The Numbers Tell Your Story

Analyzing sales, demographic and trends data gives retailers a competitive edge.

December 18, 2020

By Sarah Hamaker

ALEXANDRIA, Va.—In any year, using numbers and other data to inform business decisions is important. But data analysis is especially critical this year, as the needle slowly moves to redefine in-store product amid a constantly changing retail landscape.

During the NACS Crack the Code “Spotlight Session: Essential Analytics for Essential Businesses,” Lori Buss Stillman, NACS vice president of research, shared how NACS provides retailers with quantitative and qualitative research solutions designed to meet the unique needs of the convenience and fuel retail industry.

The Rise of Foodservice

As the NACS State of the Industry data showed, foodservice has become a larger piece of the in-store merchandising mix. Foodservice has grown from 15% a decade or so ago to more than 20% today. “Foodservice is a really important part of the convenience store offer today,” said Stillman. “Increasingly, we’re seeing shoppers come to the store because of the foodservice offer. It becomes a great opportunity to drive new trips and convert people from outside inside, and it drives tremendous margin.”

It’s crucial for retailers to understand the role foodservice plays and the role it will play in the future convenience store model. “We have an opportunity to build bigger baskets with our foodservice offer,” Stillman said. “The relationship between foodservice items and other categories is one that we really need to dig into and understand and leverage in terms of how we build promotional offers.”

She also pointed out how the pandemic has upended previous daypart trends, providing a unique opportunity for retailers. “We can play in dayparts that historically we’ve not been able to play in,” she said, adding that lunch and dinner is often up for grabs because QSRs and other restaurants are not open or have more limited hours. “[We need to understand] what people are buying, what’s selling well and in what dayparts are we really winning [in order …] to build strategies around enforcing that and building on that for the future,” she said.

But don’t discount the morning daypart. “That is still the daypart we own, and as we see more and more retailers offering more premium beverages, like hand-crafted custom beverages, that puts us in a competitive spot,” Stillman said. “What we’re able to offer during the morning drive time, … we cannot only serve up breakfast, but if we’re smart about how we merchandise and how we talk to customers about our offers, we can get them to take that salad that they’re going to need for lunch or pick up something that they’re going to need [for a later meal] to minimize the need for another trip later in the day.”

Making Numbers Work for You

In looking at the overall numbers for the convenience sand fuel retail industry, “sales are important—we want to see what’s growing, but we also want to see sales in relation to the margins of the category,” Stillman said.

For example, retailers often cut margins in certain categories because they know it drives traffic and can help build basket size. “We want to make sure … that they really are focusing on growing the right pieces and that they understand the interaction between that category and the other categories, and the relationship between those margins,” she said.

The numbers also tell the story of change. “We’ve moved from an analog society to a digital society. People are making trip decisions much earlier in the purchase cycle than they have ever before, and that represents opportunity for us,” she said. 

She reminded retailers that they need not only great forecourt messaging on the pump but also to make sure they show up when someone looks online or through an app for items the retailer stocks. “We’ve got to think about how we leverage all of our assets, so that we’re capturing those moments when they’re top of mind or when that thought hasn’t quite emerged so that we can push it through, and they can remember they did want to stop and get X,” Stillman said.

Last Mile Delivery

Convenience retail has always been about being convenient and meeting customers where they are. “We live at the epicenter for change, and we have the ability to move left or right, up or down and capture a much broader set of the market with simple solutions,” Stillman said. “Last mile fulfillment doesn’t require you to build this massive infrastructure. There are things you can piggyback on like other carriers, other providers.”

Some questions to answer when thinking about bridging the last mile include how to eliminate the physical challenge of getting to your store, and how to give people who don’t want to unbuckle the kids in the back seat and come inside another way to access your products and services. “It opens up so much opportunity for us, but it doesn’t come without challenge,” she said.

In the fall, NACS released a study on last mile fulfillment for convenience stores. Download a free, digital copy of the NACS Last Mile Fulfillment in Convenience Retail report here.

The NACS Crack the Code Experience is available on demand for attendees through December 31, 2020.

Sarah Hamaker is a freelance writer and NACS Daily and NACS Magazine contributor based in Fairfax, Va. Visit her online at www.sarahhamakerfiction.com.

Advertisement
Advertisement
Advertisement