What type of convenience store are you? What does this mean to your shoppers and what your offer should be? ShopAbility discuss, for Convenience World Magazine.
Who your shoppers are, why they visit you and how they behave provide clues as to what your offer should be and how you should be servicing them. However, the way the industry currently looks at itself (how it divides up or segments the convenience channel) doesn’t really look at shopper needs.
Traditional convenience channel segmentations include:
- Tier 1, 2 and 3 based on store footprint and sales
- Fuel vs non fuel vs dual
- Chains vs independents, based on whether you’re owned by a supermarket, or what banner/franchise/buying group you are or aren’t part of.
All of these are numeric, structural or operational. Whilst they provide an overview of the industry, they are not helpful to you in micromarketing an individual stores because they miss the intricacies of looking at where you are located, why shoppers choose you, and who you compete with, among other indicators.
We’ve started to have a think about how this could be approached differently – to provide a shopper overlay to the numeric and structural approaches. Based on a number of shopper related indices and dynamics, we suggest there are at least 5 different channel segments. As a starting point, we’ve called these segments Locals, MiniMarts, Arterial, Transit, and Roadhouse. There may well be some others, but these will do as a start. The key principle is that your location – where you are - largely dictates who your shoppers are and why they visit.
At the bottom of this article is an outline of what these segments look like, and some opportunities for each. These are just initial thoughts, we’ll build on it over time. Note that the channel segments outlined here are currently hypothetical, yet to be quantified with research.
What does this mean for opportunities and growth?
Why use the below table or start to think about what your store type is? Understanding who your audience is and why they are there helps identify ways you can grow, and they will differ slightly by segment. Some initial ideas are:
- Local: Community based programs (like IGA does). Expand range of essential items (compete with supermarket for small baskets). Expand services offer – you’re a destination anyway!
- Minimart: Similar opportunities to Local stores – expand range of essential items and services offer where you’re the regular go-to place for local apartment dwellers. Maps, guidebooks and other travellers needs for tourist locations
- Arterial: Daypart marketing – breakfast, afternoon pick-me-up, dinner on the run/dinner essentials, based on whether you’re inbound (breakfast) or outbound (dinner). Improved food range, eg meats and sauces , for ‘dinner tonight’ shops in outbound. Facilitate less queuing (open more registers during peak periods) to drive loyalty through efficiency
- Transit: Cross category bundles – snack, drink; non-spill format beverages; books and CDs, not just magazines. Work/date night essentials – stockings, cough/cold, pain relief, condoms
- Roadhouse: Differentiate from other roadhouses – expanded food offer with a point of difference (not just fried stuff). Kids toys & games suitable for travel (including electronic).
Here’s the reference table of hypothetical channel segments:
| If you are a: |
Where they are (location) |
Shopper types |
Reasons they visit you |
How shoppers behave | Who you compete with | Typical range |
| Local | Suburban locations – minor arterial roads in specific suburbsClustered near other local shops
Tier 2/3 in size and footprint |
Local residentsSchoolkids
Some tradies Occasional truckie |
Not necessarily about fuelBread, milk and newspaper
Couple of things they’ve run out of Party/entertaining trip (ice, gas bottles etc) Other services eg trailers, rego slips … first port of call because you’re the closest to home |
Reasonably frequent, return visitsLikely to ‘know’ you, and you know them (familiar faces) | Route trade – mixed business corner stores | Essentials across most categories (not just snacks and drinks)Mechanic/auto shop |
| Minimart | Inner city and inner suburban neighbourhoodsAreas with medium to high density apartment housing
Small store footprints |
White collar professionalsTourists and backpackers | Bread, milk and newspaperSnack or treat
Things they’ve run out of Coffee |
Locals – fairly frequentTourists and backpackers – expect you to know the immediate area (ask for directions) | Route trade – mixed businessCommunity grocers like IGA | No fuel offerEssentials across core grocery categories including personal care
(Barista) coffee |
| Arterial | Inbound or outbound on heavy traffic arterial roadsOften Tier 1 or Tier 2 sites due to traffic | Cross section – relatively more Tradies & Truckies | High skew to fuelOn the way to work, school or home – snack/treat
Food to go – breakfast, dinner, some lunch Visitors coming over Morning coffee |
Quick in and outDislike queueing | Other convenience stores closer to home | Beverage and snack basedSome automotive needs
Some pet food Fewer essentials in non-food categories |
| Transit | At or adjacent train and bus stations, tram and ferry stops, airportsSmaller store footprints, sometimes kiosk like | StudentsWorking professionals | Looking for something to readKill time
Emergency purchase Beverages/snacks for journey |
Browse and hang around | NewsagentsCafes | Beverage and snack basedA few personal care items |
| Roadhouse | Major highways in regional areas away from state capital cities (but may be within 10km of – or located in- small country towns) | TravellersTruckies
‘Tree change’ commuters in areas within 200km of capital cities (eg Ballarat & Bendigo to Melb, Central Coast & Sthn Highlands to Sydney, Gold Coast to Brisbane) |
Fuel and food basedMeals (not just snacks)
Rest stop – bathrooms, break up the journey Sleep (truckies) |
Sit down meal once fuel and bathroom needs metKids run around a bit – adults looking for something for kids to do | None really … the next roadhouse (distance/time dependent)Cafes and convenience stores in small towns (if leaving the highway) | Based around eat-in foodTravellers’ needs eg tissues, maps
Automotive needs (in case of breakdown etc) Some entertainment needs – magazines, books, CDs Some souvenirs/gifts Seasonal eg swimwear and sunscreen in summer/beach, beanies and gloves in winter/ski |
Types of Convenience Stores © ShopAbility 2010
Fig 1: Convenience Store hypothetical segmentation. © ShopAbility 2010
So that’s a very general outline on some potential different convenience store types. We welcome your feedback on the types and where your store fits (or doesn’t) as we discuss the opportunities per convenience store type further in later articles.
Until then!
