How Should Independent C-Stores Respond to the Competition of National Retail Giants

As we enter the fourth quarter, it’s time for convenience stores to think about their 2018 marketing plan. With near 155,000 convenience stores in the U.S., competition is certainly fierce. To make the matter worse, large retailers and grocery stores—Walmart, Starbucks and Hy-Vee to name a few—are also trying to take a bite off the pie by expanding their grab-n-go, hot foods, delivery, and drive-thru services. Their goal? To capitalize on the convenience factor. It is no secret that the strength of C-Stores lies in its convenient location, extended hours of operation, large variety of merchandises, and speedy services. However, as large retailers close the gap on those fronts—exemplified by the launch of the revolutionary Amazon Go—how can C-stores differentiate themselves and retain customer loyalty?

Below is a list of actionable items to help C-stores show the value of innovation and all that a C-store has to offer.

1. Go Mobile

In this day and age, going mobile is no longer an option. It’s a must. Whether through SMS messaging or mobile apps, C-store competitors are delivering products and services to the customers with a touch of a button. C-stores need to make it easy for their customers to reach them and connect with them. More importantly, they want to be there with an offer while customers are browsing. Mobile marketing communicates the business' messages to its audiences in a way that is real time and personal, so the business can effectively capture customer attention and bring them through the door.

2. Focus on Food-Service

A weakness of the C-store is that it is largely restricted by its location’s population density and traffic flow. To combat that, it needs to break through the location barrier and make the store a destination. It should to do so through food. Why? Because the average gross margin on merchandise is only 27%, while the average gross margin on food-service is 43.7%. Yet, food-service sales only encompass 15% of total in-store revenue. Check out this article on the profitability of food service. But don’t start loading up on the Twinkies. The key is to embrace a better balance between health and indulgence to help meet the evolving demand for nutritional products without alienating core consumers.

3. Amplify the Convenience Factor

This includes creative payment functions that maximize convenience. For example, apps such as Pilot Flying J and Speedpass+ allow drivers to choose a fuel lane based on wait time estimates and make payments through an app or other touchless solutions such as MasterCard. C-stores should also explore delivery service options through yelp or their local delivery services to expand its customer reach. 

4. Look Smaller to Grow Bigger

In other words, localize. Leverage the ability of smaller independent shops to remain flexible and cater to the needs of the local customers, whether it’s later hours or special accommodations, products, and deals. Build the store's community presence through participation in community events or involvement with notable nonprofits in its area. Take advantage of location based social platforms such as Yelp to increase its word of mouth effect. Lastly, use social media to differentiate the store from its competitors by adding an original twist or personality to its profile. People will always be responsive to enthusiasm, sincerity and passion.

As C-stores continue to experience competitive pressures from large retailer moving into the convenience space, they must pivot quickly and strategically to establish their points of differentiation. Talk to a marketing specialist today to discover how to leverage your unique pivotal points to continue thriving in convenience retail.