Know Your Value Proposition
By Angela Altass
What is your store’s value proposition? Every retail organization must have one, says Janice Rudkowski, assistant professor, Retail Management, Ryerson University.
“Because the industry is so competitive, customers also have so many choices,” says Rudkowski. “If retailers don’t specify their value and position themselves accordingly, customers will go elsewhere.”
A value proposition is a promise made by a company to a specific group of people: the target market, explains Geoff Malleck, lecturer, Department of Economics, Faculty of Arts, University of Waterloo.
“The company lives and dies by this promise as all activity is judged by how aligned your deliverables are to your value proposition,” says Malleck. “If, for example, I promise the best on time performance for my airline, I better be able to prove that true. Trust is very important and not providing that which is promised breaks that trust.”
The goal of any retail outlet, from specialty to convenience, is to be remembered, not just as a physical location but also as solving a problem, said Malleck.
“Convenience stores enjoy the advantage of location, usually in high traffic, high visibility areas, but that is not enough,” he states. “Customers will choose a convenience store for specific reasons. They are quick. They stock what you need and they are safe, clean and secure. There should also be a personal connection, which is often the owner or something special that is sold in the store. Typically, customers drive to the closest, most convenient convenience store as long as it meets those criteria. I will pass by stores that fail any of the expectations.”
Convenience stores should work hard at ensuring a consistent experience, says Malleck.
“While not a regular occurrence, discounts on popular items can attract new customers,” he notes. “Also, something special that is sold in the store can help build a client base. This can include a special floral section, or amazing submarine sandwiches, or a special ethnic dish. The challenge is how to make prospects aware of the lures. The goal is to make prospects aware as they pass the store or through effective marketing efforts. If you have a highly visible location, some attention getters on the outside may work. A clean storefront that is garbage free, well-kept and tidy is important. I have seen excellent point of purchase displays in stores but that only works once the prospect is in the store.”
When looking to lower costs associated with promoting your business, Malleck notes that working with suppliers can often reduce expenses associated with advertising and advises to never discount the power of word-of-mouth.
“Every day prospects are inundated with visual stimuli from billboards to bus signs to storefronts,” says Malleck. “What will attract their attention is something that is relevant or meaningful to them. Sell the benefit, not the feature. What benefit do I enjoy by coming into your store? Peppermint gum is a feature; fresh breath is a benefit. Fast service is a feature; more time in my day is a benefit. You must push the benefit. One marketing opportunity is to invite regular customers to receive emails or texts on weekly specials. If I am familiar with a convenience store and you let me know that cream is on special, I will drop in for the cream and probably purchase something else.”
Never underestimate the importance of the in-store experience, says Malleck.
“Some large retailers spend millions of dollars making promises of an exceptional shopping experience only to have a really grumpy checkout clerk destroy the promise,” he says. “The advantage of most convenience stores is the manager and/or owner is present. This is an incredible opportunity. Conversations with the customer provide primary marketing data and that leads to better decisions. Take time to ask and time to thank the customer.”
While the in-store experience is important, it might also be a good idea to look into whether offering delivery is an option for your business, says Malleck.
“Depending on your neighbourhood, you could consider delivery,” he says. “Those with mobility issues might appreciate the service but be sure to restrict the distance of the delivery service. As companies like Amazon continue to advance their order to delivery cycle, I can see this as a growing threat. However, as more people work from home, I also see opportunities for convenience stores. For example, offering products that are fresh or uniquely attractive to the neighbourhood is viable. A simple website with directions, information about the owner or manager, and specials is a good starting point.”
Retail is dynamic and highly competitive, notes Rudkowski.
“Every retail store, including convenience stores, must always be thinking about how they can stand out in the crowd,” says Rudkowski. “Because of the nature of convenience stores, they tend to have very loyal customers who may visit them daily or weekly to buy the same types of products. Convenience stores can leverage this loyalty by getting feedback from their most loyal customers and finding out how they could improve. This feedback could help them to better plan their assortment, pricing and even their store hours.”
Some convenience stores are now offering delivery, notes Rudkowski.
“This takes convenience to a whole new level and may be relevant to some retailers but not all,” she states. “People living in a neighbourhood may enjoy their daily or weekly visit to their local convenience store so getting feedback is critical. No point investing in a new product or service that your local customers don’t want or need.”
Getting feedback from customers could mean empowering frontline employees to have conversations with customers, asking them what they like about the store and what they think could be improved, says Rudkowski.
“These one-on-one conversations could provide great insights for the store owner to invest into areas that are deemed valuable to a variety of their customers,” says Rudkowski. “Convenience stores should capitalize on one-on-one engagement during the store visit. Making that visit enjoyable and engaging is what is going to being the customer back.”
Ultimately, customers of convenience stores are looking for convenience, says Rudkowski.
“They likely only buy a few products, such as milk, their favourite chocolate bar, lottery tickets or soda, but they will often buy the same products daily or weekly,” notes Rudkowski. “Customers want to find their product easily once they enter the store and they want the checkout process to be pleasant and seamless. Customers who shop in convenience stores are not browsing. They know what they want. So, having the right assortment is essential, but the process needs to be seamless and the interactions with employees should be pleasant.”
Convenience stores have many exciting opportunities ahead, especially in terms of their role within a community, says Rudkowski.
“They can play important roles in being part of the social fabric of a neighbourhood,” she says. “If they take this role to heart, this means they could be involved within their communities; sponsoring children’s sports teams, helping to plant community gardens, and they could even stock products made locally by community members and local businesses. Convenience stores can play an important role in knowing their customers personally and being integrated within their communities.”