Starbucks vs. McDonald’s: A Fair Fight for Breakfast Dollars?

By Joe Skupinsky

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“It was the best of times, it was the worst of times. It was the age of breakfast, it was the age of dicsovering if premium works better over value in a crowded industry.” How do you like my intro for “The Tale of Two Retailers”? I’m no Dickens, but I can’t help but compare McDonald’s All-Day Breakfast with Starbucks recently announced brunch test.

If you missed the latter news, Starbucks is testing a “Weekend Brunch” menu in select markets. As you may have guessed, the menu is offered only on weekends. The program began in late August in 78 Starbucks stores in the greater Portland and Seattle area. Brunch foods, including Belgian waffles, baked French toast, and quiche made from cage-free eggs, can be ordered from about 8 a.m. to 2 p.m. or until the food supply runs out.

Testing brunch is yet another way Starbucks is trying to move past its just-a-coffeehouse image. Starbucks has also experimented with selling wine and beer to attract diners during the evening hours. Recently, the company also made separate commitments to stock Megpies artisan tarts and Bantam mini stuffed bagels, which appeared on the hit TV show “Shark Tank,” across thousands of locations. What do all of these items have in common? They’re premium upsells intended not only to drive customer traffic but drive profit margins.

And then there was the McDonald’s strategy…

Can Value Still Save McDonald’s?

In late July, McDonald’s Corp. reported weaker-than-expected same-store sales growth in its second quarter. All-Day Breakfast has been credited with driving sales earlier this year, so this was a sign that the menu could be losing some momentum. Business Insider also reported on unintended consequences of the All-Day Breakfast menu and McPick 2 menu, which allows customers to choose two items for $5. According to one analyst, customers may be “exploiting” the promotions to trade down to cheaper menu items, causing average values for lunch and dinner to fall and therefore dampening overall sales growth.

It’s not just analysts being critical of McDonald’s strategy. Franchisees have expressed their disapproval in a recent survey. "I am very alarmed about the discounting push. I have never seen the corporation be so aggressive with discounts,” one franchisee wrote. “The regional marketing teams are adding numerous other discounts to the McPick 2, primarily breakfast items. They are encouraging, quite literally, everything being on sale. This is a very hard cultural adjustment for me."

What’s the solution so that discounts don’t cannibalize sales growth? According to the same analyst, McDonald’s must lower labor costs and turn to automation. We already see that happening with the gradual rollout of self-ordering kiosks with premium offerings at some McDonald’s locations. It shouldn’t be about replacing employees with machines. Rather, automation should be about freeing up current employees to do other tasks, including properly executing menu items and ensuring accuracy of orders.

The Takeaway

There are many changes happening in both the quick-service and fast-casual restaurant segments. As the industry moves forward with technology and innovation, companies will need to have a solid grasp of restaurant-level insights as they pertain to basic operations. For instance, if a fresh beef patty is introduced to more McDonald’s stores (it’s being tested), are the right sanitation protocols being followed? Are fresh ingredients stored at the right temperatures? And as McDonald’s works to expand the All-Day Breakfast menu, franchisees must remember customer service is still crucial, especially for a financially fragile company.

Zenput is a mobile software solution that creates a chain of accountability within organizations, allows senior managers to gain insights on basic store operations, and enables real-time communication to address challenges as they arise. To learn more about Zenput for restaurant operations, click here.

Topics: Restaurants

3 Reasons Why Your C-store Pricing is Wrong

By Jennifer Hoffman

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There’s a convenience store right down the street from me. The other day, I stopped in there for two personal necessities: milk for my cereal and gum for my desk at work. This store is a small mom-and-pop operation, and it became apparent to me that mom and pop also don’t believe in clearly pricing their goods. I paid about $4 for those two items, and I can’t tell you how the pricing broke down because neither shelf nor product was marked.

Sure, in a perfect retail setting, every store has clear and accurate pricing. Promotions are also accurately priced and displayed. Unfortunately, we don’t live in a perfect world.  Human error abounds and the most “cutting-edge” retailers can make pricing mistakes. If mom and pop make a pricing error, it can be chalked up to their small operation (although, I prefer “tough love” and not giving them a pass). If Whole Foods makes a pricing error across their chain, it can become a brand-damaging narrative that the media pounces on, and that’s what actually happened.

The reality is that you can’t afford not to audit your prices because there’s a good chance your prices are wrong! Here are three reasons why:

1. The human factor
Employees can miss a SKU when adjusting prices or they may accidentally overlook information about pricing changes. Employee turnover or insufficient training can also play a role here. Store managers, whether accidentally or not, may deviate from corporate pricing structure.

2. The “computer” factor
Pricing in the retailer’s information system can also be inaccurate. It could be wrong CPG data from the manufacturer or vendor. As a result, the wrong price is recorded at the store level. Important note: At some point, you have to draw the line between machine and human accountability. That’s why I put “computer” factor in quotes. Pricing isn’t static and at the end of the day, someone—preferably more than one person—needs to cross-reference the accuracy of the information in the system.

3. The promotions factor
Misplaced point-of-purchase materials, mispriced compared to competitors, lack of in-store visibility. These are all problems related to your promotions. That’s the diagnosis, but the remedy is real-time information. If you’re regularly auditing your stores and accounting for these things—and most importantly, if you can fix them in real time—you will have a competitive advantage.

Remember that your customers are only spending a couple of minutes in your convenience store. In terms of customer service, you may not have time to ask your regular customer how their kids are doing. You may not have the time to know your customer that well. But when you provide accurately priced goods that are conveniently placed and your employees are knowledgeable about promotions, you’ve just won in customer service.

So, how about checking those prices? Mom and pop would write down the SKU and flip through a book or check their computer. Meanwhile, the super competitors are scanning  a barcode for instant data. That’s where the technology is heading, and you should go with it.

Zenput is a mobile software solution that allows retailers to be proactive vs. reactive. It’s a platform where insights can be shared easily and instantly. The Zenput app also incorporates a barcode scanner for SKU verification. With Zenput, retailers gain the ability to verify promotional pricing and respond to pricing inconsistencies at the store level—all in real-time.

To learn more about Zenput’s functionality in convenience stores, click here.

Topics: C-store

What Restaurants Considering Third-Party Delivery Need to Consider

By Brian Harris

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I recently came across a post on the website of a business loan provider. They must be in the food space because their post was about increasing restaurant delivery sales. The top two suggestions the firm offered, in this order, were: Online partnerships with delivery services and ensuring quality.

But based on the results of a recent Technomic study, I would have to reverse those in order of importance. Quality earns repeat customers and new customers. Quality is how you grow your business. Quality improves with better communication, and the restaurant is ultimately responsible for quality, even if you’re using a third-party delivery service.

Third-party delivery will make mistakes, but ultimately your restaurant is still on the hook.  This isn’t just my opinion—your customers are thinking it. Technomic’s study, “On Demand Delivery: Disrupting the Future of Foodservice,” confirms that even if restaurants have a formal agreement with third-party ordering portals and delivery services, the majority of consumers (76%) hold the restaurant at least partially responsible for any errors.

“This puts operators’ brand reputation at risk each time a customer orders delivery through these services,” said Melissa Wilson, a principal at Technomic. “Even if delivery is not a current strategic initiative, operators should educate themselves about and understand the dynamics of the third-party delivery market so they can put guardrails in place to maintain quality and brand reputation.”

Other than demanding the best service from your third-party delivery service, what can a restaurant do to minimize risk? Maybe it’s a matter of moving faster in food preparation. Or maybe it’s using better packaging that improves presentation.

Maybe we need to find out where to start!

So here’s a better question: When a delivery problem is reported, and you know it’s something the restaurant could have done differently, do you have a way of addressing it at the restaurant level?

For instance, if the wrong meal arrives or a meal is prepared incorrectly, does the restaurant have the ability to respond quickly?  Delivering a replacement meal or missing item might depend on the contract you have with a third-party delivery service. But maybe you should set a standard policy to email the person who files a complaint a coupon for a free appetizer or a percentage off their next bill. The restaurant that doesn’t respond loses customers.

And although mistakes happen, that doesn’t mean restaurants should write off third-party delivery services. The fact remains that third-party services are generating additional business for casual dining restaurants and other concepts that do not offer delivery. More than a third of third-party users (34%) reported ordering from casual dining restaurants and 14% had ordered from family-style restaurants that did not offer delivery on their own.

Here are more important insights from the Technomic study:

Chains on top

Chain restaurants are almost twice as likely as independents to receive delivery orders. Two-thirds of delivery orders either placed with a restaurant (69%) or via third-party service (66%) were from a chain restaurant.

Burger-happy

One in five third-party service users ordered a burger. Pizza is still king in restaurant delivery, but the fact that 20% of restaurants are comfortable ordering items that restaurants have previously feared delivering themselves bodes well for the industry. It’s a sign that users are taking advantage of the wider variety of options available.

These findings are further evidence that restaurants have to think more critically about quality and how it translates to delivery of various menu items. Moreover, chain restaurants have an opportunity to create a set of best practices that can be shared across their network.

Zenput is a mobile solution that can help share those best practices and track compliance. It also provides a means of communicating real-time insights at the store-level. To learn more about how Zenput helps improve restaurant operations, click here.

Topics: Restaurants

Is Less Really More on Fast-Casual Restaurant Menus?

By Joe Skupinsky

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Mark Twain famously wrote, “Whenever you find yourself on the side of the majority, it is time to reform (or pause and reflect).”

In the quick-service and fast-food industries, we continue to see brands that take the approach of the simplified menu. Think of some modern, successful chains: Chipotle, Shake Shack, Five Guys Burgers and Fries. All keep their menus to a few items. Even The Organic Coup, an organic chicken chain backed by Costco, plans to nest in the Seattle market by basically offering three variations of the same menu item: the chicken sandwich.

So it’s worth noting when you find an exception to this modern unwritten rule of menu curation. Meet The Stand, a Southern California chain offering more than 40 entrees, burgers, sandwiches, hot dogs, salads, and more at each of its four locations.

“A lot of narrowly focused concepts have dumbed down their menu so much that it’s hard to get more than two people to agree to go to them sometimes unless it’s your once-a-month trip to Shake Shack or something like that,” CEO and Co-Manager Murray Wishengrad told QSR magazine. “We just felt that that strategy—although very common and certainly revered by customers and the financial marketplace—wasn’t what we wanted it to be.”

The Stand welcomes you and that friend in your group who always ruins your dinner plans with, “Eh, I just had that a couple of days ago.” They hope that customers will frequent locations multiple times per week. Rather than looking to Chipotle for inspiration, The Stand looks to The Cheesecake Factory, which has an extensive menu. The Stand is also differentiating itself from competitors by collaborating with local brewers to make custom brews. This sounds like one hoppin’ place, if you’ll pardon the beer joke.

Standing Up, Not Sitting Down

What’s your take on The Stand’s approach vs. the “less is more” approach? What does it mean for restaurant operations and growth? Only time will tell if the fast-casual segment sticks with the simple menu approach or sways back to longer menus.

Regardless, restaurants need to take a stand on menu strategy because it’s so fundamental to growth. Expanding a restaurant chain like The Stand and transferring an extensive menu to multiple locations is tough work that requires excellent communication. Offering new menu items and promotions across your locations is also an exercise in communication. That’s where Zenput can help. Learn more about our mobile solution for restaurant operations by clicking here.

See Also

Why Regularly Inspecting Your Franchise is Important
Menu Pricing Matters in Fast-Food Segment
Hidden Menus Build Customer Loyalty
Healthy Food Promotions: A ‘Must’ for Retailers
Restaurant Operations Lessons from In-N-Out Burger

Topics: Restaurants

The Rewards of Restaurant Employee Training and Culture

By Jennifer Hoffman

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When you think of the culture of your typical American casual dining restaurant, what do you think of? For a lot of people, myself included, it’s Jennifer Aniston’s character in the movie “Office Space.” If you haven’t already noticed, that’s a favorite movie for the Zenput team, simply for the fact that it holds universal truths about work environments, which we aim to improve.

There’s that scene where Aniston gets reprimanded by the restaurant manager for not wearing enough “flair”—the buttons that supposedly show her personality. According to the director, “Office Space” made TGI Fridays get rid of “flair,” because customers started making fun of the servers—the intersection of art and life!  It’s a silly idea that “flair” could improve a server’s mood or make a restaurant culture more fun. It reminds me of when a company has a “Fun Committee.” Just because you tack “fun” onto something, doesn’t mean your employees enjoy their environment.

We already know that the restaurant industry has high turnover. But it’s troubling when the latest statistics show that turnover rates have been pushing higher. An improving economy could mean more day-to-day, month-to-month operational challenges for managers.  It could also mean increased competition because consumers have more disposable income and restaurants are competing for their dollars.

Case in point in this market segment: Ruby Tuesday just announced the closure of 95 restaurants.

Managers in casual restaurants have enough to worry about lately. How can employee training and culture—the umbrella of employee engagement—improve? Can they improve to the point where turnover decreases?

Using Processes That Work

I recently read a fascinating account of Chili’s employee training procedures. This article was a genius pitch. Journalist Daniel Riley, who happens to be a former “Chilihead”, asked his former employer if he could go behind the scenes of the team that trains managers for restaurant openings. It’s a detailed account of what makes Chili’s successful today and, quite possibly, what has made this brand stand the test of time.

What I took away from the story was an affirmation of what I’ve learned at Zenput: Processes that encourage employees to think in “real time” and to think on their feet really do work. Implementing time-tested, best practices works. Following up on site to make sure best practices are being implemented also works. It all just works at Chili’s. They have a formula for success that’s just as flavorful as their Presidente margarita—and even that has a designated 25 shakes!

This is my favorite line of Riley’s article: “At Chili's, though, kids who start as dishwashers can wind up on an all-expenses-paid adventure to Malaysia because they did a simple job better than anyone else and had the right attitude about it the whole way. At Chili's, life gets bigger and better by fifteen new restaurants a year.”

And do you know the No. 1 fundamental of working at Chili’s? Everyone pay attention: It’s having fun!

Can you create an environment where people want to stay, if not for a career (like many do in Chili’s), but to return on their college breaks?

Recognizing good employee effort and rewarding that effort isn’t a new idea in this industry. But doing it in a consistent, measurable way is the true team effort—more so than an inspirational poster in the break room. Measuring the effectiveness of training can change a restaurant’s culture. And changing culture doesn’t just allow a brand to survive in a crowded market—it allows an organization to thrive.

Topics: Restaurants

Menu Pricing Matters in Fast-Food Segment

By Brian Harris

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It seems that if there’s one thing fast-food restaurants have learned in recent history, it’s to keep the menu simple and inexpensive—all while shouting your limited time offers (LTOs) and new products from the rooftop. Of course, fast-food innovation is often easier said than done and customer preferences change, as Burger King learned the hard way last year with the Halloween Whopper.You may also recall how Taco Bell went through 40 recipes before finalizing Doritos Locos Tacos. The hard work paid off in what became the most successful product launch in the brand’s history. Just as important as innovation (but sometimes not as fun to talk about) is pricing structure. The 2012 launch price of a Doritos Locos Taco was $1.29 for a regular and a $1.69 for a “Supreme.” These prices have since climbed 20 cents, respectively.

Now Taco Bell is poised to try a new item with another Millennial-favorite, cheese-covered snack: Cheetos Burrito or the “Bur-Cheeto.” The product is being introduced for $1 in an Ohio test market.

The “just-a-buck” offer has been successful in driving customers to stores. For instance, Arby’s sold 29 million sliders at the $1 price point last September. The brand began testing the sliders in April of last year in a select few markets and at a suggested retail price of $1.29, but also started offering them for just $1 during “Happy Hour” in participating markets.

Meanwhile, Del Taco has a two-tiered menu structure to drive average check growth. The menu that is based around the $1 price point also succeeds in driving traffic. Once customers are at Del Taco, they can decide whether they want to spend more on premium ingredients or LTOs. It’s a winning recipe. In the fiscal fourth quarter of 2015, Del Taco reported 6.1% growth from Q4 2014. Notably, company-owned comparable restaurant sales growth comprised check growth of 6.0%, including over 2% of menu growth, and approximately flat transactions.

So what about system-wide check growth? How did franchisees perform with menu and LTO promotion?

Perhaps you need to go beyond sales data for store-level insights—and it’s possible to do that with the right technology platform.

Digging in at the Store Level

When it comes to pricing, LTOs, and introduction of new menu items, you have the greatest control over your corporate-owned stores. You have to do some more legwork at the store level to ensure “participating locations” are not only participating, but also executing the marketing plan appropriately.

Marketing programs don’t exist in a vacuum. At an operational level, they are living, breathing and changing. Taco Bell will need to find out best practices for the “Bur-Cheeto” before rolling it out nationally. Even after an item is made available nationwide, the first few days of availability are crucial in driving sales and building awareness.

Is your restaurant network ready for the challenges of your next big promotion? Learn how Zenput provides real-time, actionable insights by clicking here.

Topics: Restaurants

Hidden Menus Build Customer Loyalty

By Joe Skupinsky

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Nostalgia, special experiences, customization—these are the hallmark qualities of hidden menus that are on the rise across the quick-service and fast-food segments, as well as c-stores. Secret or hidden menus now have a huge following on social media as Millennials love to share their “hidden treasures.”

The Secret to Building Loyalty

In the better-for-you realm, hidden menus present an opportunity to mix and match fresh items for tasty new creations. In either setting, customers are getting that personalized and customizable experience. In the fast-food realm, secret menus make the occult—and maybe the flat-out sloppy—deliciously taboo.

Face it: You’re more likely to divulge secrets over a pint of ice cream with your loyal friend. From where else could you walk in and order a “Suicide Burger” if not from your good ol’ buddy Burger King? And only at In N Out Burger are you comfortable looking a cashier in the face, and declaring, “I’ll take those fries ‘Animal Style.’”

No matter the style of food, there are opportunities to build loyalty… if your locations are on the same page.

A ‘Secret’ to Everyone but Your Employees

In order to build loyalty, your employees will have to be well-versed on your hidden menu offerings as well as your ingredients and the various menu possibilities. Good execution comes down to good training and good customer service.

Make a decision as a brand. If you’re going to offer a hidden menu, let your employees in on the secret. Perhaps change it up by season to keep customers interested and coming back for more.  Of course, auditing your locations for special offerings, along with employee knowledge and customer service, is something that can become part of your routine.

Use the hidden menu to your advantage to drive revenue, and you’ll be well on your way to becoming the next foodservice legend!

Topics: Restaurants

Why Pizza Hut’s ‘Easy Beats Better’ Philosophy Works

By Jennifer Hoffman

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One of my good friends from the Northeast recently said something that shocked me. We were at an event and ordered what many people from his area would call “fake pizza.” To him, “fake pizza” is anything produced outside of a mom-and-pop pizzeria. In other words, it’s any pizza created by a major chain. After a few bites he said, “You know, sometimes I really enjoy this kind of pizza.”

WHOA! The same guy who routinely argues about which pizzeria uses the correct amount of cheese suddenly conceded that national chain pizza can be tasty in its own right and in the right moment. In fact, customers routinely crave this kind of pizza.

That’s what Pizza Hut discovered after the chain’s “Flavor of Now” menu was reportedly flat-lining. True, more Americans are increasingly seeking out high-end, artisan foods. But they weren’t looking for that from Pizza Hut. Pizzas with a Honey Sriracha sauce, jalapeno peppers, or an Asiago crust just weren’t driving business. When it came down to it, customers didn’t want fancy pizza from Pizza Hut—they wanted faster pizza. That’s how Pizza Hut’s new philosophy became “easy beats better.”

‘Uber Pizza’

Greg Creed, the CEO of Pizza Hut parent company Yum Brands, has resolved to make Pizza Hut the Uber of national pizza chains. The brand’s focus has turned to ease of ordering and speed of delivery. After tying its loyalty program to its mobile app, Pizza Hut started reaping the rewards. As Pizza Monthly Quarterly reports, the company sold about $2 million more on Super Bowl Sunday in 2016 compared to the year prior. Tellingly, more than 60% of the online orders were placed through mobile Web browsers or through the Pizza Hut app.

Combined with the success of Pizza Hut’s $5 Flavor Menu, the brand is getting back on track in a highly competitive foodservice space. Although Pizza Hut recently reported flat same-store sales, the brand seems to be making the right strategic moves. Aside from faster delivery, it’s taking another page from Domino’s playbook by launching a social media chatbot. The platform will be available across Pizza Hut social media accounts this upcoming fall, and will enable customers to order through Facebook or Twitter.

In all fairness, you can argue that Pizza Hut is biting at the heels of Domino’s, which is seeing shares hit a record high after posting better-than-expected quarterly sales and profit. Domino’s has allowed customers to order a pizza by tweeting the pizza emoji for more than a year.

But as they enter new territory with technology, both chains have to keep something important in mind…

Physical Stores Needs to Keep Up

Pizza isn’t delivered by a little blue bird through your computer. It’s delivered by a nuts-and-bolts operation in a physical store, with kitchen employees and delivery drivers. If orders will increase with more technology, and if customers expect those orders to arrive sooner, will your stores and staff keep up? Do they have a solid command of the basics in recipe execution, ingredients inventory, and overall sanitation?

It’s the little things that are so easy to lose sight of when focusing on “big picture” initiatives. Don’t lose the forest for the trees… or the toppings for the pizza!

SEE ALSO

Wanna ‘Pizza’ Your Restaurant Competition? Customization and Technology Are Key
How to Perform a Pizza Franchise Inspection
Brand Auditing for QSRs
Pizza Delivery Vehicle Inspection Form

Topics: Restaurants

Healthy Food Promotions: A ‘Must’ for Retailers

By Brian Harris

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Across the food industry, healthy, better-for-you food promotions are becoming more than a “nice thought.” They’re becoming essential to attracting new customers and retaining current traffic. More retailers are launching promotions and reorganizing product assortments as they realize the opportunity to increase their bottom line.

Family Express of northwest Indiana is an example of one such retailer. Convenience Store Decisions recently reported on a new better-for-you initiative at this 68-store chain. For the next two months, children 12 and under who visit one of Family Express’ locations will be offered a free banana, pear or apple while their parents shop. The retailer is also working towards displaying its healthier food options to make it easier for customers to find and select healthy foods. Eventually each store will have a “Better for You” section.

Convenience store competitors are also making an effort to improve their healthy snack offerings. In June, CVS Pharmacy announced the expansion of its assortment of healthier foods and beverages to more than 2,900 stores nationwide. This includes the expansion of better-for-you snacks at checkout lanes and healthy trend zones. Raw snack foods are currently on display in the summer, and they’ll be followed by vegan options in the fall.

The CVS promotion adapts with the changing seasons and recognizes that healthy snacks are here to stay. Packaged Facts recently released data that should get every retailer fired up about this category. In the past half-decade, healthy-ingredient snacks have seen steady growth. In fact, the market’s compound annual growth rate of 4.7% has outpaced overall food and beverage sales growth. That rate is expected to jump to 5.7% between 2016 and 2020. That translates to $25.4 billion in sales by 2020.

According to Packaged Facts, snack bars are still the largest category of healthy-ingredient snacks, followed by sales of nuts and seeds. In terms of growth, meat snacks continue to be the fastest-growing category within the segment, particularly in supermarkets and convenience stores.

Retailers across different channels are getting the message: Healthy foods attract customers and the expansion can be profitable.

The public sector is also taking note as it considers ways to support retailers who want to expand access to fresh produce, particularly in urban areas. For example, Philadelphia launched the Philadelphia Healthy Corner Store Initiative to support neighborhood stores that are trying to expand healthier offerings. “The representative from the program showed me data that I could make as much money selling two tomatoes as I could soda,” one c-store owner told NACS Online. “I didn’t realize produce could have such a decent markup.”

A Checklist a Day Makes the Apples Stay

The success of healthy food initiatives is dependent on three factors:

  1. Getting the word out via promotions
  2. Product selection
  3. Execution of display

Remember: No promotion in an ever-changing retail environment falls under “set-it-and-forget-it.” If you’re going to test the effectiveness of a new healthy foods campaign, you have to mobilize your team and follow up in each store.

For instance:

  • Is promotional signage up and accurate?
  • Is there enough product available? Are products priced correctly? (Don’t make the Whole Foods pricing error!)
  • Are individual stores executing the marketing plan? (In the case of Family Express, is every age-appropriate child provided a piece of fruit? This observation can be recorded.)

Having regional or store managers account for a promotion’s various elements via a checklist is smart, intuitive, and enables you to react in real time. It could mean the difference between a promotion increasing your bottom line or failing to make a return. Tools like Zenput increase accountability and increase returns by providing real-time, actionable insights. To learn more about how this mobile solution works in the c-store environment, click here.

Topics: Retail, C-store

Today’s Forecourt: Opportunities to Convert Customers from the Pump

By Jennifer Hoffman

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Today’s convenience store forecourt offers one thing to retailers and customers alike—opportunity. For retailers, the forecourt represents the opportunity to convince customers to make an additional purchase beyond the gas pump. For customers, the modern forecourt should be an opportunity to quickly and safely make a fuel purchase while learning of a store’s promotions.

Gas station customers have 3 motivations when they arrive on your property:

  1. They have to fill up their tank. As we know from NACS, 80% of fuel sold in the U.S. is sold at a convenience store chain. Filling up could be their sole motivation.

  2. They need to fill up their tank and use the restroom. That’s a common scenario for customers traveling during the summer months and an ideal opportunity to upsell during their pit stop.
  3. They fill up their tank and purposely stop for beverages, snacks, cigarettes or perhaps even a lottery ticket. That’s a c-store retailer’s ideal customer—the customer who is already interested in entering the store.

But let’s not give up on the other two kinds of customers and let’s not take that third type for granted. The forecourt is an opportunity not only to upsell, but also to promote brand loyalty. It’s a positive experience with efficient and friendly service that makes these customers return.

In order to provide a positive experience, retailers need to create a forecourt environment that fits all three of these characteristics:

  1. Well-lit, clean and inviting. If it’s not a safe, inviting and sanitary environment, a customer might not go the extra distance to use your restroom, nevermind purchase a food product.

  2. Functional. Is your equipment working? Are the pumps and credit card terminals functional? Do you monitor for security? A security breach can damage your brand and lead customers to choose your competitor down the street.

  3. Promotional. You can have the best merchandise mix in your store and the most thorough attention to detail. But if you’re not advertising new products at your forecourt, that’s going to be a problem for moving customers into your store. The forecourt has numerous surfaces and vantage points that can be used to advertise to customers, whether on the actual gas pumps or standing signs. There is an opportunity to integrate small screens and digital signage technology into the modern forecourt as well.

Keeping Up With Trends

The convenience and fuel retailing industry has never been one that stands still, so expect more changes to the forecourt in the near future. As discussed in a recent Convenience Store Decisions article, the future of the convenience forecourt will be better lighting, more touchscreens for ordering, more drive-thrus, and more outdoor seating. We already see retailers across the nation implementing these changes.

Now is the time to start finding out what works for your brand. Implement a change—perhaps an upgrade to promotional signage—and measure the outcome. Define a set of core criteria for converting customers from the forecourt and audit your stores to make sure they’re implementing these best practices. By optimizing conversion of sales now, you’ll be better positioned to implement the design of the future when the time comes.

SEE ALSO
Converting Your Forecourt into a Moneymaker
Auditing Branded Gas Station Forecourts Can Increase Supplier Payments
How to Conduct a Property Inspection

Topics: C-store