How Price Sensitive are C-Stores?

Generally, because of the technological age we are living in, being priced competitively is even more important since consumers are able to price shop right in the aisles of the store. The question is, does this phenomenon translate to the c-store channel, or are we in a protective bubble?

The good news is, that with the exception of a handful of key items, convenience stores are still able to charge a relatively higher price than the mass market for most products.

Research shows that consumers are willing to pay for just that, convenience. The key is that we must maintain a convenience price that is lower than the opportunity cost that the customer will incur in purchasing the product or service from a traditional (non-convenient) business. Convenience price = Price at the traditional store – Price at the convenience store

Research shows shoppers only recall prices for a small number of items, so we must make sure we identify the categories that matter most strategically to our channel and Establish dynamic price-gathering and price-optimization capabilities. We must make sure we do not price every item low to try to keep up with competition and end up “racing to the bottom”.

As discussed, we are able to get a reasonably higher price in c-stores, with the exception of some key items and categories. We call these key value categories (KVCs) and Key value items (KVIs). KVCs are categories that drive value perception the most and have a higher mix of KVIs. KVIs are the items that drive value perception the most.

Four types of KVIs:

Value-perception drivers
Memorable items that typically shape traffic over longer time frames. For example, bananas and milk for grocers or socks and basic T-shirts for apparel retailers.

Assortment-perception drivers
Items the build a distinctive product selection that gives customers a point of view on what they should buy from a retailer. For example, remote-control toy cars may be critical to a specialty electronics retailer or distinctive prepared-foods may be critical to higher-end grocers.

Traffic drivers
High-velocity items that inspire incremental shopping trips. For example, beer and diapers.

Basket drivers
Low-velocity items that inspire incremental purchases in a shopping trip. For example, 16-ounce pasta sauce, which drives pasta, vegetables, and meat. It is important that we are priced competitively on theses high-visibility items and categories, to maximize value perception and business results (for example, traffic, basket, sales,and margin) and to increase customer engagement and loyalty.


Source: The Convenience Guru. Value or Convenience – what’s important to your customers?

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