GLENDALE, Ariz. -- Is the convenience store industry missing out on $21 billion in sales per day?
Priya Baboo says it is and recommends a rethinking of how retailers use signage at the pump and product adjacencies in the stores to make a difference.
Speaking at CSP's Forecourt: A Marketing Vehicle with Unlimited Potential meeting in Glendale, Ariz., on Monday, Baboo noted that customers who purchase gasoline spend nearly twice as long at the pump as they do shopping in the store, opening a sales opportunity that isn't being converted on today.
Priya Baboo"It looks like we're not presenting the right information or promotions at the pump," said Baboo, president of shopper insights for VideoMining Corp., State College, Pa., a consultancy that tracks how consumers travel through c-stores. "The c-store journey begins here. It starts from the forecourt."
But for every 100 customers who purchase gasoline, only 31 make a purchase inside the store--21 of them having paid for gasoline at the pump and 10 of them paying for gasoline inside the store.
"A majority of those who pay [for gasoline] in the store, just leave" without making an additional purchase.
To carry out the statistics, Baboo said an average c-store selling gasoline has 277 fuel customers a day. If only 31% (86 customers) of them make an additional purchase inside the store with an average transaction of $4.82, that leaves a loss of $920 per store per day in potential sales to the other 69%, or about $21 billion per day for the entire industry.
"There's a huge opportunity to influence those people to buy something," she said.
VideoMining's data show fuel consumers spend an average 4 minutes and 26 seconds pumping gasoline and only 2 minutes and 28 seconds shopping inside a c-store, including check out. "You have a lot of potential to influence their decision in the forecourt."
For example, 56% of fuel customers look at the pump while at the fuel island. Baboo suggests retailers consider digital signage to better influence these customers. Even if they only pay attention to a few seconds of the digital message, that should be enough convert a few shoppers into buyers.
"You cannot count on customer engagement for a long time," she said. "It should be 'glance media'," or a message that can be fully understood in just a few seconds.
Similarly, retailers should study what products complement each other--such as a soda and a bag of chips--and consider appropriate merchandising adjacencies to drive more cross purchases.
"Every trip tells a story, but if we look at every trip, we can get a better idea of what is happening at every daypart in every area of the store," she said. "We can see: This is what people do, and we can capitalize on that to sell more products."
CSP's Forecourt: A Marketing Vehicle with Unlimited Potential meeting gives attendees of CSP's Convenience Retailing University (CRU) conference an extra opportunity to learn, share and network. CRU began Tuesday in Glendale, Ariz., and continues through Thursday.