Though gas prices have dropped significantly from a year ago, forecourt-driven sales are still a challenge for many convenience stores because people aren’t buying gas as freely as they did several years ago. The reason? Our troubled economy makes it tough for many to afford the long car trips.
Fewer trips mean fewer opportunities to market through the forecourt, making it more imperative than ever that retailers use every forecourt marketing strategy they can to drive store traffic and grow in-store sales.
Whether it’s pumptoppers, interactive pump videos, vending machines at the fuel island or outdoor displays that offer 12-packs and washer fluid, c-store owners are finding new options to do just that. The key to making them successful is having the products visible and for sale at an attractive price.
LEDs a Big Draw
Kulwinder Singh, co-owner of Black Diamond convenience stores in Concord, Calif., and his partner Jadi Singh picked a winner when they decided to install LED lighting a year ago. The brighter lights encourage more nighttime business and put a spotlight on the products stores are marketing outdoors.
“Customers respond positively to the lighting,” Kulwinder Singh said. “It’s bright, but soothing as well. Sometimes when people enter a place with very bright light, they feel uncomfortable, but people feel very comfortable with LEDs. It’s very nice.”
Unlike fluorescent lights, which contain small amounts of mercury, LEDs are toxin-free, and provide a more natural, daylight type of illumination compared to other kinds of lights. Inside, they create a brighter environment that looks sun-lit.
Because the store is located in an area with a lot of young, upwardly mobile commuters, Singh is finding the new lighting also impacts his customer demographic. “We’re seeing an increase in young female traffic now because women are more comfortable coming in late at night than they were before we changed the lighting,” he said. “And that’s important because we feel confident that once we can get them on the lot we have a strong convenience offering and fuel brand with Chevron to convert them to regular customers.”
Not only is the store brighter and more psychologically comfortable than it was before, it’s more visible from a distance as well because Black Diamond’s owners installed LEDs in the canopy and car wash, where Singh’s loyalty program continues to draw customers.
Boost to the Bottom Line
Still, the most glaring benefit LED lighting offers is a significant reduction in utility costs. “The system is expensive to install, but even though the one-time initial cost is high, in the long run it does make a very positive financial difference,” Singh said.
Steve Welge, president of Fillner Construction in California, which installed Black Diamond’s LED system, promotes the upscale lighting system primarily because of the energy savings companies realize.
“In the Singhs’ case, we found that replacing the yard, canopy and exterior building lighting with LEDs cut exterior lighting costs by about 60%, which is substantial for a gas station,” Welge said.
LEDs also provide a longer life span than other kinds of lighting. “The lighting used on this site has a manufacturer-rated lifetime of 150,000 hours versus about 20,000 hours for comparable halide bulbs,” Welge said, so with 12 hours of use per day, they will last 30 years. “That’s about as close to maintenance-free as you can get. They’ll have to tear down the canopy before they change the light bulbs.”
Furthermore, Welge expects that prices for LED systems will continue to drop. He pointed out that for exterior lighting systems, paybacks now are typically less than three years. “A combination of increasing power costs and decreasing LED costs due to technological advances have made them significantly more affordable,” he said. “The great thing is that savings from LEDs goes straight to the bottom line—and given the push for more energy efficiency at all levels, the time may well come when installing these lights becomes mandatory.”
Small Steps, Big Impact
The most impressive forecourt marketing results come not from one big effort, but from the cumulative effect of many smaller ones, said Rick Dery senior vice president of branded marketing and chief marketing officer for Gulf Oil. Since Dery assumed his post, four years ago, he’s instituted a number of changes and improvements that have seen average monthly sales at Gulf retail sites soar by 30%.
One of Dery’s current marketing programs is “Making Green Miles,” a social networking program that allows people to go online and share ideas about what they do to offset their carbon footprint.
“We’re trying to reach out to a whole new audience,” Dery said. “Every year, somewhere between 12 and 13 million new drivers enter the market. “We recognize that electronic communications media are a viable way to get our message to them, especially on an interactive basis.”
This marketing effort includes brighter lighting, a growing array of forecourt marketing that includes beverages and automobile accessories and pumptop displays to communicate in-store specials. “The marketing effort doesn’t stop once we communicate with the customer,” Dery said. “Then the tactic becomes executing transactions and keeping them as loyal customers.”
Recycled Containers Rock
Another successful forecourt-type marketing promotion involves Gulf’s “Mile Makers” team, a group of interns that drive vehicles wrapped in Gulf Oil colors all over the country to encourage drivers to go green by distributing promotional items, such as recycled Frisbees, reusable shopping bags, water bottles and eco-friendly driving tip magnets. “The greatest opportunity to have the least impact on this environment is to use refillable bottles,” Dery noted, adding that this promotion also has a presence on Facebook, where the team’s appearance at upcoming public events, concerts and grand openings is posted.
Gulf’s loyalty marketing program, which allows its customers to enjoy discounts at Gulf gas stations after spending dollars at Dunkin’ Donuts and Shaw’s Supermarkets, is definitely growing sales. “The program has been out for about six months now, and the results have been absolutely stellar,” Dery said.
Gulf is also continuing its “Get Spotted” promotion, which began in July 2008 and rewards drivers who place a Gulf decal on their cars and register at www.gulfoil.com/getspotted with a chance to win a $20 Gulf gas card if “spotted” by a member of the promotion staff.
Participating drivers also are entered into a pool for a monthly drawing of a $500 Gulf gas card. Dery said that since the promotion began, 400,000 decals have made their way into the marketplace, and Gulf has given out thousands of dollars in gas cards.
Finally, Gulf is promoting its Commercial Fleet Card with no fees for 2009. “We know there are many choices when buying gas,” Dery said. “These programs are designed to bring our 100-plus years of name recognition and brand awareness to a new generation of drivers and ultimately build business for our retail outlet partners.” CSD