STATE COLLEGE, Pa. -- Imagine you saw 18% more customers in your stores within a year, but 7% fewer of them bought something. Meanwhile, the average in-store shopping basket fell 2%. That is the exact dynamic that retailers participating in a groundbreaking study by VideoMining Corp. faced in 2011, covered exclusively by CSP magazine in its July issue.
"We have more foot traffic in the store in 2011 versus 2010--but it's the same set of categories that get high traffic," said Priya Baboo, executive vice president of shopper insights and strategy with VideoMining, State College, Pa., a research firm that measures shopper behavior in the c-store and grocery channels. "It's up to us to leverage the increase in traffic to our advantage."
In its 2011 C-Store Shopper Insights Program, VideoMining captured shopper behavior in two million shopping trips at five convenience store chains--including Circle K, BP/ampm and Cumberland Farms--representing 48 stores in 11 markets, all during six weeks in August and September. The research firm used a combination of ceiling-mounted cameras and video-analysis software cross-referenced with point-of-sale data to reveal the customer's path to purchase and conversion into a shopper and a buyer. Several CPG companies participated in the research, including The Hershey Co., Sara Lee Corp. and General Mills.
For exclusive video highlights of shopper behavior, watch the embedded video or click here.
For Hershey, the 2011 research confirmed many candy category basics, but also triggered new areas of c-store shopper behavior to explore.
"The 2011 study confirmed that candy conversion was similar to 2010, it's an important characteristic of building basket size in c-stores, and that candy purchases are still primarily made in the aisle," said Cesar Del Carpio, category management specialist with The Hershey Co., Hershey, Pa. According to the VideoMining research, the rate of traffic-to-candy-buyer conversion remained flat, even as basket sizes rose 9%. Primary aisles generated 81% of overall dollar sales.
One interesting finding was the changing demographics of the c-store shopper. There was a 25% increase in young adult c-store shoppers in the 2011 VideoMining research, to reach one in three shoppers. Meanwhile, one in four c-store shoppers were Hispanic. "How do you really leverage growth in those demographics, and execute your messaging and customize assortment to index higher with these demographics … to begin to build loyalty with these demographics?" asked Del Carpio.
And, one in two candy shoppers were Hispanic in the VideoMining study. While Del Carpio said this may partly reflect the 2011 study's sample, "it shows there's a lot more Hispanics going into the c-store. How do we really meet needs of those demographics through our core products and innovation?" For example, certain core Hershey brands index high with Hispanic consumers--including Hershey with Almonds, Hershey Cookies n' Crème and Jolly Rancher. "How do we continue to leverage those core brands in the stores?"
Regarding the growing young-adult shopper segment, the industry needs to examine this demographic more to tease out their shopping habits and how retailers and suppliers can best target them. "We know young adults are more tech-savvy, more mobile, so how can we adapt shopper marketing programs to best meet those demographics?" Del Carpio asked. "We will need to do a deeper diver into the demographic, to see what their preferences are with candy, different brands, category and segments within the category as well."
From a day-part perspective, the conversion rate of shoppers into buyers fell throughout the day. Here, Del Carpio advised merchandising candy in key locations to increase conversion in the p.m. day-part. "Candy conversion is higher after 4:00 p.m., and performs well when paired with beverages and salty snacks," he said.
The greatest barrier to higher conversion rates, Del Carpio noted, is placement. "The key to driving conversion in the aisle is to optimize your candy set with high-velocity items, offer variety to meet shopper needs, and block by brands and price point to make shopping easier." For example, he said that some retailers make the mistake of placing nonchocolate candy horizontally along the bottom of the set, when it would be more effective placed vertically.
"You want to bring up higher-velocity nonchocolate items to eye level and to the customer. If it's on the bottom two shelves, you may be missing out on sales."
For more insights from the 2011 C-Store Shopper Insights Program, see the July issue of CSP magazine.
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