Many CPG brands are poised to increase investment in the c-store channel in 2021.
As our own Chief Revenue Officer Dustin Kuk discusses on our podcast, How Convenient, it’s because c-store has almost always been the ideal trial vertical — allowing brands to drive trials on new products, line extensions, and a broad range of immediate-consumption products.
On top of that, c-store is also the ideal channel for digital integration, with busy, on-the-go c-store shoppers appreciating the speed and frictionless experience that digital offers provide.
Combining c-store with digital gets huge results for CPG brands — increasing brand awareness, trial and sales. But how are they doing it exactly? Let’s take a look at three strategies working right now.
1. Piggybacking on c-store loyalty programs
Image credit: Paytronix
Why are c-store loyalty programs a profitable strategy for CPG brands?
For starters, loyalty engagement in the c-store channel is up 20%. And within that, 80% of engagement is from new loyalty program members.
This big increase is because many large c-store chains (like 7-Eleven and Yesway) revamped their loyalty programs a few years ago — out with the old punch cards and in with popular mobile apps.
This shift put c-stores in a good position to roll out pandemic-related services such as curbside pickup, same-day delivery, and contactless payment and rewards. And consumers responded in kind.
The increase in loyalty at the c-store level stands in stark contrast to what many CPG brands experienced during the coronavirus pandemic.
The panic buying and empty shelves of last spring forced desperate customers to switch brands seemingly overnight. And the mass exodus to online grocery shopping further upended long-standing buying habits.
But CPG brands can piggyback on c-store loyalty by partnering with stores to offer rewards. It’s a good strategy for brands because it provides access to a built-in audience — c-store loyalty members. And loyalty members are valuable customers, spending 29% more per visit than non-members.
Case in point: Yesway + Red Bull, Coca Cola, Nabisco and Frito Lay
If you’re unfamiliar, Yesway is a convenience store chain headquartered in Fort Worth, Texas with 402 stores scattered across the Midwest and Southern U.S.
Yesway’s data-driven loyalty program, Yesway Rewards, has been a resounding success since its 2017 debut.
According to Yesway Loyalty Manager Michael Caldwell, "The nature of the program is basic — customers swipe their card or scan their app when purchasing merchandise or gas at any of our stores and earn points that can be redeemed for free items."
Yesway has found that using loyalty data to develop highly targeted offers has resulted in measurable increases in customer visits and sales.
One campaign, for example, produced a 9% increase in spend compared to a control group. When a secondary data level was added to the campaign (making the reward more relevant to each customer) the spend lift was boosted to over 28%.
Another key ingredient in Yesway’s success is its partnerships with CPG brands. Yesway works with brands like Coca Cola, Red Bull, and Frito-Lay to create promotional offers that fund the rewards. For example:
- Purchase any six 20-ounce Coke products and get a seventh for free.
- Buy two Red Bull drinks to get 3 cents off per gallon.
- Buy any King Size Oreo, Nutter Butter or Chips Ahoy to get 3 cents off per gallon.
According to Paytronix, Yesway Rewards drove 45% of loyalty members from the pump into the store. And in a 60 day period, 44% of loyalty members who made at least one visit redeemed a reward.
2. Sending mobile offers (targeting the right consumers at the right time)
Why are targeted mobile offers a profitable strategy for CPG brands?
The severity of the pandemic, and the level of recovery, continue to vary wildly throughout the country. Messages that resonate in one place or at one point in time don’t work in another.
And products in high demand in hot spots aren’t the same ones people want in locations where Covid-19 cases are plummeting.
All these mean that broad, national campaigns are going to miss the mark in a lot of places.
One beverage brand, for example, found that its TV ads were 45% less effective in two of its largest markets compared to the overall market. That’s a lot of wasted ad spend. Not to mention a lot of consumers irritated with your brand for being tone-deaf.
So what’s a national CPG brand to do? According to a recent McKinsey report, the solution lies in a more agile and targeted approach to marketing — one informed by data analytics and powered by technology.
Enter mobile coupons. They’re customizable based on geography, purchase history, store location, and time of day and especially powerful in the c-store channel, where convenience and speed are paramount.
Case in point: Acqua Panna
Take Nestle for example. They needed an efficient solution to drive trial and awareness for their new water brand, Acqua Panna. So they partnered with us at Koupon to launch a targeted, one-month mobile offer campaign across our network of 45,000 c-store locations.
We launched the campaign across retailer-owned digital channels like loyalty apps, SMS, and social media, allowing us to target a loyal and engaged c-store audience.
The campaign exceeded the brand’s objectives on all of its key metrics, including:
- Achieving 7.3% sales lift at participating retailers.
- Securing 1,000 stores of incremental distribution.
- Reaching over 1 million impressions, plus in-app and in-store signage.
3. Going contactless (making consumers feel safer)
Image credit: Consumer Goods Technology
Why is going contactless a profitable strategy for CPG brands?
Safety concerns are still front and center for many consumers. So anything you can do to make the in-store experience feel safer is going to go a long way towards driving sales.
After all, the safer people feel going into the store, the more times they’ll do it. And the more they do it, the more opportunities they have to buy your product — especially on impulse, something hard to inspire on the digital shelf.
And consumer demand for contactless services has sparked innovation across the board, giving rise to everything from curbside pickup to contactless checkout.
Case in point: Coca-Cola
Coca-Cola introduced a contactless pouring system for their Freestyle soda machines.
If you’re unfamiliar, Freestyle machines are self-serve, touch screen soda fountains featuring over 165 Coca-Cola drink products and nearly infinite flavor combinations. They’re typically located in convenience stores like Wawa and in quick service and fast-casual restaurants like Wendy’s and Five Guys.
Now, however, customers can choose and pour a Freestyle drink using any smartphone, instead of the touch screen on the soda fountain, by holding their camera up to a QR code on the machine’s display.
To reduce friction, Coca-Cola designed the Freestyle user interface to transmit to the phone without requiring the customer to download an app or sign up for anything.
Remarkably, it only took Coca-Cola a week to develop the initial contactless technology, which builds off Freestyle’s existing operating system. The program was piloted in July 2020 at select locations.
Chris Hellmann, Coca-Cola Freestyle VP and general manager, said, “All Coca-Cola beverage dispensers are safe with recommended care and cleaning. But given these uncertain times, people may prefer a touchless fountain experience.”
“It has been exciting to see our team continuing to innovate — mostly from home — to meet the evolving needs of customers and consumers,” he continued. “Our partners are doing everything they can to maintain a safe and hygienic dining environment, and we’re doing all we can to ensure they can continue to pour the beverages their guests desire on a platform they love.”
The initial pilot program was a huge success, leading Coca-Cola to partner with Amazon Web Services to expand the platform to 30,000 machines soon after. And by the end of 2020, all Freestyle machines in the U.S. were contactless.
Marketing a CPG brand? Reach more shoppers using Koupon
We get it. The c-store channel isn’t always easy to navigate — it’s large and fragmented. But with c-store sales reaching $256 billion last year alone, the growth potential for CPG brands is staggering.
Here’s how Koupon gets results for CPG brands in c-stores:
- We connect brands with retailers, using our network of over 45,000 c-store locations.
- We help brands reach and engage c-store shoppers with targeted digital promotions that drive store trips, increase basket size, and grow sales.
- We help brands secure new distribution across our network using digital promotion campaigns proven to drive product trial and awareness.
- We help simplify execution. Our team takes care of everything from selling campaigns to retailers to execution, fulfillment, and everything in between. This includes: offer sell-in, offer setup, coordination and logistics, offer distribution, authentication, fraud prevention, digital advertising support, fulfillment, and post-campaign analysis.
- We help brands make data-informed decisions by evaluating consumer patterns across products, stores, and channels. And we’ll help you use these insights to adjust and launch data-driven strategies.
The bottom line? We connect brands and retailers, helping everyone reach more customers and drive sales. Get in touch to learn more!