Convenience stores have been an American staple for close to 100 years, serving an important function for the average consumer. But with technology changing so rapidly and major retailers like Amazon making moves that threaten the market, will c-stores continue to be relevant to the next generation?
It’s necessary to answer this question because Gen Z (the next generation with purchasing power) constitutes nearly 27% of the entire U.S. population and is on track to be the largest generation of consumers. However, its shopping habits are substantially different from other groups. If convenience stores can’t capture the interest of this generation now, they’ll struggle to stay relevant … and stay in business.
Here are six trends that conveniences stores need to be aware of – and capitalize on – to create loyal shoppers among Gen Z.
- They are technology natives. Gen Z is the first true digital generation, and its members are accustomed to being able to use mobile phones, apps, and the Internet to do anything they need to do. That means, of course, that a c-store must incorporate technology into its interactions with customers, whether it be apps, mobile ordering, paying via mobile, or some combination of them.
- They expect diversity in their food. We already know that this is a “foodie” generation – perhaps even more so than others. But Gen Z has wider access to a variety of cuisines from cultures around the world, which makes it incumbent upon convenience stores to offer many different types and flavors of foods.
- They expect a mobile presence. Beyond a fondness for technology in general, the members of Gen Z are especially attached to their mobile devices. They expect the businesses they frequent to cater to them in the form of a mobile-optimized site, an app, a mobile loyalty program, and/or SMS messaging.
- They use online reviews to guide choices. More than any other generation, Gen Z makes buying choices based on online reviews. Studies have shown than a one-star increase for a business on Yelp leads to a 5-9% increase in revenue. C-stores need to constantly monitor their online reviews, as well as encourage happy customers to write them.
- They have an expectation of immediacy. Members of this digital generation are accustomed to being able to access what they want when they want it. Convenience stores, therefore, need to implement ways for Gen Z customers to get items as quickly as possible, including offering NFC Loyalty and mobile payment.
- They regularly order online. There has never been a time when Gen Z couldn’t place orders for things online. Just a few years ago, two-day shipping was a revelation, and now people can have a reasonable expectation of getting a delivery in less than an hour. A c-store that wants to stay competitive in the marketplace needs to offer store delivery, curbside pickup, or both.
Digital guest engagement programs are the key to making Gen Z (and all generations) feel as valued as possible. They enable c-stores to gather data and use it to deliver promotions, discounts, and messaging that is relevant on an individual level. These programs can include and/or integrate with an app, mobile payment, delivery options, and any number of other digital touchpoints.
Because the promotions are personally meaningful, customers partake in them and visit the c-store location more frequently. And encouraging those habits when Gen Z is young helps create loyalty for life.
Engaging Gen Z customers requires a comprehensive plan. To learn more about attracting this generation to your stores, check out our on-demand webinar, “Does Gen Z Have a Need for Convenience Stores?”
In the age of Big Data, having a wealth of information can be both a blessing and a curse. There are a lot of valuable insights to gain, but you need a team with the right skillset to determine what is important and apply it to the creation of effective campaigns as well as your overall marketing strategy. Since no solution is going to work for every brand, taking a deep dive and developing a customized approach will always yield the best results.
Here are three data-backed tools that you should consider implementing to engage customers and increase sales:
- Subscriptions: Falling under the larger umbrella of stored-value payment, subscriptions are a growing trend. Some brands choose to let their customers load prepaid meals onto an account, which is not much different than preloading cash to spend. In both cases, when guests store value on a card or in an account that’s linked to a loyalty program, visits and spend typically increase. Prepaid meal passes have sometimes resulted in incremental spend being boosted by up to 80%. When stored value is paired with auto-reload features, it can produce additional benefits like a 15% increase in weekly visits.
- Artificial Intelligence: More than a hip term, AI is a tool that is helping marketers determine the most impactful ways to reach their guests at a reasonable cost. Taking individualization beyond bands and segments allows marketers to optimize promotions and maximize their ROI. One-to-one visit challenges that offer rewards based on individual guest behavior have generated remarkable results. One such challenge saw the number of visits increase 10.5% across all guests and almost 28% among those who were already visiting somewhat regularly. Choosing the right promotion can entice more visits and spend from even your best guests.
- Segmentation and Predictive Scoring: Targeting guests by likelihood to take actions can further refine any marketing strategy. Whether guests are inclined to visit once a week or once a year, you can craft promotions that will work for each segment. Thoughtfully structured campaigns typically drive a 15-25% increase in visit frequency and prompt behavior changes like visiting at a different time of day, spending more, and trying new products. Predictive models can also be used to identify segments that are likely to visit without receiving an offer, helping you avoid cannibalization.
In the hands of the right data insights team, these tools will motivate increased visits and spend, which ultimately leads to improved top-line sales. To learn more about building a successful loyalty program, download “Target Low-Frequency Guests. Here’s Why.”
Many restaurants face more of a challenge during the summer months, when regular guests may be out of the area on vacation or taking advantage of the warm weather to grill at home. Using your guest engagement platform to create innovative campaigns will help drive visits and incremental spend. Check out these five proven ways that your restaurant can keep your guests engaged and excited all season long.
1. Prepaid Meal Passes
Last summer, HuHot Mongolian Grill revamped its traditional summer gift card promotion and launched the HuHot Grill Pass. During the month of July, guests purchased the Grill Pass for 5, 11, or 25 entrées and had until the end of the year to redeem them. Since the guests had prepaid for their meals, they were more likely to buy additional items like appetizers and desserts. In fact, HuHot found that purchasers spent 80% more than the cost of the Grill Pass during the redemption period. Because of the initial expense, these passes keep guests coming back again and again.
2. Instant Wins
July is National Hot Dog Month, which presented a perfect opportunity for National Coney Island to reward its guests with instant wins. Throughout the month, new and existing program members had the chance to win free menu items like beverages or fries with every swipe of their loyalty card. After winning, guests had 14 days to come back and claim their prizes. This instant-win promotion not only created excitement but also delivered huge impact for National Coney Island’s business, nearly doubling enrollment and increasing visits by almost 40%.
Giving your guests the opportunity to complete a quest in order to receive a reward is a great way to increase transactions. The Yogurtland Flavor Quest challenged guests to visit and earn stamps in a virtual passport by trying new flavors that were released throughout the summer. The more new flavors they tried, the more yogurt they could earn at the end of the quest. In the first year that this promotion was run through the Yogurtland loyalty program and mobile app, participation tripled and 32% of the participants visited once a week or more.
4. One-to-One Visit Challenges
Giving your guests reasons to visit their favorite location more frequently is a successful way to increase your sales. With one-to-one visit challenges, you can vary the length or the number of visits needed in order to maximize ROI. Whereas infrequent guests might have to make fewer visits over a longer time span, your best guests may need to visit more often over a shorter period to complete the challenge. Using machine learning to figure out the best challenge for each guest gives you the best chance to truly drive incremental visits during these slower months.
5. Win Back Campaign
Summer is a great time to attract guests who haven’t visited recently through a win-back campaign. One particular restaurant experienced great success by sending the richest offers to guests who hadn’t visited in the past 12 months and lesser offers to those who were already actively engaged. During one of its win-back campaigns, the number of visits from infrequent guests increased by 176%. Once these guests have returned, there will be opportunities to keep them coming back all summer.
Learn how you can introduce these high-impact promotions to your marketing strategy – by calling Paytronix at 617-649-3300, extension 5 or requesting a demo today.
Restaurants commonly make three mistakes that restrict their ability to acquire new customers, keep them active, and encourage more frequent visits. You might be limiting the impact of your customer loyalty program without even realizing it, but eliminating these three things will help spur more growth.
- Stop requiring app downloads as the only way to participate. According to a recent Harris Poll survey, 58% of respondents were less likely to join a loyalty program that required them to download an app. Another study revealed that 18% of adults in the U.S. still don’t use a smartphone. Considering the number of people who don’t want to download an app and those who are unable to, why would you make that the only method for guests to enroll? By letting more guests interact with your restaurant in the ways they prefer, you increase your ability to market to them and drive incremental visits and spend. Ideally, guests should be able to enroll at the POS, via text-to-join, and even with a physical card. A mobile app is a valuable tool, but don’t make it your only one.
- Stop sending non-personalized emails. Your customer engagement strategy should be focused on building relationships with your guests. Sending the same generic email to everyone hinders your ability to connect with individual customers. According to SendGrid’s 2018 Global Email Benchmark Report, guests receive an average of seven emails per month per brand, with open rates of about 18%. How can you make sure that your marketing communication doesn’t become part of the 82% that guests never see? One way is by personalizing your emails directly in the subject line. When customers are only one visit away from earning a reward, including that information along with their name in the subject line will cut through their crowded inbox and influence them to visit. Getting customers to enroll is an important first step but keeping them active by communicating timely offers and promotions is what creates value for your restaurant.
- Stop missing opportunities to target nearby guests. An effective way to increase personalization and drive more visits is by utilizing geo-targeting in your marketing strategy. If some of your customers are nearby and debating where to eat, pushing them a notification at that time may be all the prodding needed for them to select your restaurant over all of their other options. Sending targeted messages to nearby guests results in a significantly higher visit rate than cold email blasts. By reaching out when they’re already close to a location and reminding them of available rewards or promotions, you can accelerate their visit frequency and trigger valuable incremental visits.
To learn more about why you should stop doing these three things, check out our free, on-demand webinar, “3 Things to Stop Doing in 2019.”