C-Stores: You've Come a Long Way, Baby

Increasingly, it seems, c-stores try to offer "convenience" by being a little of everything to everybody -- men and women, adults and teens. A few years back, for example, this segment redefined itself by simply adding quick-serve meals. Today, store operators are adding everything from automatic teller machines and dry cleaning services to express mail counters and pharmacies.At the nation's 95,000-plus c-stores, you can wash and gas up your car, drop off your film for developing, grocery shop, grab a cup of java, send a fax or access the Internet. Nearly 75 percent of stores have a gasoline distributorship; more than 40 percent operate a branded foodservice program. It's no wonder that c-stores are inherently crowded -- overflowing some say -- with signage and simple P-O-P.With an estimated 1,100 new stores opening annually, the channel represents "the fastest growing retail market" in the United States, according to Ted Alsprooth, publisher of Convenience Store Decisions, Bensalem, Pa.Size MattersC-stores are also expanding in terms of store footprints. "The trend is to build bigger," says Bill Mullen, vice president of operations at Spartansburg, S.C.-based Minimart. "Years ago 2,400 square feet was standard. Now it's probably 3,800 square feet to 4,400 square feet. The newest one we're building is about 5,000 square feet. As we build and remodel, we're always trying to create more space for the merchandise."Some stores are experiencing a surfeit of space for displays for the first time. "We're moving to bigger displays," says Mullen, "because we're competing with a lot of different people now. Our competitor is not just the guy across the street anymore. Now it's the Phar-Mors, the CVSs, and the Wal-Marts that sell gas."To compete, he says, "I want to get bigger and better on displays, moving them up front [where they drive] incremental sales. Instead of a little 3-foot by 3-foot display, it's a 5-foot by 5-foot or a 6-foot by 4-foot display."For the most part, however, c-stores will remain smaller than their supermarket and drugstore competitors. According to Len Allen, director of advertising and promotions for Clovis, N.M.-based Allsup's Convenience Stores Inc., "By percentage of square foot to product SKUs available, c-stores tend to be very small. A big display from a salty snack company that would be embraced at a grocery store won't be considered at a c-store. It's just way too big and the dollar that that square foot can generate with other products is too great to allow [a fancy display in] just for the sake of aesthetics. We run into this with racks for everything from insulated mugs to sunglasses to toys. The c-store's P-O-P needs are substantially different than a supermarket's needs."With space so limited, it's not surprising that retailers responding to a 1998 survey conducted by P-O-P Times reported the number one greatest weakness of manufacturer-supplied P-O-P as "inappropriateness for channel of trade" followed closely by "wrong size." Understanding that is essential to successful P-O-P placement, says Jeff Waalkes, sales communication manager for Miller Brewing Co., Milwaukee: "We've found that many c-store operators want P-O-P specifically designed for c-stores, not just smaller versions of supermarket P-O-P."In fact, c-stores often design their own signage and racks. "Our local Budweiser distributor has a $30,000 machine that produces P-O-P, they put our logo onto it and it looks like we made it," says Mullen. "We don't allow handwritten displays in our c-stores and most companies are trying to get away from that. [Manufacturer P-O-P] has been much more available in the past two or three years than it was previous to that. And they do a better job with it now. It tends to be more colorful and more professional."White Hen Pantry, Elmhurst, Ill., recently developed a display promoting its soup program. "We offer at least six varieties of soup a day," explains Tom Romanello, director of franchised operations. "This year we developed a metal easel with a laminated paper overlay and magnetic strips listing different soups. It's very easy to change them every day and it's a lot more sturdy than what we had." The display was produced by White Hens' own merchandising and sales promotion department.Last summer, White Hen launched a "Dollar More" promotion in which foam-board signs in the deli department encouraged additional purchases. An easel card at the front door "acts as a cheat sheet for clerks, reminding them to say to customers, 'For $1 more you can get your choice of either of these two items,'" says Romanello.With the average non-fuel c-store transaction amounting to just $2.78 in 1997 (according to the 1998 NACS/Convenience Store News Industry Database), incremental sales are as precious as space. "If you can add one soda to a sale, that adds almost a dollar to the total," notes Holly Roper, retail market manager for the Menomonee Falls, Wis.-based Promo Edge's Retail Research Center. "That's a 33 percent increase."Beyond SpaceBeyond space constraints, marketers designing P-O-P for c-stores face the challenges of another dimension: time. The speed of the average consumer visit discourages browsing or interaction with displays in the store. And retailers are just as speedy in their replacement of signage and temporary P-O-P. "C-stores want to rotate displays within six to nine days and be done with it," says Steve Petrillo, national sales manager for Russell Stover Candies, Kansas City, Mo."We change our window signs and inside P-O-P every week," confirms Allsup's Allen. "The entire store's signage changes. That's how we keep current."While more than 69 percent of all displays are successfully placed in c-stores (according to the 1999 P-O-P Times Trends report), "They won't necessarily stay there," says Steve Schuster, president of Milwaukee-based Schuster Marketing, makers of Blitz Mints. "That's a nasty part of the convenience business. You have a lot of young people who run these stores. When a rack is empty, they typically just throw it out. We've tried everything. We even put reorder code labels on the back of the display. But that doesn't seem to work."Recent DevelopmentsAside from gasoline, cigarettes are c-stores' biggest seller, representing almost 29 percent of the channel's sales. "Many in the industry expect that cigarette companies will be removing their fixtures from the register area to another area behind the checkout counter" in the coming months, says Hackettstown, N.J.-based M&M/Mars spokeswoman Mari Snyder. That will leave the checkout area open to new displays for candy, snack and other small-size items. In response, "M&M/Mars has developed a counter rack program to place and maintain our permanent counter rack fixtures next to the primary cash register in c-stores," she says.The candy maker is not alone. "When cigarettes come off the counter, being prepared with lots of ways for retailers to merchandise our products will be critical," says Jeff Slater, director of marketing at Goodmark Foods, Raleigh, N.C., makers of Slim Jim and Pemmican Beef Jerky. Likewise, cigarette makers are exploring new ways to merchandise their product higher up and out of reach.This year, Philip Morris USA instituted a Retail Leaders program in which the marketer provides participating retailers with fixtures and P-O-P materials designed to "let adult consumers know the store carries the product," says a spokeswoman for the New York-based manufacturer. Integral to the program is a set of "very flexible merchandising fixtures that can accommodate single packs, cartons and promotions in a way that creates category impact, whether the retailer chooses to merchandise cigarettes in a self-serve or a non-self-serve fashion."Another trend, according to Convenience Store News reports, is the expansion of larger c-store chain's grocery sections to accommodate family-size packages and full-size displays. Overall, c-stores are moving away from "insult" pricing to price points that are competitive with supermarkets. In the process, they are attracting the younger female customer.Carrying produce, a wide selection of packaged items like breakfast foods and a whole canned grocery section, Allsup's stores are an example of a c-store chain that attempts to serve as the neighborhood one-stop-shop. Still, limited real estate forces Allsup's merchants to display products "on our standard gondolas and not take advantage of opportunities to have standalone P-O-P because it's just too big to accommodate," says Alien.But more than anything, the development of pay-at-the-pump technology has rocked c-store operations. "The challenge is to make a customer -- who's just coming in to pay for gas -- pick something else up," says Minimart's Mullen. "And now with the card readers at the pump, the challenge is to get them to come in at all."Initially, pay-at-the-pump was expected to negatively impact in-store product sales. Instead, says Convenience Store Decisions' Alsprooth, "[Gas and overall] sales have gone up. You don't have the long lines of people paying for gas inside anymore. It's actually helped the process" by encouraging consumers who previously would not have taken the time to shop the store to do so now. At the same time, new ways are being devised to sell pump-and-run customers. At some stores, Alsprooth notes, "You can order a package of Fritos and a gallon of milk at the pump. While the machine pumps your gas, they bring it out to the pump, or you pick it up at a drive-up window."The pump is the one place in c-stores where consumers are a captive audience, standing idly for up to three minutes while filling their tanks. Traditional pump toppers are being supplemented with electronic advertising, promoting current sales and stimulating impulse purchases. M&M/Mars uses more signage "outside of the store to attract consumers into the store for a higher register ring," says Snyder. Last year, Gillette unveiled asphalt graphics --white, spray-on stencils -- to promote the Mach3 razor."We see a lot more pieces of P-O-S at the pump," concurs John Mellein, marketing and sales director for the Minnesota State Lottery, Roseville, Minn. "Pay-at-the-pump is an issue for lotteries because if the customer doesn't come inside, we have lost a sale. There are lotteries now that are advertising on pump handles."Houston-based Alvern Inc. markets "FillBoards" hand-held outdoor advertising, a plastic helmet-like device that fits over the fuel nozzle and holds a 4-inch by 5-inch waterproof graphic card. Since its U.S. introduction in 1997, the point-of-sale billboard has been utilized by such brands as American Express, Dr Pepper and Nestle.Other entrepreneurs supply automated screens on top of the pumps that let customers order products from inside the store and pay for them along with their gasoline. According to Convenience Store News, c-store operators are beginning to experiment with high-tech P-O-P as well, including satellite-fed videos at the pump.Satisfying the CustomerWhat do c-stores want in terms of P-O-P? "C-stores want convenience and ease of placement," says Promo Edge's Roper. "They get a lot of the same stuff as other channels, but it doesn't work as well for them. Marketers will do best with smaller sizes and durable, dynamic pieces to attract quick attention."According to P-O-P Times' 1999 Trends report, c-store respondents favor floor displays, translites for menu-boards, case stackers and shelf organizers. Least liked are coupon dispensers, electric signage, sidekicks, pallet displays and floor graphics. Flexibility and variety are the keys to P-O-P success in c-stores, say marketers. "If you're going to do a floor display, offer the flexibility of having that be a wing unit you can hang from gondola shelving," says Russell Stover's Petrillo. "We want to be able to hang that power pack on an endcap. Things that are convertible save us money and give retailers more options."That strategy has long worked for Blitz PowerMints. The brand's most popular shipper features two 2-foot-high Blitz package replicas standing back to back. "Once they sell through the product, the [replica] bottles can be used as power wings or on the counter," says Schuster.Individual store managers can increasingly choose what works for them from a list of corporate-approved materials, so marketers who offer the most variety have the best chances of meeting a range of needs. In March, Miller Brewing introduced to its distributor network a new c-store merchandising guide containing hundreds of new P-O-P items developed specifically for c-stores. These materials should begin showing up in stores in the spring. The key to Miller's successful P-O-P placements (besides the fact that beer is the number one selling beverage in c-stores) could well be the fact that it covers all its bases. "We have items for every area of the store," says Waalkes: "metal curb signs, curb stickers, corrugated pole signs and string pennants, lots of branded pricing signs, branded open/closed signs, see-through window and cooler signs and beer bottle cooler door handles and static clings, including a 6-foot by 3-foot static cling that covers the entire door." Another new unit for outside is a "faux display," a vacuum-formed plastic cube that, when seen from the road, looks like a mass stacking of 12-packs of Miller cans. It is "out in the open" but impervious to weather and theft.The Minnesota Lottery follows a similar saturation philosophy. "Basically, there's been a piece [of P-O-P] designed for every area that a consumer can see," says Mellein. "We have signage on the reader board, at the gas pumps, on the window, the door, floorstands, danglers. We have our product in 12 bins. We have non-permanent P-O-S and brochures around the register and in a lot of cases we have clerks wearing buttons and brand-identified lottery information."Janice Chopra, a spokeswoman for Quaker Oats Co., Chicago, says the key to producing successful P-O-P merchandising for c-stores is to be functional. "We choose function rather than style in our merchandising efforts [for Gatorade Thirst Quencher]. We really strive to use P-O-P materials that are beneficial to the retailer. A perfect example of this is our development of improved cooler door equipment."Going for the ColdFor beverages, the second bestseller in c-stores, the battle is on for cold space. "The c-store is a critically important channel to our business, with dollar volume equal to our grocery business and growing," says Chopra. "The biggest issue we face is securing enough cold inventory in the store." Quaker Oats supports Gatorade products like its new Fierce sub-line, which launched in January at the point-of-sale with static clings, shelf wobblers and cooler extenders -- a popular solution to the cold crunch. "We're in year three of our rollout using new equipment to hold our products in the cooler door. This has been a continuous effort on our part to invest more dollars in our P-O-S and racks to address the out-of-stock problems that our retailers face," says Chopra. "The two systems are called Nektrackers and UltraGlides and they increase the amount of product that can be shelved in the cooler door by 15 percent to 35 percent."Michael Neuwirth, corporate communications director at Great Brands, Stamford, Conn., marketers of Evian and Dannon natural spring waters, has the same problem. "Bottled water is often an impulse sale and almost exclusively a cold sale, so the challenge in c-stores is space." To address this need, Neuwirth says, "last year we introduced Hi-Vis racks that effectively extend shelves in cold boxes and deli coolers via suction cups affixed to the glass doors."According to Jim Page, vice president of marketing at Franklin Park, Ill.-based Dean Foods, "Our priorities are to have visibility in the cold door, off-shelf placement where we can keep the product cold, and to look for partners that make great tie-ins such as snacks and sweet goods."As services expand, the idea of a "typical" c-store customer fades, but one thing remains constant: everyone is shopping to fill an immediate need. "Impulse buying is what it's all about in c-stores," says Page. "The key for us with flavored milks and milk is to be available and merchandised properly, especially when consumers are buying a beverage for companion foods."Last fall, the company ran a "very good promotion with a major chain" that partnered Milk Chugs with the store's deli lunch program. "Milk was one of the beverages that you could choose when you ordered chips and a sandwich," he says.Controlling the MessageDairy Mart Convenience Stores is actively involved in self-examination according to Jay Ross, vice president marketing and merchandising at the Hudson, Ohio-based chain: "We're trying to answer the question, 'How do we communicate effectively with the customer within and around our stores?' That's new for us as a company, and I think it's new for us as an industry."For the past two years the company has worked on repositioning itself and improving its merchandise presentation. "We're focusing a lot of energy on re-branding the company and on new stores. We realize that the store environment is part of our brand and needs to be valued better." Earlier this year, Dairy Mart hired a director of advertising who will be responsible for "the hierarchy of our signage" as well as off-premise customer communication.At White Hen Pantry, marketers plan the chain's merchandising programs a full year in advance. "It all goes through our merchandising department for approval," says Romanello. "We plan one major focus each month and displays change on a weekly basis. We try to keep a rainbow of colors and styles out of stores ... because it tends to be overwhelming. Over the years we've developed a strong position on the signage we want, and we've developed mutually beneficial agreements with companies like Philip Morris [in order] to keep the store from getting all junked up. You have to promote cigarettes because the price is rising all the time."Minimart stores also undergo "wholesale re-merchandising of the stores" annually, according to Mullen. "We physically relocate gondolas to make more space in the store and to keep it interesting. Right now we're putting more merchandise in and developing better display areas for multipacks."At Exxon Company USA, Houston, the goal of P-O-P is to convey to consumers "that we have it and it is something you should buy," says Jim Mixter, convenience products manager. At the same time, however, "we want to avoid the clutter trap. We've made a significant investment in interior graphics at our new Tigermarkets, so we're not going to hang a lot of [manufacturer-supplied P-O-P] from the ceiling." Mixter likes static clings, shelf danglers, miniature shelf outcroppings and floor graphics --as long as they are easy to remove.

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