By Erin Rigik, Senior Editor
Monday at the NACS Show kicked off with a number of educational sessions to help convenience store retailers maximize success.
In an educational session on private label products, convenience store chain QuickChek with 140 stores in New Jersey and New York, encouraged convenience store retailers interested in branching into private label products to ensure they have a reason and a strategy for each product they aim to launch.
It’s a good time to consider delving into private label. U.S. consumers are spending $120 billion annually on private label products, and some 42% are buying more private label than they used to with 84% saying private label is as good as or better than a national brand.
All other retail channels are outpacing convenience stores when it comes to private label offers. C-stores only represent 1.8% in dollars and 2.5% in units of private label offers.
QuickChek’s Vice President of Sales and Marketing John Schaninger, and Bill Tencza senior category manager of QuickChek, shared their chain’s private label experience.
The first step is to complete an assessment about transitioning to private label.
“Ask yourself why? Is it to build a brand image? Is it to generate more profit?” said Tencza. With the assessment it is important to understand product costs and potential vendor leverage as well as to determine if you are able to come out with a product that adds value.
“It doesn’t do any good to come out with a product that is low quality. Quality is key,” Tencza said.
With the assessment completed, determine a go-to-market strategy for each product. Where will you be compared to the national brand in terms of price, quality, sizes offered and number of SKU’s?
Tencza pointed out that 20 SKUs can be challenging to manage, while six of the top SKUs can bring a good profit.
“What is going to drive purchase, price or quality, you must determine that,” Tencza said.
The third step is bringing the product to life. When it comes to packaging design be consistent across all packages, even if everything doesn’t match exactly. Also, make sure packaging reflects the company brand and looks professional.
Determine your delivery system—will it go through a warehouse or DSD?
Finally figure out all costs upfront. “You want to know every cost that goes into the product upfront, from packaging to delivery,” said Tencza.
From there, advertising the product, placing the product correctly in the store to maximize sales and knowing when to cut ties if a product isn’t working are keys to success.
In a session titled, “Beckon Customer Dollars With Beacon Technology,” Tory Williams, founder, Zingon, explained to c-store retailers the ins and outs of beacons and how they might benefit a convenience store business.
Beacons emit a low strength Bluetooth signal and, assuming a customer has downloaded the appropriate app and has a smartphone with Bluetooth turned on, the beacon can let you know when a customer enters the store, where they are and a host of other information, even allowing you to push coupons or information about products to them as they shop.
Flash Foods, with 173 locations in Georgia and Florida, currently uses beacons in its apps, and Zingon noted another 10 are in beta tests at other c-store chains.
Beacons can also improve rewards program results, such as offering automatic check in with points, alerting the customer to on-sale items matching their shopping history, all without the customer having to do anything once they have downloaded the app.
Doug Middlebrooks, assistant vice president, shopper marketing for Coca-Cola North America noted that while 75% of people have at least a smartphone or a smartphone and tablet, only 6% of consumers today say they are using a convenience store app. The top reasons people use apps is to view promotions and deals or to get coupons and secondly people us apps to make a purchase.
He outlined seven uses of beacons. Beacons offer insights, meaning retailers can gather information about people, such as how much time they spend in the store, at the foodservice area and the path they walk through the store. They allow retailers to give customers information, such as a message on a limited time offer, or new store hours. Beacons can take loyalty to the next level by allowing you to push a message to the customer that says, “Hey, we see you bought five of these products this week, here’s the sixth free.” Beacons can also allow retailers to push coupons targeted personally to the customer. They can also be used to advertise by pushing an ad to their phone when they pass a certain product. Beacons can also allow for elements of gaming, such as a scavenger hunt where they get a clue every time they pass a beacon, or trivia, etc. Beacons are also useful to operations, by helping with the tracking out of stocks or temperature readings.
But before placing beacons around your store, Middlebrooks cautioned retailers to ensure their c-store app is purposeful and appealing on its own. Once the app is launched, do a major marketing campaign to alert customers to the launch and be transparent about the information you are collecting. Lastly, beacons should be just one part of a marketing mix and are not a be-all-end-all solution.