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Making Social Networking Work for You

We’ve been reporting a lot lately about convenience retailers tapping into the popularity and reach of social networking sites, such as Twitter and Facebook, to try and drum up more business. Among the best ideas, in my opinion, is Kum & Go’s launch of "Twitter Tuesdays." Last month, the c-store chain each Tuesday selected one Des Moines-area Kum & Go location as the "Secret Store." From 8 a.m. to 12 p.m., one clue per hour was given out via Twitter “tweets” to direct Kum & Go followers to the secret store.

The first eight people who found Kum & Go’s 1959 Ford at the secret store and provided the person in the car with the secret password each won a set of two-day passes to the 80/35 Music Festival in

Des Moines

. Kum & Go was one of the major sponsors. On June 23, the final Twitter Tuesday, the first four people who found the 1959 Ford at the secret store and provided the secret password won VIP passes to the 80/35 festival.

Talk about a fun and effective way of engaging customers!

Kum & Go’s Twitter Tuesdays is a great example of how to make social networking work for you. It’s not enough just to have a presence on sites such as Facebook, MySpace, Twitter and Linked In. You have to find unique and fun ways to connect.

After all, a new study by WorkPlace Media polled office Internet users and found while 55 percent of respondents maintained at least one social networking account, just 12 percent of respondents said their opinion of a brand changes if that brand maintains a social networking presence. And only 11 percent of the social networking users reported following any major brand through a social networking site.

The bottom line: Social networking works best when you think outside the box.

What are you doing to tap into the power of social networking?

--Linda Lisanti

 

Long on Loyalty

According to a recent Colloquy study, since 2007 participation in loyalty programs rose by 19 percent in the United States. Retailers saw the greatest shift toward rewards programs with 75 percent of consumers reporting the recessionary economy had a neutral or positive influence on their participation. (The smallest increase was experienced in the financial services segment, where 52 percent of participants said the economy had no impact on their enrollment decision.)

"U.S. consumers clearly see value in program participation, and continue to leverage their activity as an antidote to hard times — seeking added value and using rewards to stretch dollars," said Rick Ferguson, Colloquy’s editorial director, when the survey results were released last week.

A quick check of my key chain and wallet shows I'm a member of these loyalty progams: Stop N Shop, CVS, Borders, Cosi, Delia's and American Eagle; the last two for my teenage daughter. Stop N Shop, Borders and CVS get the most workout, because they offer the best, most immediate rewards and are more part of my daily habit. I also hear from these retailers the most via e-mail (a few times a week from Borders), snail mail (special mailings from Stop N Shop and CVS), and receipt (instant rewards from Borders and CVS.)

One of the most successful c-store loyalty rewards programs I've seen is operated by Q Marts, of Sheboygan, Wis. (See "Q Mart Reward Program Pays Off" on www.csnews.com.) With only 20 stores, the chain has more than 67,000 members, in a marketplace of approximately 500,000 people. More impressive, the card members actually use the cards and engage in the chain's many vendor-supported offers.

A recent analysis of the chain's business showed Q Mart Rewards members made more than 20 percent of in-store transactions and more than 24 percent of fuel gallon purchases, spending an average of nearly $50 in the store per month and buying 30.24 gallons during that time.

Much like Stop N Shop, Borders and CVS, the chain focuses on the loyalty program in all of its marketing materials -- via Outsite Networks technology at the store, in radio and cable TV ads and in print. The program offers a mix of benefits: discounts; buy-one or buy-some, get one free; and instant rewards.

Now is the time, it seems, for savvy retailers to be leveraging their loyalty programs, which, in the case of Q Marts, at least, is actually building loyalty, rather than simply attracting customers looking to cherry-pick specials.

-- Barbara Grondin Francella

Snuff: A Retro Tobacco Product Making a Comeback

As tobacco use restrictions get stricter, consumers are looking for new ways to get a nicotine fix, and the popularity of some items, including inhaled snuff, is rising. mhtwrnyqp4

It's fairly common knowledge throughout the convenience store industry that as anti-smoking laws become commonplace, smokers will seek other ways to scratch their itch for nicotine.

At CSNews Tobacco Roundtable, held in May concurrently with the Tobacco Plus Expo, attendees named the many products they see smokes trying out -- snus and other pouch products were deemed entry-points, while moist snuff was not far behind.

These products are not the only ones available for tobacco consumers to use when satiating their addiction. According to a report in Wired magazine, dry snuff -- made from tobacco leaves that have been ground into a fine powder -- s making a resurgence as a new generation of hipsters trade lungs full of smoke for a nose full of snuff.

Modern snuff comes in a variety of flavors, and is used by sniffing the product quickly into the nostrils, where it produces a burn — and a nicotine buzz, the report stated. According to a Federal Trade Commission report cited by the magazine, roughly 20 million individual packages of dry snuff were sold in the U.S. in 2005.

“For most, snuff is an alternative to smoking,” Alexander Schardt, a snuff lover from Hamburg, Germany, who runs the popular Snuffhouse.org discussion board, said in the report. “People recognize cigarette smoking is unhealthy, and you can’t do it at work or a lot of other places.”

Snuff is also cheaper than cigarettes. Dry snuff costs between $2 and $5 for a pocket-size container of about seven grams, and one tin can last a regular user several weeks, according to the report.

Innovative retailers looking for the next trend may see opportunity in this niche tobacco product, especially in an environment where smokers find themselves increasingly ostracized for their habit in public places.

What do you think?

-- Mehgan Belanger

Has New Beverage Product Proliferation Gone too Far?

The packaged beverage category may be one of the most innovative in convenience stores. In it, there's the explosion of several new segments, including energy drinks and shots, flavored and functional water, private label products, enhanced beverages, ready-to-drink teas and more.

As this category continues to grow, it is inevitable that there will be some new product success stories, and some that -- despite significant market research and hefty promotional budgets -- fall flat. And then there's the small beverage companies that are vying for space in the cooler, and those that offer some interesting, if not unusual items -- remember the energy drink Cocaine? And there was the equally offensive "Green Card" energy drink; the anti-energy relaxation beverages Malava Relax and drank; and many, many more.

And as the editor at CSNews who handles new product submissions and write-ups, I get bombarded with e-mails marketing the newest innovations for consumer packaged goods products that can be sold in the convenience store industry. So when a new product e-mail came across my inbox for something called MeatWater, I didn't immediately discard it.

The so-called product is called MeatWater, with the tagline "High Efficiency Survival Beverage," and is supposedly made by Liquid Innovation. It comes in bottles that look remarkably like VitaminWater. The press release I was sent included this promotional text for a new line called Wings:

"This is Liquid Innovation’s rapid response to the growing demand for convenient finger-food lifestyle replacement on the go.You’ll fly higher after one sip, and no need for wetnaps after you're done. Just recycle the bottle!"

Flavors for the product included BBQ Wings, Buffalo Wings and Pigs with Wings. The Web site for the product is DinnerInABottle.com, where visitors can explore the other MeatWater flavors, including Beef Jerky, Dirty Hot Dog and Peking Duck, among many others.

The Web site even states: "By drinking Meatwater you can cut down on exercising and eating time, and have more time to enjoy yourself."

Thankfully, it wasn't a virus-laden message, but I was surprised that, in the face of all these increasingly diverse packaged beverage introductions, I had to research the product to make sure it wasn't a fake. Which it was -- and that's a good thing, because I can't imagine that meat-flavored beverages would be very appetizing.

But you never know -- imagine how successful a meat snack/MeatWater cross-promotion could be?

-- Mehgan Belanger

Will Consumers Come Out for 4th of July?

More Americans are planning celebrations this July 4, even as they deal with the recession and recent increases in gasoline retails have caused many to curtail travel, according to the National Retail Federation’s 2009 Independence Day Consumer Intentions and Actions Survey.

With the holiday falling on a Saturday, 144 million people are expected to the July 4 holiday this year by attending or hosting a cookout, barbecue or picnic. (62.6 percent of those surveyed, compared to 61.2 percent last year.) That could be good news for c-store operators, many of whom have suffered through the wettest spring in recent memory.

After 18 days of rain out of the last 22 here in the NYC area, I'm more than ready to fill a few coolers with ice, soda, beer and wine and position my husband in front of the grill as family and friends gather.

But c-store have opportunities outside the ice cooler too. According to NRF's  survey, 14 percent of consumers plan to purchase merchandise this month. I've already impulse-purchased a themed T-shirt for my preschooler and glow sticks to take to the fireworks.

Also, Monday's news that gas prices have apparently peaked may put a few more drivers on the road.

When the survey of more than 8,600 people was taken in early June, the recent uptick in gas prices had caused 44.5 percent of respondents to change their Independence Day plans.

A little sun could finally put people in the mood to move -- and spend.

-- Barbara Grondin Francella

Will Fuel of the Future Come from Used Diapers or Cow Emissions?

Convenience and petroleum retailers are probably tired of hearing about how new fuel sources – from biofuels to hydrogen gas – will power motor vehicles in the years ahead. The fact is that fossil fuels will likely remain the dominant energy source for both the mid- and long-term future.

For a little fun, though, check out this entry from the Driving Directions blog (http://green.yahoo.com/blog/daily_green_driving/35/the-seven-weirdest-car-fuels.html) that suggests cars of the future could be powered by such alternative materials as chocolate, coffee grounds, used diapers, turkey guts, Styrofoam cups, sawdust, woodchips or nuts.

The article claims that scientists have figured out how to make diesel fuel from disposable diapers and a company in Canada is building a pilot plant in Quebec to process the plastics, resins, fibers and poop into a mix of gas, oil and char.

Maybe more nauseating was the suggestion that using methane gas from cows (it apparently comes out from both ends, who knew?) could be used to generate electricity. “Cow power” is apparently already being sold to a college in Vermont.

Which just reminds me of a joke from one of my favorite comedians, Ron White (of the Blue Collar Comedy Tour fame).

White says he asked a friend, “Why are you a vegetarian?” And the friend replied that it wasn’t even because meat is bad for you. He told White that raising cattle was bad for the planet – with cow flatulence in the ozone and the cleaning of land for the raising of cattle. Then, he asked White: “What are you doing to help the environment?”

Replied White: “I’m eating the cow.”

Perfect!

-- Don Longo, Editor-in-Chief

Can You Hear Your Customers Now?

According to a recent study, companies who are growing during this recession are focusing on customer feedback and making changes accordingly, while those who are ignoring feedback are losing ground fast.

"The ROI on Customer Feedback: Why it Pays to Listen to the Voice of the Customer," categorized organizations based on their use of customer feedback in relation customer problem resolution, customer satisfaction, customer retention and customer advocacy. Companies were then divided into “best-in-class,” “industry average” and “laggard” categories based on the analysis.  

Best-in-class companies, who are twice as likely as the other companies to have an established process to track customer feedback across all departments, were 18 times more likely to increase customer satisfaction and 44.5 times more likely to increase customer retention, according to a study of 150 companies by Empathica, a provider of customer experience management programs, and Aberdeen Group.

Another finding: Best-in-class companies were 2.3 times more likely than laggards to have improved their year-over-year performance in new product/service innovation with the deployment of a customer
feedback solution.

“By putting in place the right technologies, organizational resources, business processes and performance metrics, organizations can leverage customer satisfaction to grow and succeed during these difficult times," said Aberdeen Group's Jeff Zabin.

That may sound complicated and costly. But in the c-store environment listening and acting don't have to difficult or expensive. The c-store industry is extremely well-positioned to do all of the things those best-in-class companies do: proactively inform customers of how their complaints and suggestions have been or will be acted upon,  hire for positions that have "customer feedback" in the job description, analyze and segment customer feedback data to create actionable insights.

It doesn't take expensive technology to dedicate someone at headquarters to answer customer emails or encourage managers to get back to regular customers about a complaint or suggestion made to front-line employees and then passing those concerns up the line. The opportunities to gather customer feedback and act on it are endless in a retail store.

In his "Bird's Eye View" blog on the chain's Web site, Wawa's CEO Howard Stoeckel addresses everything from the stores' "same price, cash or credit" policy for gasoline purchases to COO David Johnston's performing the meringue. A one-store operator recently told me he empowers store employees to act on customer concerns or complaints with the ability to spend $15 on the spot to do that.

Large chain or independent, responding to customers' concerns and vigorous two-way communication can make a huge difference to customer loyalty and retention, as well as, I believe, employee satisfaction.

 -- Barb Grondin Francella

Starbucks Fans Heading to McDonald’s, but This Editor Doesn’t Know Why

A Morgan Stanley & Co. survey of about 2,500 coffee-drinking consumers -- conducted roughly three weeks after McDonald’s May launch of national advertising promoting its McCafe offerings -- found that nearly half of Starbucks heavy users said they also buy coffee at McDonald’s at least once per week. About 56 percent of Starbucks heavy users said they buy coffee from McDonald’s “regularly,” up from 51 percent who gave the same response in a similar survey last August.

Those who are hitting Starbucks less frequently are citing economic reasons. About 31 percent said they are looking for cheaper alternatives, while others, including more than one-third of heavy users, said they were ordering smaller and less expensive items.

Still, the survey found that McDonald’s leads in terms of value and convenience, while Starbucks wins in regards to taste and as “the favorite place” to buy coffee.

Yesterday, I decided to give McDonald’s McCafe a try – and boy, was I sorry I did.

My medium iced, nonfat caramel latte tasted nothing like caramel, but a lot like blueberry – and not good blueberry, I should add. Aside from the poor flavor, the price at $3.89 was just a penny less than what I usually pay at Starbucks, so tell me where is the value?

My McCafe experience was definitely bad news for my taste buds, but I think it’s good news for all you convenience retailers out there. In my opinion, unless McDonald’s improves its McCafe offering, your coffee customers are likely to stay put.

Have you tried McCafe? If so, I’d love to hear your thoughts.

-- Linda Lisanti

Best-seller at the Register?

An interesting article came out of the Wall Street Journal recently about several cashiers who have turned their experiences ringing up customers' purchases into best-selling books.

In "99 Faces in One Day," supermarket cashier Carmela Narcisi, of Neuss, Germany, recalls when she told a customer the bananas he was purchasing were overripe.

"Don't worry about it," the man replied. "They're just for my mother-in-law."

Other stories include shoppers pulling money from their socks, strangers confiding about the death of a spouse and irate customers intent on qualifying for the express lane, the Journal reported.

Narcisi's goal was to make readers laugh and to hold up a mirror to some customers.

"People behave as if they are in their own living room," she told the newspaper. "Outsiders can't imagine what we cashiers have to go through sometimes."

Another cashier memoir by Anna Sam called "The Tribulations of a Cashier" became a best seller in France and Germany, and has sold 160,000 copies along with the rights for translations into 16 languages, according to the report, which cited the publisher.

And a German flower-shop employee penned "Customer Rage," while a U.S. cashier from Kansas published two slim books called "Letters From Your Friendly Cashier." In it, her sarcastic notes include titles such as: "To the lady who spent $104 on pet food," according to the report.

"I wrote them almost as a way to deal with these people," the author, Carrie Evans, told the Journal. "It's a funny way of self-therapy."

Cash-Strapped Consumers Go for Value Brands -- and Premium Buys

At a time Americans are picking up more value brands to save money, some also are increasing their purchases of premium brands -- while few are enraptured with mid-tier products, according to a study by IRI.

 As "The Value/Premium Dichotomy" reveals, in dollar sales, value brands are growing rapidly, as expected.  But mid-tier brands lag in dollar sales as  premium brands are picking up steam.

"Several shopper trends have converged to create this dichotomy,"  said Thom Blischok, president of IRI Consulting and Innovation.  "The most obvious trend is the move to trade down. Shoppers have moved away from their traditional brands to value brands, including both retailers’ private brands as well as economy brands from national brand manufacturers."

But shoppers are also focused on premium brands, through what IRI has dubbed "sophisticated splurging." Shoppers are holding onto the premium brands they crave but are purchasing them at value stores.

Of the top 10 items where brand preference beats out price as the most important decision influencer, c-store favorite chocolate candy is number one. Cookies and ice cream also make the list.

At the same time, retailers have dramatically increased the sophistication of their private brand lines, offering high-end, premium private label products at lower cost versus premium national brands, the report noted.

Shoppers’ concerns about health and wellness are also driving the spike in premium brand sales. For example, while bottled water unit sales decreased 3 percent during the last year, premium bottled water unit sales jumped 11 percent. Similarly, yogurt sales were essentially flat during the last year, while premium yogurt sales grew 34 percent.

What does this mean for c-store operators, who built the industry on a small group of national brands, but who have been trying to differentiate themselves for decades? My guess: Customers are looking for specific brands and experiences even in the emergency fill-in or impulse categories. Plus, a lower-priced option may not always be the most popular, even during this recession.

Lesson two, as Blischok pointed out:  "Shoppers often act in unpredictable ways, and that the results of one action, such as dining out less, often has repercussions in other CPG segments."

 -- Barb Grondin Francella