January 3, 2008
CSD: The Pulse of the C-Store
By Kim Sharrah
Through a special arrangement, what follows is an excerpt of a current article from Convenience Store Decisions magazine presented here for discussion.
The convenience store front counter provides the perfect canvas to showcase a mix of hot new items and profitable impulse buys that will grab customers’ attention. But experts agree that this area is among the most underutilized selling places in the entire store.
At Kum & Go stores in Iowa, a variety of different display vehicles are used to merchandise the front counter, keeping it neat and organized so that customers can easily select products. Margins can be high on timely items, such as movie-themed candy, or ones that carry popular subject matters, like a drink series lighter. It also helps that suppliers provide premium display sets that are specifically designed to maximize front counter space.
“A customer’s impulse purchases are most often fueled by curiosity,” said Dana Sump, marketing category manager for Kum & Go. “If a product appeals to the senses and is brightly colored, it has a better chance of selling.”
Adam Wilson, president and owner of AJ Convenience in Florida tests out new items at the front counter about every two months to gather enough sales data to determine if the product is worth keeping for the long term.
“Some of the products at our front counter that start out as impulse buys can eventually transform into destination items,” said Mr. Wilson. “For example, the liquid energy shots have become very popular and people are starting to specifically ask for them.”
AJ Convenience also carries single-serve candy on the front counter. The candy’s low-price points of 15 to 25 cents encourage customers to toss in several treats with their purchase.
Competitive pricing can make all the difference on the front counter for Fady Hanna, owner of First Choice in Florida. His store is one of four competing c-stores within a two-mile radius, and he always tries to stock the newest items with the lowest prices.
Mr. Hanna stocks items that people may forget to purchase if they weren’t sitting in front of them at the checkout, such as gum and lighters. He also prescribes to the same philosophy as Kum & Go and AJ Convenience, that if an item isn’t moving from the counter, it doesn’t belong there.
“The front counter items should promote themselves,” said Mr. Hanna. “The key to selling impulse items is the right product mix so that you have something for all your customers.”
Discussion Questions: What are some key strategies and/or tactics to drive impulse buys at the front counter in convenience stores? What are some common mistakes there? Are traditional impulse purchase drivers still as important to convenience store front counter performance as they’ve been in the past?
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I want to join the less is more. Presenting goods for sale isn’t the same thing as marketing and many c-stores look like a hurricane just hit the register area.
C-store merchandising has a long way to go. Most stores today have as much crammed into the front-end as they can. One even has to reach around merchandise just to pay. Yet much of the rest of the store’s merchandise is gathering dust.
One of the image problems C-stores have is a junky front end. This retail segment needs to start with identifying target consumers and then merchandising to them. Suppliers will be happy to pay for front-end racking…but make it clean, easy to shop and to transact business.
The checkout counter continues to be the most precious space at retail, particularly in convenience stores. The idea of showcasing new, colorful, interesting items is a big one, but must be done keeping “less is more” in mind. Too many outlets succumb to the temptation of putting lots of innovative high margin impulse items on the counter at the expense of the old faithfuls with much higher velocities.
Certainly products such as energy shots will get more trial by placement at the front end…but how much more name brand gum would have sold from the same space?
C-stores need to start being efficient in planning the front counter space and reducing the clutter. Categories should also be periodically rotated off of the front counter display space; this will help in identifying which categories are best targeted for impulse purchases. And impulse buys need not always be driven from the front counter; even with C-store space limitations, effective usage of POP can help drive attention to specific categories.
A study by POPAI suggests that about 40% of C-store consumers recall the presence of in-store advertising and recall seems to be especially high for categories like carbonated beverages, cigarettes and coffee.
A C-store front counter is a mini-treasure hunt area. It’s always fun to poke around and try new stuff. While a good place to test new things, when the test is over and the item gets shelved elsewhere, many shoppers won’t take the time to look for it. Maybe C-stores should also have a designated shelf section for these items that turn quickly but are usually shelved in out of the way places.
A “hot items” area that each store manager puts together would be another destination for regulars that could be a promotional opportunity area. C-stores could develop a little more personality!
Every convenience store chain should use up-to-date planogramming software to maximize margin per square foot. The payoff is nowhere greater than at the cash wrap, since every shopper goes there. Frequently rotating the items presented and testing new displays and prices can pay off handsomely. Weekly, and in some cases, daily changes, are appropriate for testing. And the displays are often best optimized by store, not by region.
Several years ago, Dechert-Hampe conducted an extensive study of impulse merchandising in C-stores as part of our Front-End Focus research series. That study showed that consumers do not shop the entire Convenience store, but go in for one or two destination items such as cigarettes, lottery tickets or beverages.
The opportunity is to generate impulse sales, especially of related items. Candy and Gum are particular opportunities, but shoppers seldom go to the in-aisle location. Therefore, it is critical to have these at the checkout.
The study also suggested merchandising approaches around the store and showed that multiple locations of impulse items lead directly to increased sales. For example, candy should be located at the coffee bar and the beverage cooler as well as at the checkout.
Also, since the base purchase at a Convenience store is often small, the incremental impulse sale can have a dramatic impact on total transaction size.
Good comments all around. I particularly agree with Frank Dell. I’ve seen many stores with bad clutter at the register that could be cleaned up a little with strategic placement of a spot display in dead space by the register. That’s where I often find myself waiting in line while some bozo goes through a whole list of lottery numbers he wants to buy, which can take forever. I’d gladly look over merchandise or magazines in such a display while waiting, but that four or five feet before the register is always dead space. You either have to reach over the shoulder of the guy in front of you, or take a few steps away to a display and lose your spot in line. Just a thought, folks.
The checkout is the ultimate impulse area and is also the very last merchandising impression a convenience store makes on a shopper.
The traditional convenience store formats (excluding for a minute the “New” convenience stores such as Tesco Fresh’N’Easy, Sheetz and Shnucks formats) that sell Gas, Cokes and Smokes have usually been pretty poor at front end execution.
Reading the comments from the featured convenience store merchandisers is like taking a “retail 101” retail class. My point is that the article’s premise–innovative and new items create excitement at checkout–is like saying that endcaps are a good way to promote feature merchandise.
It seems to me the real issue is how effective are traditional C-stores in executing impulse/checkout merchandising? It is more common than not to find poorly merchandised and cluttered checkouts with aged inventory and broken assortments competing with new displays. Is this because of poor planning from the C-store’s merchandising or is it a result of poor operational execution? I suspect that merchandising is partially to blame but lean heavily toward in-store and operational execution to be the culprit.
The turnover in convenience stores is undoubtedly much higher (though I am unsure of the velocity) than traditional retail chains and therefore operationally more challenging. It may be that part of the answer in increasing impulse sales lay in fixturing a checkout differently to avoid the haphazard merchandising typical with counter top displays.
The amount of merchandise sold from the register area is entirely dependent on the attitude of the person behind the register. Impulse buys are great and hot looking displays are great but the person who doesn’t provide outstanding customer service at the till will destroy any chance for the customer to make that impulse buy.
It’s a two pronged approach when it comes to register area sales. Amazing displays with hot and trendy products and the willingness to serve the customer in such a way that makes him want to buy more will increase the customer’s basket and get those high velocity items out the door.
C-stores, by their nature, are tremendously challenged with grabbing the customer’s attention. Even when the customer enters the store, the natural tendency is to exit as quickly as possible.
With only milliseconds to elicit an impulse buy, operators are challenged to engage the customer with as many sales messages as possible. This includes window and shelf signage that shows a picture of the new item, and pump toppers. Many locations are even beginning to use video at the pump that combines entertainment, news and, of course, product promotion.
Whatever method works the best, it is key for the operator to keep that front counter stocked…especially for those new items. Otherwise, the entire message loses its steam at checkout and may drive the customer to another location.
Understanding that the area near the front counter is an important area for merchandising is the first step. Clearing the clutter and displaying items so that they are noticed while people wait in line or walk up to the counter is the second step. Changing items so that the front counter area constantly has new items might actually help increase repeat visits from people who enjoy looking for new items. Being conscious of how merchandising can work to increase sales around the front counter should be important as part of the overall merchandising strategy in the store.
Many have said that the front counter is extremely cluttered, and the C-stores are doing a poor job of maximizing this space for marketing purposes. They would be better off removing the majority of products that they have on the front counter, and create a specific area for introducing new, convenient “on the go” products. They could create a monthly rotation program that they would market to the major CPG companies, and their revenue would come from both the rental of the high-exposure area, as well as for the increased sales of the impulse item.
The C-stores need to take better advantage of their customer count, and use it as an asset that can be monetized.
One of the best solutions I’ve seen is modular fixtures, whereby small racks are moved from an end-cap to the counter at different times of the day. Picture a promotional end-cap containing five small racks that are constantly rotated to the front counter throughout the day.
It’s extra work for the store, but creates excitement during every trip to the store.
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I want to join the less is more. Presenting goods for sale isn’t the same thing as marketing and many c-stores look like a hurricane just hit the register area.
C-store merchandising has a long way to go. Most stores today have as much crammed into the front-end as they can. One even has to reach around merchandise just to pay. Yet much of the rest of the store’s merchandise is gathering dust.
One of the image problems C-stores have is a junky front end. This retail segment needs to start with identifying target consumers and then merchandising to them. Suppliers will be happy to pay for front-end racking…but make it clean, easy to shop and to transact business.
The checkout counter continues to be the most precious space at retail, particularly in convenience stores. The idea of showcasing new, colorful, interesting items is a big one, but must be done keeping “less is more” in mind. Too many outlets succumb to the temptation of putting lots of innovative high margin impulse items on the counter at the expense of the old faithfuls with much higher velocities.
Certainly products such as energy shots will get more trial by placement at the front end…but how much more name brand gum would have sold from the same space?
C-stores need to start being efficient in planning the front counter space and reducing the clutter. Categories should also be periodically rotated off of the front counter display space; this will help in identifying which categories are best targeted for impulse purchases. And impulse buys need not always be driven from the front counter; even with C-store space limitations, effective usage of POP can help drive attention to specific categories.
A study by POPAI suggests that about 40% of C-store consumers recall the presence of in-store advertising and recall seems to be especially high for categories like carbonated beverages, cigarettes and coffee.
A C-store front counter is a mini-treasure hunt area. It’s always fun to poke around and try new stuff. While a good place to test new things, when the test is over and the item gets shelved elsewhere, many shoppers won’t take the time to look for it. Maybe C-stores should also have a designated shelf section for these items that turn quickly but are usually shelved in out of the way places.
A “hot items” area that each store manager puts together would be another destination for regulars that could be a promotional opportunity area. C-stores could develop a little more personality!
Every convenience store chain should use up-to-date planogramming software to maximize margin per square foot. The payoff is nowhere greater than at the cash wrap, since every shopper goes there. Frequently rotating the items presented and testing new displays and prices can pay off handsomely. Weekly, and in some cases, daily changes, are appropriate for testing. And the displays are often best optimized by store, not by region.
Several years ago, Dechert-Hampe conducted an extensive study of impulse merchandising in C-stores as part of our Front-End Focus research series. That study showed that consumers do not shop the entire Convenience store, but go in for one or two destination items such as cigarettes, lottery tickets or beverages.
The opportunity is to generate impulse sales, especially of related items. Candy and Gum are particular opportunities, but shoppers seldom go to the in-aisle location. Therefore, it is critical to have these at the checkout.
The study also suggested merchandising approaches around the store and showed that multiple locations of impulse items lead directly to increased sales. For example, candy should be located at the coffee bar and the beverage cooler as well as at the checkout.
Also, since the base purchase at a Convenience store is often small, the incremental impulse sale can have a dramatic impact on total transaction size.
Good comments all around. I particularly agree with Frank Dell. I’ve seen many stores with bad clutter at the register that could be cleaned up a little with strategic placement of a spot display in dead space by the register. That’s where I often find myself waiting in line while some bozo goes through a whole list of lottery numbers he wants to buy, which can take forever. I’d gladly look over merchandise or magazines in such a display while waiting, but that four or five feet before the register is always dead space. You either have to reach over the shoulder of the guy in front of you, or take a few steps away to a display and lose your spot in line. Just a thought, folks.
The checkout is the ultimate impulse area and is also the very last merchandising impression a convenience store makes on a shopper.
The traditional convenience store formats (excluding for a minute the “New” convenience stores such as Tesco Fresh’N’Easy, Sheetz and Shnucks formats) that sell Gas, Cokes and Smokes have usually been pretty poor at front end execution.
Reading the comments from the featured convenience store merchandisers is like taking a “retail 101” retail class. My point is that the article’s premise–innovative and new items create excitement at checkout–is like saying that endcaps are a good way to promote feature merchandise.
It seems to me the real issue is how effective are traditional C-stores in executing impulse/checkout merchandising? It is more common than not to find poorly merchandised and cluttered checkouts with aged inventory and broken assortments competing with new displays. Is this because of poor planning from the C-store’s merchandising or is it a result of poor operational execution? I suspect that merchandising is partially to blame but lean heavily toward in-store and operational execution to be the culprit.
The turnover in convenience stores is undoubtedly much higher (though I am unsure of the velocity) than traditional retail chains and therefore operationally more challenging. It may be that part of the answer in increasing impulse sales lay in fixturing a checkout differently to avoid the haphazard merchandising typical with counter top displays.
The amount of merchandise sold from the register area is entirely dependent on the attitude of the person behind the register. Impulse buys are great and hot looking displays are great but the person who doesn’t provide outstanding customer service at the till will destroy any chance for the customer to make that impulse buy.
It’s a two pronged approach when it comes to register area sales. Amazing displays with hot and trendy products and the willingness to serve the customer in such a way that makes him want to buy more will increase the customer’s basket and get those high velocity items out the door.
C-stores, by their nature, are tremendously challenged with grabbing the customer’s attention. Even when the customer enters the store, the natural tendency is to exit as quickly as possible.
With only milliseconds to elicit an impulse buy, operators are challenged to engage the customer with as many sales messages as possible. This includes window and shelf signage that shows a picture of the new item, and pump toppers. Many locations are even beginning to use video at the pump that combines entertainment, news and, of course, product promotion.
Whatever method works the best, it is key for the operator to keep that front counter stocked…especially for those new items. Otherwise, the entire message loses its steam at checkout and may drive the customer to another location.
Understanding that the area near the front counter is an important area for merchandising is the first step. Clearing the clutter and displaying items so that they are noticed while people wait in line or walk up to the counter is the second step. Changing items so that the front counter area constantly has new items might actually help increase repeat visits from people who enjoy looking for new items. Being conscious of how merchandising can work to increase sales around the front counter should be important as part of the overall merchandising strategy in the store.
Many have said that the front counter is extremely cluttered, and the C-stores are doing a poor job of maximizing this space for marketing purposes. They would be better off removing the majority of products that they have on the front counter, and create a specific area for introducing new, convenient “on the go” products. They could create a monthly rotation program that they would market to the major CPG companies, and their revenue would come from both the rental of the high-exposure area, as well as for the increased sales of the impulse item.
The C-stores need to take better advantage of their customer count, and use it as an asset that can be monetized.
One of the best solutions I’ve seen is modular fixtures, whereby small racks are moved from an end-cap to the counter at different times of the day. Picture a promotional end-cap containing five small racks that are constantly rotated to the front counter throughout the day.
It’s extra work for the store, but creates excitement during every trip to the store.