If you’ve walked into a new convenience store recently, you may have noticed that the environment is light and airy, and the food is different; there are grab-and-go options, and maybe even a fast-serve chef ready to make a breakfast burrito or carryout panini. This is a reflection of consumer trends that demonstrate how time constraints are driving them to look for convenience. As a result, convenience stores are popping up everywhere. But they’re not the convenience stores of years gone by. Consumers are seeking a variety of products, including at premium price points, that can meet their needs.
Mark Walker, VP of Brand and Category Management at Aramark, has been following consumer trends and developing convenience store offerings for almost 20 years, back when it was difficult to keep disposable cameras in stock. He gives his insights below on finding success in the world of convenience store offerings.
Trends Driven by Consumer Lifestyle
If there’s one rule for running successful convenience store operations, it’s that the trends are always changing, which are driven by changing consumer lifestyles. Today’s consumers are looking for quality products served with speed and convenience. We have found the trends are near universal. While the specific product offerings may change depending on location, the core drivers are the same.
Walker gives the example of the fast-paced world of healthcare, “even if there’s just two people in line at the salad bar, a nurse is in such a hurry that he or she will go straight to the grab-and-go cooler and get a pre-made salad or sandwich because there literally aren’t an extra 30 seconds they can wait,” Walker says, “the overall trend is where folks are eating. They may need to just pick up a healthy bar from one of our locations to eat as they walk from one meeting to another.”
An Aramark P.O.D. store, or Provisions On Demand, showcases healthy snacks and a large selection of grab n’ go options that serve customers across multiple dayparts.
On top of wanting speed, consumers are looking to eat more often. There has been a shift away from eating three meals a day to eating five to eight smaller meals. As Walker puts it, “people are more or less grazing throughout the day rather than eating three traditional meals.”
Many locations are adding a convenience store offering to meet that always on demand to supplement café offerings. Walker’s team decides which are the best items to offer, consulting the list of top selling items and consumer trends, and puts them into a smaller footprint that takes fewer resources to operate and satisfies consumer needs.
The Art of Premiumization
Premium isn’t typically an adjective that comes to mind when thinking of the options traditionally available in a convenience store. To many, convenience stores of the past held a specific vibe. “At Aramark, we've always had a really different selection than you would have in a typical convenience store, including more premium options,” says Walker.
Across many higher education convenience store locations, we provide freshly-prepared sushi. Students are increasingly using convenience stores for regular meals on campus.
It’s important to have a balance of healthy and indulgent options. Rather than having a section of healthier or premium options, those items are integrated with all the other items. According to Walker, this strategy is working well, “we've found that the premium items are doing tremendously well in addition to the more traditional offerings. People will still have that bag of chips, but they also want gourmet popcorn sometimes. It's really fascinating to see what is happening with the consumer right now. People want what they want, when they want it.”
The Right Products to Meet Consumer Needs
The consumer is even more hurried today than they were even 5 years ago. This impacts not only how we merchandise our stores, but the type of products that we sell. Second to convenience is variety in the products you’re offering – in everything from food and beverage to consumer goods and electronics. “Consumers are looking for multiple options while on the run – that could be a quick snack or sandwich, or they might need little things like cell phone chargers and electronic accessories.” Walker says, “you're not going to have a successful store if you don't have the right products in it. There's a balancing act.”
Walker explains that convenience stores are broken up into categories of products that work together to meet consumer demand. “Introducing a different category can drive so much more interest than adding products to existing categories because what happens is cannibalization within categories. A consumer likely isn’t going to buy two things from the same category, but they could potentially purchase items from different categories,” explains Walker. If someone comes in for an energy bar, they may also pick up a phone charger, but they’re probably not going to get multiple types of energy bars.
Walker gives the example of selling longboards (an elongated skateboard) on college campuses. “When the classes break, there's hundreds and hundreds of students on their longboards around campus going to their next class,” says Walker. “We went years without selling skateboards inside a store, but once we introduced that category offering, it did quite well. Now, we sell tons of longboards.” Similarly, in healthcare, we started selling doctors and nurses apparel and offering high-end gifts for visitors of the hospital looking for something special for a family member or friend. “We work to stay on top of what the consumers want in every category, for all products,” says Walker.
Staying Audience-Centric in Design
We work with each client to design a customized convenience store offering in each location to meet specific audience demands. It starts with designing the physical space, while taking into account the types of products the consumer at that location is looking for. Our teams have designed modular units that they can scale to meet space requirements and needs. They deliver grocery-sized stores all the way down to small mini markets with several options for food and beverage with a kiosk for checkout.
In Higher Education, a survey by YPulse found that nearly 79% of college students purchase food at on-campus convenience stores as opposed to 22% in 2010. From snacks, to grab-and-go meals, to freshly prepared sushi, to laundry detergent and cosmetics, college students are gravitating to convenience stores more and more. To meet this need, we put in additional stores on campuses. “We're opening our fourteenth store at one university. Not only have we knocked down walls and made some of those stores larger, but they recognize they have students all over the place that need to be served multiple times a day with a great variety of items and selections,” says Walker. His team has found the stores are meeting the students’ needs while also proving to be very profitable from a business standpoint.
Store placement is another important factor to take into consideration. “Out of sight, out of mind” is becoming more and more of a challenge. Walker notes, “back when I started, we used to draw on a map five and ten-minute walking radiuses. Today, we literally need to be in the pathway of the consumer as they’re walking from point A to point B.” This is particularly important in a world where people are always looking down at their phones.
Innovating to Stay Fresh
Walker’s team does a lot to innovate and stay ahead of consumer trends. In partnership with our Global Supply Chain team, his group developed a “Shark Tank” style concept to provide local companies looking to expand their sales the opportunity to pitch their product to us. If the company meets certain criteria, there’s a chance they could find their products in our convenience stores the following week. We track the sales data and decide within three months whether to continue carrying the product or not. It’s a win-win situation for both Aramark and the small businesses and potential partners who participate. According to Walker, an estimated 25% of companies are awarded a highly competitive ongoing contract. Success stories like start-up Awake Chocolate, a chocolate bar with added caffeine, can now be found on many of our convenience store shelves across healthcare, higher education and business dining.
Awake Chocolate company participated in Aramark’s “Shark Tank” program and is now carried in our convenience stores across the country.
By following the trends, collecting our own market research and consumer sales data, and taking calculated risks, we have been able to consistently reinvent the convenience store experience. As long as consumers’ needs change and new categories and products are introduced, c-stores will constantly evolve. For Mark Walker and his team - keeping convenience, quality, and health at the center of their work will ensure no matter what direction the evolution takes, consumer needs will be met.