Every day, millions of people around the world make their way to a local convenience store. Whether it’s an impulse buy, a need to refuel or a planned stop to buy essential items during the pandemic, c-stores have become a mainstay of the consumer experience.
There’s only one problem: clutter. Currently, the average person sees 10,000 advertising messages a day, and by 2020, it’s estimated that consumers will have nearly 5,000 daily digital interactions, according to Statista. So, how can convenience retailers cut through the noise and turn their occasional shoppers into loyal customers?
According to PDI’s recently released 2020 C-Store Shopper Report, the answer is to create differentiated, personalized customer experiences through loyalty programs. And for the first time ever, the annual report—which includes responses from U.S. consumers and convenience retailers—offers a global perspective that includes non-U.S. operators across several countries.
The top priorities for Non-U.S. convenience retailers
Here’s a little secret. Non-U.S. convenience retailers have many of the same goals and challenges as their U.S. counterparts. So, what did the report tell us about non-U.S. operators?
First, non-U.S. retailers care about customer retention. Even during a pandemic, consumers have options. They know it, and so do the retailers whose doors they walk through. That’s why it’s up to retailers to provide the type of tailored experience that keeps consumers coming back to their stores.
Like any business, non-U.S. retailers also want to increase revenue and, ultimately profits, in their stores. Of course, this need is especially top-of-mind for many retailers as customers around the world begin to reacquaint themselves with normal, everyday activities like stopping at their local convenience store. To their credit, many non-U.S. retailers are already thinking about how they intend to address that challenge, with the majority of them saying they plan to implement communications, advertising or customer experience initiatives after the pandemic.
Next, non-U.S. retailers are looking for ways to increase store traffic. In recent years, the need has become more pronounced with the rise of the digital consumer. In fact, Statista expects the number of global digital buyers to be around 2.14 billion by 2021. In addition, c-stores are increasingly competing with bargain retailers like Aldi and Lidl that are willing to slash prices to attract more customers.
Four strategies for loyalty success
Our research also revealed a lag in loyalty program adoption and maturity among non-U.S. retailers. Perhaps the data that most adequately represented this divide was that nearly 20 percent fewer non-U.S. retailers said they had a loyalty program when compared to U.S. retailers. To say that leaves significant room for growth is an understatement.
For any retailer struggling with how to jumpstart a loyalty program, here are a few recommendations.
Focus on rewards
Rewarding customers for their loyalty is a great way to improve customer retention rates. Loyalty rewards tell customers that you appreciate their business, and they incentivize them to continue spending at your store. However, for the c-store loyalty member, the rewards have to be valuable. And each individual is different. This is when personalization pays off. Tailoring your promotions, offers and rewards to fit the specific needs and desires of consumers ensures you’re building lasting, powerful relationships with your customers.
Deliver differentiated, digital customer experiences
While providing valuable rewards is important, convenience retailers must go beyond that to deliver a truly connected experience that keeps customers engaged. In this regard, every part of your operational ecosystem matters, including how consumers pay and receive their goods. According to the data, 39 percent of consumers use a loyalty program's mobile app to pay for purchases. In fact, it’s the third most popular use behind redeeming and tracking rewards. Of course, the pandemic has also had an impact on the way consumers pay, likely for the foreseeable future. Around three out of ten U.S. and non-U.S. convenience retailers have seen increases in purchase and payment methods such as contactless and digital/online and curbside pickup or home delivery.
Dive into the data
Data is the backbone of your entire business, and it should be a critical part of your loyalty strategy as well. Use the data from your loyalty program to discover deeper consumer insights that can inform things like cross-brand selling and affinity promotional strategies. The result will be a better, more personalized experience for your customers and, ultimately, more revenue for you.
Find the right partner
Simply put, if you don’t have a loyalty program, it’s time to get one. For convenience retailers looking to increase customer traffic and profits, a loyalty program is one of the most effective tools they can use. But it takes work to get it right. Often, the best option is to partner with an experienced loyalty provider that can help you set up and maintain your program.
Keep in mind that loyalty should be part of a holistic strategy to provide an incredible, differentiated customer experience. That includes clean stores, well-trained staff to engage customers, and so much more. Loyalty is the outcome. It’s what you want to achieve. And you’ll get that outcome by using all the tools at your disposal to change consumer behavior in a profitable way.
Brandon Logsdon joined PDI in 2018. He oversees our Loyalty and Fuel Pricing solutions, in addition to our MarketLink and Data monetization services. Prior to PDI, Brandon served as Excentus’ President and CEO, and was the driving force behind the launch of the most successful national coalition marketing program in the U.S., the Fuel Rewards program, as well as robust loyalty solutions for the convenience retail and grocery industries. Prior to joining Excentus in 2002, he held positions at GTE Internetworking, JPMorgan Chase and others. Brandon is a board member of the North Texas chapter of the Folds of Honor foundation.