The Tuesday morning of the National Advisory Group (NAG) Conference kicked off with a presentation on some exclusive research, “The Convenience Experience Report.”
NAG partnered with Bluedot to learn what Americans think about c-stores and quick-service restaurants (QSRs). Some 3,300 customers across the U.S. responded to the survey.
Judy Chan, vice president of marketing for Bluedot and Nate Brazier, president and chief operating officer for Stinker Stores, discussed the findings of the study and how it applies to retailers.
Chan pointed out that Americans view c-stores on par with fast food restaurants. Driving customers into the store from the pump is a key challenge. The study found that seven in 10 customers enter the c-store when pumping gas, but only two enter every time. Bluedot looked at what c-stores can do differently to convince the other five to enter the store.
When customers are going to a c-store, one in four are going there for lunch, and snacks are the largest draw. Beyond lunch, value menus are popular. In fact, 73% of customers are ordering off value menus more, often due to cost. Some 31% are ordering off the value menu, but would prefer not to.
Wait time is also a major consideration for customers. Some 57% of customers will leave and skip purchasing if there’s a line in the c-store.
Brazier pointed to self-checkout as an opportunity to help customers avoid the lines. “Instead of having two to three people at the cash wrap, you can have one (employee) and have self-checkouts to help avoid lines.”
Loyalty programs offer an opportunity and are popular with customers, but they are also falling short of expectations. Gas discounts came up with a 30-point different between desire and reality. Some 74% said they want gas discounts from a loyalty program, but only 44% are actually receiving it. C-store deals and freebies is another area with a perception gap.
“There is a lot of work to be done in closing that gap in terms of customer expectations,” Chan said.
Half of consumers look at their phones while pumping gas. Some 86% of customers will download a gas app for discounts, and 57% said they would download an app to earn and track loyalty points.
As retailers develop their digital strategy, in app payment is key, Brazier said. “The customer is telling us their preferred way to pay. At Stinker we rolled out our app nearly 24 months ago, and we’re going through a process to enhance that. We’ve got to include this.”
Of respondents 62% would visit a c-store more often if a drive-through or curbside pickup was available. Six in 10 would visit more often if the mobile app would unlock the pump experience.
Tasty coffee is a huge driver. Some 67% of customers would make a separate stop at a coffee chain even though they’re stopping at a fast-food restaurant for food; 61% would consider it and 39% already do. C-store customers are willing to interchange occasions with fast food, but c-stores need to deliver on convenience, Chan pointed out. Coffee chains have taken a bite out of fast food and c-stores can follow suit.
Fuel & EV Strategy
In a session titled “Developing Your Long-Term Fuel Strategy,” speakers Daillard Paris, director of petroleum supply and trading, Sheetz; Peter Rasmussen, founder and CEO, Convenience Energy Advisors; and Sridhar Sudarsan, chief technology officer, SparkCognition, shared insights on how the future of c-stores is being reshaped by the integration of electric vehicles (EVs) and other alternative fuels.
Rasmussen shared an overview of the market, providing education on the EV landscape. He noted he believes EV is part of the future strategy, but that gas will still be important for a long time to come. He also discussed how environmental policy is impacting the landscape.
“We can’t ignore where the future is going,” he said.
For example, there are 17 states today that are part of a program where they plan to ban the sale of EVs by 2035.
It’s important for retailers to be aware that there’s competition on EV from outside the sector, from quick-service restaurants, drug stores and more.
For the next five years there are a lot of funds available to support EV adoption, and retailers should take advantage of this soon, before those opportunities are claimed by others. The National Electric Vehicle Infrastructure Formula (NEVI) fund is a big opportunity, but there are also state grants and other funding retailers can pursue.
Sudarsan shared some insights on EV charging trends from SparkCognition. SparkCognition found that 8 p.m. is the peak time for EV charging, while during the day there isn’t much charging occurring. That makes dinner a key opportunity for retailers. When it comes to days of the week, there isn’t much variability, but Mondays and Saturdays tend to have more vehicles coming in to be charged, with a lower peak in the middle of the week. When it comes to dwell time, the average amount of time is 24 minutes, but variability ranges from four minutes to 98 minutes.
Customer personas for EV drivers include ‘overnight chargers,’ who arrive in late evening and stay longer than an hour. These customers tend to leave their vehicle and walk away from the store rather than going into the store. ‘Frequent customers’ are loyal customers who charge for 15 minutes and enter the store. The third charger is the ‘rare charger’ who doesn’t come to charge frequently and doesn’t necessarily enter the store.
Sheetz has been an early adopter of EV charging.
“What we’ve learned is the EV customer is a fickle one in the sense that they’re not the traditional customer,” Paris said. “We’re learning we have to upgrade the charging experience to make sure they have a canopy.”
Sheetz is rolling out canopies and putting solar panels on the canopy to feed the charger battery system.
“It’s not that (EV customers) don’t spend the same basket size,” Paris said. “If you can get them to come in, they spend a similar basket size. It’s can you get them to come in and can you get a return on investment?”
Cleanliness and a strong food offering can make a difference in driving charging customers into the store.
Sheetz began entering the EV charging market after there was a call in its communities for EV charging.
“We thought this would give us good brand perception,” Paris said. “The landscape is changing always around us. … This is right in our wheelhouse of trying to be on the forefront of the cutting edge as the landscape changes.”
“It’s about diversifying your energy and future proofing,” Rasmussen said. “EV will move faster depending on where you live in the country.”
Paris noted he sees the EV customer trending toward a middle-aged upper-middle-class individual living in a densely populated area, but he added that as costs are lowered on EV vehicles he’s starting to see more younger individuals being able to afford EVs. For some people it’s a cost benefit, he noted.
“We learned the demographic does not line up well with our food offering, and we’ve had to look at refreshing our food offering to have fresher healthier options,” he said.
Rassmussen added that today the EV market is luxury, but that could change quickly in the coming years as EVs costs come down.
Following the educational sessions, retailers picked a breakout session to attend, selecting from a range of topics from human resources to tobacco to foodservice and more.
The NAG Conference continues through Wednesday, March 29.