline customers tend to favor certain in-store categories, including fountain and packaged beverage. Create a standout offering in those areas, Portalatin advised, or highlight the c-store's superiority at convenience, personalized service or providing a one-stop shop.

Over half of big-box customers are already in your store, he reiterated. You already see them day in and day out at least once a week, and you have an excellent opportunity to build loyalty with that consumer.