Jared Scheeler has discovered an effective way to ensure that the new products he stocks in his convenience stores not only resonate with his customers but also drive sales of existing product offerings. Scheeler, CEO of the six-unit Hub Convenience chain in North Dakota, features new and established salty snacks and candy bars in dump bins, backed with aggressive pricing.
“We put them in prominent walking areas of the store,” Scheeler explained, noting that the bins, which are supported with promotional signage, are successful in garnering impulse sales of both the new products and the “tried-and-true” ones. “I’m a big fan of innovation and new products,” Scheeler said. “I like for my company to be known for highlighting new products in sets.”
For Scheeler and other convenience retailers, new products can serve as a point of differentiation, while for many product categories they’re a lifeblood, renewing consumer interest and often lifting category sales. “In a limited-assortment environment, innovation can freshen up the assortment on the shelf and replace lower-performing SKUs,” remarked Jessica Gardeck, associate channel manager at General Mills Convenience. The new entries also appeal to consumer demand for variety. According to Scott Ward, group vice president, convenience, at Hostess Brands, “New products keep c-store offerings fresh and satisfy consumers’ desire to try new flavors.”
To be sure, new brands also can aid a retailer’s bottom line. “Stores that embrace new products develop a reputation with shoppers for being a destination for new brands and unique varieties,” said Kevin Martello, vice president, convenience retail, at Keurig Dr. Pepper. That innovation, in turn, provides an opportunity for incremental sales. What’s more, stores known to stock the latest brands and flavors command a high degree of loyalty. “New products create excitement, drive trial and establish a reason for shoppers to keep coming back to see what’s new,” remarked JC Harvey, director of retail channel strategy and commercialization at Coca-Cola North America.
In a limited-assortment environment, innovation can freshen up the assortment on the shelf and replace lower-performing SKUs.
Daniel Moran, category manager at 35-unit Rotten Robbie, agrees that new products can be important to loyal customers. “Consistently offering variety brings customers back,” the California retailer said, “and it keeps things fun and fresh. We want our customers to know they can expect new things at Rotten Robbie.”
In addition to customer retention, c-store operators say new products can be useful in bringing in new shoppers. “This industry is all about trips,” commented Don Rhoads, president of The Convenience Group LLC, with 11 stores in the Pacific Northwest. “New products can drive impulse buys and attract new customers.”
Making Room
Despite myriad benefits that new products provide c-stores, operators concede that a major challenge is deciding what products to remove to make room for the new labels. Space, of course, is a major challenge for c-stores when it comes to rotating in products. “C-stores are cursed with small space, so operators have to use it wisely,” remarked Liza Salaria, principal consultant at Impact 21. And that applies to the cold vault, as well, according to Coca-Cola’s Harvey. “The key to managing shelf space is to find out exactly what product assortment appeals to the shoppers at a specific store and tailoring offerings accordingly,” said the marketer, noting that data analysis aids decision-making on which products to add and delete.
C-stores also must compete against other trade channels—namely grocery stores—when it comes to new products. General Mills’ Gardeck explained that the grocery channel “inherently has higher, planned traffic, which makes it easier to launch new items and drive trial.” Moran called the habit of c-stores being passed over by groceries “frustrating” but noted that direct-store-delivery purveyors, such as beverage companies, often look to work closely with c-stores on new products. Rhoads agreed and added that it’s critical that convenience retailers have strong relationships with those suppliers to ensure early access to new products. Convenience Group stores, for example, were among the first retailers in the area to stock White Claw hard seltzer, Rhoads said, a brand that has gone on to take the beer category by storm.
Indeed for some categories, c-stores are ideal for new product launches. “Convenience is a great channel for new product rollouts,” said Harvey. “By design, c-stores feature far more immediate-consumption, single-serve beverages than most grocery stores. Shoppers may be reluctant to try new products in larger, multi-serve packs due to the risk of paying more for something they may not like.”
Moran and Rhoads believe that independent c-stores can be a great model for new product launches. “As a small chain, we can pivot so it’s easier for us to test products than a large chain,” explained Moran. And Rotten Robbie empowers store managers to make quick decisions based on a product’s performance. “As long as a product is authorized, they can swap it out,” Moran noted. Similarly, Rhoads said, “We have the ability to maneuver new products without the bureaucracy that others face,” and that can be alluring to some suppliers. “My suppliers know that I want to be first to market, and that at my stores, there aren’t a lot of barriers,” he said.
Rave Responses
Several notable new brands have been introduced into c-stores in the past year, and according to suppliers, they’ve been well received. Earlier this year, Coca-Cola North America launched Coca-Cola Energy, and Harvey reported that trial and repeat purchase rates have exceeded the company’s benchmarks. “People have responded well to Coca-Cola Energy, which has even brought new customers into the energy category,” the marketer said.
Elsewhere in the cold vault, Keurig Dr. Pepper unveiled Dr. Pepper & Cream soda and Adrenaline Shoc in c-stores in early 2020. According to Martello, the new carbonated soft drink is the first permanent flavor addition to the Dr. Pepper portfolio in more than 10 years, while Adrenaline Shoc appeals to consumers in search of “healthier and more functional alternatives to traditional energy drinks.” To support the introductions, Keurig Dr. Pepper has partnered with c-stores on digital activations by offering product coupons via the stores’ mobile apps.
In the packaged sweet snacks category, Hostess recently rolled out Iced Lemon CupCakes following a strong response as a limited-time offer. According to Ward, the lemon flavor differentiates the snack cake from its competitors. “We’re constantly innovating across the year,” he said, revealing that new entries from Twinkies and Ding Dongs are also on the way. Tastykake, meanwhile, recently launched the ice-cream inspired Tastykake Scoop Shop line of products, as well as new flavors for its Tastykake Juniors line. “Cross-category mashups are on trend, and we leveraged that to create something fun for consumers,” said Ashley Hornsby, Tastykake brand manager, of the Scoop Shop line.
Leveraging in-store displays or a secondary display near the cash registers is a great place to promote new items.
Some new products are even exclusive to c-stores. General Mills, for example, introduced Gardetto’s Crisps last year. The bite-sized crisps, seasoned with Gardetto’s flavors, “were designed to meet a specific c-store consumer need—to deliver on salty cravings,” Gardeck explained. In fact, the company often uses c-stores as a starting point for innovation, she continued, as “c-store consumers are making purchases based on impulse and are open to trying new flavors and brands.”
This year, General Mills introduced a new Chex Mix MAX’D flavor—jalapeño chili—exclusively for c-stores. And when it came time to relaunch the Dunkaroos brand this summer, the company partnered with 7-Eleven for first-to-market rights. “General Mills has had a tremendous response to the relaunch of Dunkaroos at 7-Eleven stores,” Gardeck remarked. “We look forward to bringing the product to additional c-stores in the coming months.” Among other companies, Core-Mark International, which serves more than 42,000 c-stores, recently announced the launch of Core-Mark Curated, an initiative that will “identify, nurture and help develop the best new brands” for inclusion in the company’s distribution channel.
As in virtually every aspect of store operations, the COVID-19 pandemic this year has disrupted many product introductions. “The launch of Coca-Cola Energy hasn’t been immune to the effects of the pandemic,” remarked Harvey. “The rollout has been slowed due to delayed shelf resets, and key marketing plans—including sampling and in-outlet promotion—have been delayed and pivoted to online only.”
Lending Support
To maximize the benefits of new products, suppliers recommend that retailers consider best-practice tactics such as special displays and placement, signage, promotional pricing and staff awareness. “Leveraging in-store displays or a secondary display near the cash registers is a great place to promote new items to bring awareness to the product,” said Gardeck. Signage touting that a product is new, such as that used by Scheeler at Hub stores, also can garner attention. According to Harvey, “C-stores can draw fuel customers inside by teasing new offerings on the digital screens at the gas pumps.”
Jeannie Amerson, principal consultant at Impact 21, said that when it comes to new products, “discounts are important, too. Buying a new product is a risk for consumers. They need help with the initial purchase.” And suppliers and retailers agree that staff education and engagement can have a big impact on product introductions. Lonnie McQuirter, owner of 36 Lyn Refuel Station in Minneapolis, said he likes for his staff to tour supplier facilities “to get a better product knowledge that we can pass on to our customers.”
With new products as important as ever to a c-store’s success, Martello advises retailers to “take advantage of the innovation early” and the related promotional support that comes with it. Moran from Rotten Robbie, for one, is a big advocate of new products. “They can be essential for bringing people into the store,” he said. “For c-stores, it’s important to embrace them and take risks.”