It’s a hugely exciting time to be part of the ever-evolving retail media industry. There is almost daily news of technological advancements, newly established Retail Media Networks and enhanced capabilities that offer new opportunities for both retailers and CPG brands (keep up with Unfold, Threefold's biweekly retail media newsletter).
While retail media has impacted all of retail, it has reached the most success in the grocery category, as these retailers are set up to win with existing robust loyalty programs and regular, returning shoppers. But there’s another sector of retail that’s equally set up for success: convenience. Convenience as a sector has witnessed remarkable growth, firmly embedding itself in consumers' purchasing routines.
According to the 2023 Convenience Store News Industry Report, total U.S. convenience store sales soared to a record $814 billion last year, marking a substantial 23% year-over-year increase. Moreover, convenience store count also rose by 1.5% in 2023, surpassing 152,000 locations nationwide. This comes as major chains and fan favorites, like Wawa, grow footprints and expand into new markets.
As Jeffrey Bustos, VP of Measurement Adressability Data + Commerce at the IAB recently wrote, “C-stores present a largely untapped opportunity in the realm of RMNs, ripe with potential”.
We’ve already seen convenience retailers capitalize on their unique positioning to get their fair share of the RMN pie. In March, Wawa launched Goose Media Network, joining other major convenience store operators like Casey’s (Casey’s Access) and 7-Eleven (Gulp Media). We at Threefold envision more players in convenience will enter this year and beyond due to C-stores' unique attributes that foster incremental ad spend from CPGs.
1. Mindset and Mission
Mindset and mission play a crucial role in understanding convenience store shoppers: they typically aren’t there for a big-basket stock-up with a grocery list for the week ahead; they are usually there for an immediate fulfillment moment. While this usually means basket spend will be smaller than at a grocery store, the c-store shopper’s mindset fosters openness to impulse purchases and receptiveness to inspiration during their visits. A survey by NCSolutions found that 71% of shoppers discover new products and brands in convenience stores. This indicates a significant potential for higher returns on convenience retail media campaigns, as consumers are more likely to visit a store closer to when they saw a brand's advertisement.
2. Frequency of visit
The frequency with which a shopper visits their local convenience store is also much higher than a traditional grocery store. This, especially in the North American market, is largely driven by frequent fuel-related visits. This regular foot traffic presents ample opportunities for retail media campaigns, increasing the likelihood of ad exposure and targeting the desired audience multiple times. Leveraging the data Threefold collects via our proprietary Plan-Apps technology, we know that it typically takes 3-5 interactions to drive a shopper’s purchase, meaning convenience has the opportunity to achieve this in a shorter time frame than grocery.
3. Store and product format
C-stores typically offer a significantly smaller format than their grocery store counterparts. With these smaller-scale stores, it can be easier to track a shopper’s journey from entry to exit; and with that, know when and how to best reach them. Likewise, the unique format increases the likelihood that a shopper will engage with a brand’s advertisement, maximizing CPG investment. C-store products are often sold in smaller packages than those sold in grocery or mass retail. This is attractive to CPG advertisers, who want to market-test new products before committing to wider distribution. Moreover, the higher margins associated with convenience store product ranges make them an attractive investment stream for CPGs.
Convenience stores present a unique and personalized setting for retailers and CPGs to reach new audiences. In our time working with Co-op, the UK’s top convenience retailer, managing and running Co-op Media Network, we have seen great success in capitalizing on Co-op’s strengths relating to the scale of its operations and the uniqueness of convenience shopping. Kenyatte Nelson, Chief Membership and Customer officer at Co-op, says “convenience shopping and supermarket shopping are different purchasing occasions, and brands will see greater sales and brand-building benefits by executing media against both."
RMNs can often be the most profitable part of a retailer’s business, one can't help but speculate on which C-store operator will be next to reap the rewards.
About Tara Hekmat
Tara Hekmat is a Client Director at Threefold, where she partners with retailers & CPGs to launch and optimize end-to-end retail media strategies, curating omnichannel campaigns that supercharge sales to deliver improved performance. Prior to her role at Threefold, Tara spent 6 years on the Capture team within SMG, collaborating with CPGs to plan, execute and measure their retail media campaigns across top grocers. Want to chat about how Threefold can supercharge your retail media strategy? You can reach her at tara.hekmat@threefold.team.
About Threefold
Founded in 2008, Threefold is the world's leading Retail Media Network (RMN) specialist, headquartered in both New York and London. As part of the SMG agency network, which employs over 250 retail media experts, Threefold's primary mission is to unlock incremental CPG budgets, curate media campaigns that supercharge sales and elevate its retail partners into top-tier omnichannel media owners, spanning in-store, off-site and online.
Threefold's services include consultancy, evaluation, and a white-label in-house solution that has seen the agency build, run and operate over 10 Retail Media Networks to date. In the UK, Threefold runs and operates Walgreens' Boots Media Group and Morrisons Media Group, and additional live partners include major retailers like Asda, The Co-op and The Very Group.