Full coverage of FARE 2013.
The influence of foodservice on convenience-store sales and what sells alongside specific subcategories within foodservice were measured in a study exclusively produced for CSP and revealed at FARE.
Don Burke, senior vice president of Management Science Associates Inc., Pittsburgh, talked about what sold alongside everything from pizza to sandwiches, revealing the results of a 200-store study conducted over six months last year.
While gasoline and fuel were certainly a part of the mix, a surprising foodservice pairing was with additional meals, such as soup. “It could be that as they’re buying their breakfast, they’re trying to buy frothier second meal occasion,” Burke said.
Beverages from different subcategories were often paired. Customers going to the gym may buy a sports drink but then purchase another type of drink to rehydrate. Coffee often came with a purchase of bottled water, suggesting another advance purchase for later in the day.
Dispensed hot and cold beverages were often paired with gas, but the next secondary purchase was in the candy, gum and mints category. Other categories after that were salty snacks and lottery or gaming.
When looking at hot and cold foodservice, it accounted for only 7% of c-store visits in the study. Cold dispensed beverages, on the other hand, were in the 15% range. That said, a lot of opportunity exists, Burke said. For instance, while a high percentage of customers that bought cold foodservice bought gasoline too, it was at a significantly lower percentage than dispensed beverages and gasoline. That difference showed the potential of the cold foodservice category(sandwiches, salads, wraps, etc.) to be a destination category over gasoline.
Here’s a few of the foodservice paring she revealed, wherein consumers who purchased the initial category also bought an item from another category:
- Lunch sandwiches with bottled water and carbonated dispensed beverages.
- Pizza with carbonated dispensed beverages and coffee.
- Breakfast sandwiches with coffee and soup.
- Chicken with soup.
- Baked goods with service deli meats and eggs.
- Soup or salads with fruit and bottled water.
In delving further into the numbers, Jack Cushman, executive vice president of foodservice for Nice N Easy Grocery Shoppes, Canastota, N.Y., said that as one of the four chains in the study, the fact that Nice N Easy sells a “breakfast pizza” may have skewed some of the results.
To that point, Burke said the stores in the study were mostly in the Northeast and maybe why chicken did not fare as well, because that category often does better in the south.
A second panel speaker, Kris Klinger, director of USC Hospitality, Los Angeles, which caters mostly to college student sat the University of Southern California campuses, said for his sites, coffee is a big seller throughout the day, again further driving study results.
Much of the discussion centered on potential adjacencies, or what retailers could place near so-called “destination” items to drive ancillary purchases. To that issue, Cushman said his stores build shelving below their deli cases and stock them with proprietary branded chips. While some chains don’t see that as sales space, Nice N Easy saw an opportunity and has cashed in on it.
In talking about the sources of data, Burke said one was from the point-of sale, while a second source was cellphone surveys, which increased the younger demographic. With that in mind, he said, the study showed c-store foodservice consumers tending to be males ages 18 to 34. In terms of overall c-store shoppers, those younger males represent 27% of shoppers, but that number goes up when focusing on foodservice. Females in that age range of general c-store shoppers were 18% in the study, with foodservice-specific female shoppers falling from that percentage.
Ultimately, foodservice ends up being important not just for the dollars it brings as a stand-alone category, but also for the sales it drives in other categories, Burke said.
Rethinking Retail Hell
Shoppers are malleable creatures. But as easily as a retailer can create a happy shopper, that same retailer can create an old grump, just by the way the retailer organizes a store, according to retail-space designer Kevin Kelley.
Retailers must save customers from visual chaos, or “retail hell,” and usher in order, touchstones and even inspirational elements to drive sales at their locations, Kelley said. The physical design, displays and messaging of stores inside and outgoes a long way in boosting sales potential, said Kelley, whose design firm is based in Los Angeles.
Taking as an example motorcycle icon Harley-Davidson, Kelley said the independent dealers who run the chain’s stores are a tough group to persuade to adopt consistency. He showed slides of chaotic displays in which too much merchandise caused visual clutter, mannequins poorly dressed for the targeted audiences failed to move product, and dark sales spaces contributed to poor sales of relatively expensive motorcycle jackets.
Removing clutter and creating order and logic among the different product categories helped store owners communicate specific ideas, be they about HarleyT-shirts, jeans or expensive motorcycle jackets. He pointed out that the brand has a lot going for it, with a loyal group of bike riders who could relate to its image and the rebellious, masculine lifestyle it promotes. Retailers need to take a page from that text and connect with the story their brand is telling, he said.
Visual cues are very helpful in creating that retail environment. Bringing up theist Hanover, N.J.-based Nabisco brand, Kelley said efforts to develop a shelving area around its Oreo cookies using cues such as cookie jars and rolling pins—a display reminiscent of a country-style kitchen—all helped connect shoppers with the product and ultimately increased sales.
Kelley also talked of a small grocer that needed to compete with big-box, high-volume merchants that were getting into groceries. His firm managed to draw out stories from the company’s history to create a butcher-shop area and a “smokehouse.” He used messaging and farm-inspired signage to communicate that grass-roots backdrop, successful lyre-energizing a family business.
Breaking down psychological elements in play with shoppers, Kelley cited three things:
- Context: Putting the brand against a larger picture or idea, such as Mother Earth or nostalgia for days gone by.
- Cues: Visual components that automatically establish and define things such as time and place.
- Triggers: More elements that tap into the psyche, stirring emotion or larger ideas of inspiration and aspiration.
Many of the ideas Kelley mentioned break the mold retailers are used to regarding shopping patterns. For instance, he said the long supermarket aisle is a dated solution. Cutting aisles into thirds, for instance, can encourage a circular shopping pattern around those three islands, which is more conducive to sales. Even putting “parking” areas, or visual elements that break the aisles down into thirds, can help provide logic and respite. Shelving materials can also playa role, with packaged baked goods doing better when shelves have the look and feel of wood vs. metal.
“Environment affects behavior,” Kelley said. As a company, “we brought together business, science and design, which believe it or not were groups that were far apart in how they viewed the world. We had to create a new language of ‘perceptual design’ that was about how people viewed the world.”