Report: Growth in Convenience Stores Presents Opportunity for CPG Marketers | Street Fight

Report: Growth in Convenience Stores Presents Opportunity for CPG Marketers

Report: Growth in Convenience Stores Presents Opportunity for CPG Marketers

Amazon’s acquisition of Whole Foods and Kroger’s heavy investment in e-commerce and analytics both made headlines in 2017, but according to a new report by Koupon Media, it’s the sharp growth of the convenience industry that might have the greatest impact on grocers in coming years.

According to Koupon Media’s report, the number of convenience store locations increased .3% in 2017, even as the number of grocery locations decreased by .11%. With more than 154,000 locations, operating more than one-third of the total brick-and-mortar retail stores in the United States, convenience stores have become well positioned to survive the e-commerce takeover.

“Our team continues to be surprised by the sheer growth of the convenience industry, particularly when compared to other brick-and-mortar categories,” says Charlie Lang, executive vice president of product and marketing at Koupon. “We’re obviously excited about the growth, but I’m not sure we would have predicted these results five years ago. We can directly see the impact of c-stores’ growth in our business, both in the number of CPG brand campaigns we are [launching] and the number of retailers that continue to join the network.”

In a report that largely focuses on how a changing retail landscape and shifts in consumer shopping behaviors are making way for an increase in mobile offers, Koupon found that mobile promotions can have a big impact on sales, not just at participating retailers, but also for CPG brands.

“In the report, we mention a campaign that drove 19% year-over-year growth for a brand, and we’ve had other campaigns experience as much as 80% month-over-month growth, not to mention the fact that consumers consistently spend more and buy more products when they’re using these offers,” Lang says. “These are big numbers and indicative of the c-store mobile offer opportunity.”

This being Koupon’s fourth annual State of the Industry report, Lang has had a front-row look at the evolution of mobile offers and promotions. Although previous reports took a broader perspective, Lang says the company decided to focus more narrowly on the convenience market this year in order to take a deeper dive into the consumer behaviors and macro trends that are relevant to the market.

For example, Koupon’s report found that CPG brands are being forced to explore new ways to market products to customers as a direct result of shoppers turning from traditional supermarkets towards e-commerce and convenience retailers. Convenience stores serve more than 160 million customers a day, according to Koupon’s report, and millennial buyers account for more than one-third of those shoppers.

In order to reach those shoppers, CPG brands and grocers themselves need to reach consumers en route. Koupon found that 57% of convenience store shoppers visit between the hours of 4pm and 7pm, and 68% are stopping by on their way to or from work. Beverages influence shoppers to stop at convenience stores more than any other item. Tying beverage purchases to offers for discounts on add-ons like snacks and candy has become a particularly effective method for generating in-store sales.

If there’s one thing that Lang hopes CPG brands get from Koupon’s report, it’s that the retail landscape is changing quickly, and the convenience store category presents tremendous upside for marketers.

“Online shopping and the intersection of digital and physical retail is really the dominant force that will continue to re-shape the landscape for years to come,” he says. “That doesn’t mean brick-and-mortar retail is dead, but it certainly won’t look the same in 10 years. Koupon’s goal is to identify trends that are reshaping online-to-offline shopping and provide marketers with technology and tools to be able to reach, engage, and influence their consumers.”

Stephanie Miles is a senior editor at Street Fight.