C-stores are uniquely suited to set up emerging brands for success.
The c-store channel is well known for offering new items, with innovation making up 10% - 20% of a typical convenience store’s set.
Because of this, c-store is often the foundation upon which many consumer packaged goods brands are built.
So if you’re an emerging CPG brand, take a look at these seven ways to compete and win in c-store this year.
1. First, don’t forget c-store still remains a great channel for driving trial
Image credit: 7-Eleven, Brands with Heart
As you know, product trial is often the first hurdle emerging CPG brands must clear. And c-stores happen to be ideal for this. Why?
- Smaller package sizes
- Immediate consumption
- Small-format stores
First, the smaller sizes sold in c-stores make it less risky for consumers to try something new.
Lindsay Hutter, National Association of Convenience Stores (NACS) exec, puts it this way: “Someone will try a new 12-oz beverage. But they won’t try two cases of it.”
Next, you have immediate consumption. According to NACS, shoppers consume 83% of items purchased in c-store within an hour. This means that c-store shoppers are looking for items to fill an immediate need.
They don’t come in with a list and a full belly, like grocery store shoppers often do. Instead, they’re hungry, thirsty, and tired, making them much more likely to grab that new snack bar on impulse.
Finally, you have the small format of convenience stores compared to grocery stores. The average c-store, for example, is just 2,400 square feet with about 3,000 SKUs. Grocery stores, on the other hand, average 42,000 square feet and over 28,000 SKUs.
Simply put, this means consumers are far more likely to even notice your product in c-store. And as a new or emerging brand, this can make all the difference.
As 7-Eleven’s VP of Merchandising, Chris Harkness says, “7-Eleven offers emerging brands a unique opportunity to grow their business in the c-store channel. New and innovative products have an opportunity to really stand out in our small-store format. Plus, convenience customers are more likely to try a new item that is single serve, which gets a new product into more potential consumers' hands.”
2. Of course, digital coupons.
Yes, coupons are an age-old marketing strategy for driving trials of new (and even old) products. But the way coupons are being delivered and redeemed is changing rapidly. And it’s all in your favor as an emerging CPG brand.
As highlighted by the Wall Street Journal, digital coupon redemptions in the U.S. surpassed paper coupons for the first time during the second quarter of 2020.
And while this change has been a long time coming, the pandemic has certainly accelerated it. Due to health concerns, some brands and retailers actually dropped paper coupons entirely in favor of digital.
Why is this good news for emerging CPG brands? Because mobile coupons are especially well suited to the busy, on-the-go shoppers typical of the c-store industry.
Mobile coupons make it easy for customers to discover, activate, and redeem offers within seconds. And they’re easy for brands to personalize in real-time based on past purchases, location, or time of day.
Plus, mobile coupons are well-suited to new product launches. Studies show that shoppers who use digital coupons are more likely to try new products and continue buying them, purchasing 1.5 times more units than the average shopper.
For example, we recently worked with a bottled juice brand that wanted to drive trial, awareness, and sales of their new product in the c-store channel.
We helped them launch a coupon campaign across our retail partner network, including digital channels like mobile apps, social pages, SMS, email, plus in-store signage and paid media.
The campaign was a resounding success, moving an astounding 160,000 incremental units! Plus, over 17,000 c-store locations participated, driving 24 million impressions targeted at loyal c-store shoppers.
3. Use data to adjust pricing from time to time
Image credit: P2S
Price is another tried-and-true factor contributing to the success of CPG products, affecting both the quantity and velocity of sales.
And while it might seem basic, it’s hard to overstate the importance of getting your pricing right. A recent McKinsey study estimates that up to 30% of the thousands of pricing decisions companies make every year fail to deliver the best price.
Considering the abundance of data now available to brands, McKinsey posits that setting the best prices is no longer a data challenge; it’s an analysis challenge. And for those able to bring order to big data’s complexity, the returns are substantial.
In the c-store channel, having a lower price than your competitor generally increases sales. And as an emerging brand, this is especially true. So if you look at your c-store data and realize your price is higher than others in the market, it might be time for a reduction.
As Nielson points out though, many CPG companies don’t have account-level data on retailers’ pricing strategies. And without these insights, it’s difficult to determine the best pricing for your products.
4. Invest in better customer service
Back in the “old days,” the bulk of customer service fell on the retailer as opposed to the brand. Now that customers have direct access to brands via social media, however, everything has changed.
Not only do customers regularly reach out to brands, but their expectations have risen dramatically. According to HubSpot, 72% of consumers who contact a company on Twitter expect a response within an hour.
As an emerging brand, it’s even more important to get customer service right. So after taking a look at CPG companies that are crushing it, here are a few takeaways:
- Build a presence on all major social channels.
- Have a team available to respond 24/7 if at all possible.
- Use an omnichannel strategy to foster seamless connections with customers.
- Create a consistent, informal brand voice for all customer interactions.
- Be proactive by using personalization to send rewards, coupons, VIP access, etc.
- Go above and beyond to encourage brand loyalty.
To illustrate this last point, let’s look at the now-infamous customer service story of Morton’s Steakhouse.
While waiting to take off from the airport in Tampa, a customer (with 100k Twitter followers no less) jokingly asked Morton’s to deliver a Porterhouse when he landed in Newark.
Morton’s social media team picked up on the tag in real-time and decided to make it happen. They sent a local server to the Newark airport with a 24 oz. Porterhouse steak, plus shrimp, potatoes, and bread. No charge.
Image credit: Buffer
Going above and beyond especially resonates with customers during the pandemic. As the Forbes Agency Council stated in September:
“No one really knows the trajectory of COVID-19 and its full impact on consumers and CPG brands, but one thing is certain: Anticipating customer needs and delivering helpful solutions will win the day.
“Consumers need a lifeline, and those brands that can deliver with purpose-driven messaging, as well as tangible solutions that go above and beyond typical offerings, will position themselves favorably as our new normal continues to evolve.”
5. Offer free deliveries (if possible)
Image credit: CSNews
One thing we do know about the impact of COVID-19 — delivery went from being a luxury service to an essential one overnight.
In the convenience channel, relatively few stores were even offering delivery pre-pandemic (7-Eleven being a major exception). But now, the vast majority have thrown their hat in the ring, trying their best to meet the ever-changing needs of their customers.
So a great way for emerging brands to compete in the c-store channel is to promote your product along with delivery.
You can offer free delivery, for example, on any order that includes your product. Or you can send mobile coupons to c-store customers that are redeemable with a delivery order.
6. Get creative with product sampling
Image credit: Three Wishes
Product sampling and in-store events have long been stalwarts of new product campaigns. And with good reason: 73% of consumers said they were likely to buy a product after trying it. (By contrast, only 25% said the same thing about a commercial.)
And while COVID-19 may have shut down in-store sampling for the foreseeable future, there are other ways to reach your customers. You just need to get a little creative.
Drive-through sampling, for example, has been sprouting up among CPG brands and retailers. Back in April, the cereal start-up company, Three Wishes, hosted a drive-through sampling event in their driveway.
And a Walmart store in Arkansas hosted a drive-through Mother’s Day appreciation event, handing out free samples of Merci chocolate, Aveeno body wash, Aha sparkling water, and Hallmark greeting cards.
Taking it beyond drive-throughs, the snack brand Kind ran a contest to promote its new line of frozen food bars. Three winners received the new product delivered to their doorstep by trained bird, drone, or hot air balloon. (For real.)
And while perhaps not as exciting as hot air balloons, another innovative approach is to insert samples into online orders. Many brands are doing this via Instacart. You could also partner with c-stores to include samples of your product with their delivery service.
7. Take advantage of existing programs for emerging brands
The c-store channel depends on innovation to keep its inventory of consumer goods fresh and exciting. Because of this, there are several programs designed to identify and support emerging brands.
Core-Mark Curated, for example, is a recently launched program seeking out start-up/emerging brands in a variety of categories. They are specifically looking for brands that don’t yet have a presence in the convenience store market.
Core-Mark launched the program in August 2020, receiving over 100 submissions and inviting 10 brands to pitch their product.
Another major program is 7-Eleven’s Brands with Heart (also known as Sips & Snacks). Three years in the running, this program seeks to provide new and emerging brands with a springboard into the c-store channel.
Brands interested in the program need to submit an application ahead of the annual deadline, typically in the fall. If selected, you’ll be invited to participate in a two-day "show and taste" expo. Last year, out of 750 applicants, 65 were invited to the expo, and 25 were chosen to participate.
7-Eleven’s Senior VP of Merchandising and Demand, Jack Stout, says, "7-Eleven's Sips & Snacks initiative offers small businesses a rare opportunity to reach thousands — and potentially millions — of customers with their most innovative products. We are excited to help boost emerging brands' growth, development, and success by giving them the chance to test their products in a real retail environment."
C-store is often the ideal channel for emerging CPG brands. And there are many ways to tailor your marketing efforts to compete and win in c-store. Here’s a recap:
- C-store is great for driving trial
- Digital coupons as well
- Use data to adjust pricing from time to time
- Invest in better customer service
- Offer free delivery (if possible)
- Get creative with product sampling
- Take advantage of existing programs for emerging brands
Best of luck!
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