Strategies to attract new users, upscale stores and expand must incorporate Hispanics
By Tim Powell, Vice President of Consulting, Q1 Food and Beverage Practice
A few years ago, Walmart dabbled in copying Target’s “upscale” success by catering to a higher income segment. Walmart implemented many of the same strategies as Target throughout its furniture, apparel and merchandising departments yet found that sales and profits suffered. The issue, it turned out, was that Walmart lost its focus on its core customer: the price conscious, not the “image” conscious.
The same reasoning can be applied to convenience stores. The issue for c-stores, however, is to generate growth while not alienating its most important shoppers and consumers: Hispanics. With the Hispanic population expected to reach about 106 million in 2050 (about double what it is today), convenience stores must continue to stay relevant to the Hispanic shopper. This means that c-stores need to avoid the mistake of “lumping” all Hispanics into a single consumer segment.
It starts by identifying the group’s different needstates. Observing Hispanic purchasing patterns and behaviors through a sub-segmentation lens (e.g., demographics and psychographics), operators will have a better handle on how to continue to reach and appeal to Hispanic shoppers.
Hispanic Shoppers Fuel C-Store Growth
Characteristic | Heavy/Moderate | Light/Infrequent |
Gender | Skews male | Skews female |
Age | Skews young (<24) | Skews older (45+) |
Race | Hispanic | Caucasian |
Education | High school, some college | College graduate |
Income | Less than $25k annually | $50k-$75k annually |
Convenience Stores as the “Next Door” Grocery Option
Hispanics tend to use c-stores as the “fill in” food and beverage purchase option more commonly than the general population largely because the stores are typically conveniently located. Operators can therefore turn more “retail” purchases into foodservice purchases by offering quick, quality meals that can feed an entire family. As a result, this could help turn a larger grocery trip into a c-store stop as well.
Young Hispanics are “Plugged In”
Many younger consumers (i.e., ages 18-24), including those in the Latino/Hispanic segments, use social networking tools to learn about new products and share information with their friends and family members. C-stores must continue to “get online” to foster touchpoints with its shoppers and consider mirroring tactics used by Sheetz, Wawa and RaceTrac – stores that are best-in-class leaders in generating social media buzz and relationships.
Dispensed Beverage Variety is Critical to Venue Attraction
The biggest draw to a c-store store (regardless of race or ethnicity) is the beverage. According to our research, Hispanics report they appreciate stores offering flavored carbonated soft drinks, juice drinks and lemonades. A foodservice purchase could be negatively affected if the beverage of choice is not available.
The Hispanic population is an extremely important group of shoppers and consumers that c-stores continue to attract and appease. As this population grows, c-store operators must continue to evaluate, adapt to and deliver on the needs of this group to be relevant and successful overall.