“C-stores have an advantage when it comes to being
first to market,” said C.J. Watson, vice president of
small formats at Anheuser-Busch. “Customers look to
this channel to be on top of trends. The key to success
is to bet on the right item.”
Choosing the Right Promotion
Promotions can be driven by anything from price
and rewards programs to cause marketing or demographics, and they can vary by market. “The hottest
new energy drink may be right on a college campus
but not so popular near a retirement community,”
Promotions must also have a clear goal. This can
include moving volume, introducing an item or generating overall retail brand awareness. Promotions
must also grab shoppers’ attention without giving
away the farm, while also offering something different from competitors. “If you want to drive traffic,
you need to communicate a reason for new shoppers
to stop at your store,” Watson added.
At Salt Lake City-based Maverik, the purpose of
promotions is to generate repeat traffic. “Some retailers use lower priced fountain drinks to get people
into stores,” said Ernie Harker, executive director of
the retailer’s CREATE department. “ We don’t do that.
Price promos don’t drive enough repeat business and
you lose too much margin in a high margin category.”
Instead, Maverik ties promotions to its loyalty
card initiative and to a program in which customers receive a free fountain drink after 10 purchases.
Harker said one in four customers buys a fountain
drink. With hot beverages, shoppers can win a
Harley Davidson motorcycle by participating
in a six-month-long sweepstakes.
In keeping with its “Adventure’s First
Stop” theme, Maverik also sponsors local sporting events. One event, the Ragnar
Relay, is a 24-hour, 200-mile race. Runners,
who pay $200 to participate, receive a
Maverik loyalty card, free fountain drink
and food item.
“Runners promote our loyalty card,”
said Harker. “There’s 17,000 people pay-
ing $200 each. They sleep in vans, it’s 24
hours and there’s Maverik stores along
the course. They’re introduced to Maverik
then if they’re not already customers.”
Customer attraction strategies can also
target specific shopper groups. A retailer
don’t drive enough
repeat business and
you lose too much
margin in a high
looking to attract health-con-scious shoppers, for
example, may feature health-oriented beverages,
said Jeremy McManes, director of category management at Dr Pepper Snapple. Or, it can target moms
with orange juice coupons, a tactic successfully
employed by Shout & Sack, a single store in Vinita,
Oklahoma (see sidebar).
The Price Is Right
Unlike Maverik, most retailer promotions revolve
around price in some manner, even if they are strategic. Las Vegas-based Green Valley Grocers stages
two-for promos on everything from energy drinks
to beer. The goal is to grow the overall basket while
trading margin for volume, said David Crawford,
vice president of marketing.
Retailers must be careful about what they promote. After doing well with Rockstar energy drink
coolers at the front of store, Crawford used this
space to promote “no name” 99-cent energy drinks.
“We sold a ton of them. But we made less money
because they replaced a $1.99 item.” Now beverages promoted at the front of the store must be high
margin or a premium brand. Green Valley employs a
similar strategy with ice barrels.
Green Valley has also partnered with Coke to
install small coolers in this space. Products are
generally number one or two in their respective
category. “We justify space based on movement,”
Crawford said. The retailer uses a similar strategy
with frappucino coolers.