Hitting the Hot Buttons

Nielsen's Hale encourages operators to think outside the c-store box.

By
Melissa Vonder Haar, Tobacco Editor

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Shoppers Who Matter

Per Nielsen’s numbers, it’s not millennialsthat retailers need to connect with; theyounger generation spends less and makesfewer shopping trips than ever before. Halebelieves the two groups who matter most to retailers are also often the most underrepresentedgroups in terms of advertising:older and multicultural shoppers.“You can’t wait any longer to realizethat multicultural populations have to bea big part of what you do, because that’swhere the growth is,” he said. “In certainmarkets, multicultural populations arealready the majority. It’s not just in 2043—it’s now.”Bilingual packages are one way toappeal to multicultural consumers.Advertising is another: Research showsmulticultural shoppers respond well toads featuring their peers, Hale said. In fact,so do baby boomers, despite the fact thatthey’re also underrepresented in the currentenvironment.“The boomer market is huge; wespend a lot of money because we havea lot of money,” said Hale. “As a matterof fact, we account for about 50% ofspending that goes on in this country.Yet we only get about 10% to 15% of theadvertising focus against us. Somethingis wrong there.”Of course, it’s not just advertising thatdraws boomers in. Hale suggested healthconsciousconvenient alternatives, such asportion-controlled food offerings, whichboomers are willing to pay a premium for.“Opportunities for you to think about:how you deal with the age of shoppers inyour stores and how you go after them,”Hale said. “There are some big spendersout there.”

Convenient Solutions

“In terms on convenient consumer solutions,look at what Amazon has done ina year,” said Hale. “They grew their onlineglobal business from $48 billion to $61billion in one year. They’re 10 times biggerthan their next 10 closest competitors.They’re 10 times bigger than Walmart.They’re a real force to be reckoned with.”While Amazon may not seem like a realthreat to the c-store industry, the popularityof online shopping could ultimatelyhave an effect on the channel, Hale said.“I can see a day when supermarketsare going to see their center store shrinkeven more because more and more peopleare going to buy those products online,”said Hale, predicting grocery stores willput more of a priority on foodservice tomake up for the losses. “That’s going to becompetition for you, long term.”

Health and Wellness

Healthy options may seem an odd fit forthe c-store industry. And, at first glance,Nielsen’s research seems to support suchthinking.

“We have a segmentation schemewe use at Nielsen that comes from theNational Marketing Institute that segmentsconsumers into how engaged theyare with health and wellness,” said Hale.“It ranges from the ‘well beings,’ who arevery engaged in making sure what goes inthem is good for them and are also verygreen in how they live, to the ‘eat drinkand be merries,’ who really couldn’t careless about being healthy.”Not surprisingly, it’s those on the lessconsciousside of this health-and-wellnessspectrum that tend to shop at conveniencestores, but Hale believes the “well beings”could present a very profitable opportunityfor the channel.

“The people who are engaged in healthand wellness spend a lot more and makea lot more trips,” he said. “They’re veryimportant but tend to make more trips togrocery and club.”

The growing market of health-consciousconsumers has driven retailerssuch as 7-Eleven to commit to offeringhealthier, fresher fare at its retail locations.This kind of commitment won’t work forall retailers; it’s a matter of looking at achain’s shoppers to determine what kindof health-and-wellness mix will best driveprofits in their locations.

“You have some flexibility here,” Halesaid. “Healthy options are something youcan win with, but you need to be judiciousabout where and how you do it.”

Experimental Retailing

“Here’s an area where I think you guysreally need to pay attention,” said Hale,introducing his final retail hot button. “Icall it cool-factor retailing.”

By the very nature of its name,experimental retailing varies based onthe strengths and market of each retailer.Hale described grocery stores that haveembraced “foodie entertainment” in theirlocations with sports bars, outdoor seatingand food sampling. Beer and winesampling is another way he’s seen retailersexperiment with creating a “cool factor” intheir stores—and sales increases have gonealong with it.

“With all of these retailers focusing alot of energy around cool, is there someway you can do that?” Hale asked. “I don’tthink you have to go overboard. I thinkbeer caves provide that to some extent, butis there a way to provide more coolness towhat your stores look and feel like?”

With the competitive threat of grocery,drug and dollar continuing to increase, it’sa question worth asking.

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