Reposted from CSP Daily News

As the industry sees uncharacteristically sluggish growth, retail behemoths like Amazon view it as a frontier ripe for disruption. And after crossing over into groceries, stores such as Walmart and Target also pose a significant threat to the 153,000 convenience stores populating the United States. With only a handful of locations, the cashierless Amazon Go stores are already shifting retailers’ mindsets—and a nationwide expansion for the tech giant’s brick-and-mortar experiment looms on the horizon.

Recent changes show that the convenience-store industry is not immune to the heightened expectations of today’s entitled consumers. So how do longstanding quick-stop retail brands reverse declining growth and prepare to compete with forces such as Amazon? Research from Fluent reveals the best place to start: their customers.

Despite changes in technology and marketing capabilities, the foundation of effective retail operations remains the same. Brands that align with customer needs have found steady growth and avoided the shopper leakage that affects even top companies. For retailers looking to prevent customer attrition and fend off the Amazon-led big-brand invasion, here are three recommendations from Fluent’s research:

Follow the Customer’s Lead

Too often, c-store brands lose shoppers by failing to establish loyalty and deliver what customers want. This simple solution is supported by research. Brands should focus on the customer, providing the essential items they need at the time they’re looking for them. While it may sound elementary, many stores come up short in this area. Fluent’s data shows that industry leaders 7-Eleven and Circle K often lose customers to competitors that better fulfill their needs.

Expecting instant results by mimicking competitors’ business models leads retailers down a troublesome path. For instance, stores such as Sears and Toys R Us struggled after making decisions that didn’t line up with customer demands. Beginning with customer analytics informs decisions that actually pay off for your company. These insights help inform strategies that allow brands to thrive and plug the gaps that are causing customer leakage. While implementing in-store tech or drone delivery (as 7-Eleven has tested) appeals to traditional companies hoping to compete with Amazon, starting small and adjusting to customer trends will likely have a stronger impact on the overall health of your brand.

Do More With Less

Recently, c-store brands have begun to focus on growth and expansion. However, using acquisitions as a growth engine frequently leads to fragmented operations, with multiple brands under one roof providing inconsistent service delivery and product assortment. While some stores have loyalty programs and appear to search for ways to uncover and respond to customer insights, others seem content to just deliver basic offers and alerts to consumers. In today’s increasingly competitive retail environment, brands can ill afford to misunderstand their customers. Acquiring new stores isn’t enough to boost companies’ market share. Improved operations start with honing their current processes; doing things wrong at a larger scale doesn’t fix the problem.

Space between top and bottom earners continues to increase, and the latter make up a hefty portion of convenience-store customers. Store brands should find ways to cater to these lower-income consumers and deliver valuable, low-cost items with their trademark convenience and immediacy. Tech-centric or mobile-phone-based programs may alienate this audience, as Amazon quickly learned. As dollar stores expand food offerings and fast-food restaurants retool value menus, convenience stores must recalibrate their approach to earn everyday customers’ attentions—and appetites—after their tank is full.

Strategically Expand Offerings

The massive resources and technology capabilities of retailers like Target and Amazon tempt convenience stores to go all-in on automated processes and tech-based services. But Fluent’s research suggests there are other, easier pathways to customer satisfaction and increased revenue. For example, all-around top performers like QuikTrip and RaceTrac pull in consistently high numbers for prepared foods, snacks and beverages. Thus, a retailer such as Cumberland Farms with more modest numbers in these categories might consider these products as promising areas for growth. Stores can tackle this challenge internally or partner with vendors to beef up these high-demand offerings.

Driven by market competition, successful convenience stores continue to innovate products and services in direct response to evolving customer preferences. For example, mobile ordering, texting, pump-side delivery and more are all taking off, complementing loyalty programs as a way to earn consistent customers. Kum & Go now provides a coffee bar, Casey’s sells healthy and gluten-free food options, and several brands offer fresh food and expanded nonfuel products in high-traffic store locations. But what works for one brand may not be successful for another. Ultimately, the road to retail success among your target audience requires a combination of data collection and merchandise testing.

Big-name retailers entering the convenience-store arena may turn heads with cutting-edge technology, but that doesn’t mean they’ll take over the market. Rather than trying to conform to the latest trend, brands should focus on improving their existing operations to impact their bottom line in a more organic and sustainable fashion. They should resist competitive pressures and the appeal of radical business shake-ups, and prioritize consumer needs. Customer-centric strategies open the door to true, long-lasting success, allowing your brand to enjoy market stability without having to innovate at a breakneck pace.


The above is a guest post for CSP Daily News by Michael D. Fisher, president of Fluent Dialog, a strategic growth business division within Fluent Inc.