For a lot of customers, the firstand last thing they see when theyapproach a convenience store arethe gas pumps. Unfortunatelyfor some retailers, the pumps may also bethe only part of the store a customer seesduring their visit. Thanks to the combination of low fuel margins and high creditcard fees, selling only gasoline is a no-winproposition for stores that lack the heavyvolume needed to be profitable on pennymargins.
The most effective way to overcomethis obstacle is to drive business intothe store. To do this, some retailers havebegan marketing in-store promotionsusing interactive electronic displays and,in some cases, couponing, right at the fuelpumps.
Reeling them in
Tim Kenyon is one of the retailerswho realized the positive impact forecourt marketing could have on in-storesales. Kenyon started Buffalo, N.Y.-basedKenyon’s Variety Stores more than 30years ago with a strong emphasis ontobacco. However, as time passed and thechain grew, Kenyon went on to add gas pumps at the majority of his eight stores.
Kenyon, whose units also offer a largeselection of impulse items and brandedfast food, was using Dresser Waynedispensers for many years, when he discovered its new line of Ovation iX pumpswhich feature full-color LCD screens thatoffered stores an opportunity to show customers what they were missing by stayingoutside.
Using Ovation iX dispensers equippedwith the iX Media software, Kenyon hasbeen able to drive customers inside thestore by using the LCD screen’s capabilities to show customers specials andpromotions are available inside the store—specials they may have missed otherwisewith traditional pumps.
“By attracting existing gas-only customers insidethe store we areincreasing theirmarketbasket yield,” saidKenyon.
While a lotof retailers areusing equip ment similar tothe pumps used at his stores, Kenyon has implementedsome creative marketing techniques withthe screens to pique customers’ interest.
The screen flashes a variety of images, allof which Kenyon selects himself—a valuable feature that he has used to make hisstores stand out. One of his more popular methods involves trivia, which he hasincorporated into a rewards and samplingprogram.
“The first thing that comes up on thescreen when a customer starts pumpinggas is a trivia question about the BuffaloSabers,” Kenyon explained. “If the customer knows the answer and chooses toparticipate, they are asked to go inside thestore, answer the question and claim theirprize, a 20-oz. cappuccino.”
Along with giving away free cappuccino, Kenyon also uses the dispenser’scapabilities to show off a variety of otherpromotions, such as two-for-one Cokes.Not only does the LCD screen give a tantalizing picture of the products, but it alsogives customers an option to print out acoupon that can be redeemed inside thestore, forcing customers to leave their carsand venture inside to find rack after rackof high-margin impulse products to goalong with their beverages.
Video killed the radio ad
Scott Zaremba, owner of Lawrence,Kan.-based Zarco 66 stores is anothergas-heavy marketer in his area, muchlike Kenyon is in Buffalo. Like the VarietyStores, Zarco 66 jumped into the business in the 1960s and has since evolvedinto a local powerhouse, operating sevenc-stores, all with car washes, while preparing to open an eighth. The full-color videoavailable with the new technology hasmade it easy to show gas customers whatelse the store has to offer.
“The capabilities of these screens has really been an advantage for us becausenow we can show the customers whatelse is available and we can do it right atthe pump,” said Zarema. “Instead of justshowing a slide that advertises our carwashes, we actually have videos displayed,showing customers the car wash in actionand letting them see how well the washworks.”
Luring his gas-centric customers fromthe pump into the store has always beenan issue for Zaremba, who takes pride inhow technologically advanced his storesare compared to others in the area. Formuch of Zarco 66′s existence, the chain hasbeen using its proprietary “Zarco RadioNetwork,” which blasted from speakersabove the pumps to provide the customerswith both music and specials. Zarco Radiowas successful in migrating some of thecustomers into the store, however, it didn’tleave a favorable impact on all customers.
“Some people weren’t fans of the radio,”Zaremba recalls. “But the beauty of the newscreens is that they provide a visual experience. If somebody didn’t like the radio,they still had to listen to it as long as theywere at the pump. With the LCD screens,the customer now has the option to turnaround and ignore that if they want to.”
The screens also have audio capabilities,which make the old Zarco Radio Networkobsolete in some ways. They are also planning on ways to utilize both the audio andvisual capabilities of the pumps, Zarembaadded.
Another video believer is Laurie Bull,marketing director for Las Vegas-basedFabulous Freddie’s. Fabulous Freddie’s isusing visual aids to help prompt customersto make the 20-pace walk into the store. Thechain uses Gilbarco Veeder-Root’s SMARTMerchandising program and Encore S dispensers. Bull has found success with the autonomy that comes with marketing atthe pump.
“We’re looking into running daypart promotions that switch automaticallywith the time of day,” said Bull. “It’s nicebecause the specials are updated in real time so you don’t have to worry about changing promotional signage. That’s a big help when promoting foodservice and trying to attract customers across different dayparts.”
Versatility at play
When Kenyon started to integrate thetechnology in his pumps, he had severalgoals in mind. First and foremost was tocreate an integrated system that wouldconnect and increase sales from the forecourt to the store, thus boosting the averagenumber of walk-in customers beyond the1,200 a day he was already seeing.
“We started out testing the pumps at justone of our locations, and it’s been a success”Kenyon explained. “We will be implementing the technology at any future stores.”
Since applying the new technology tohis store, Kenyon has seen a very noticeableboost in the amount of customers passingthrough his door each day. Now that thatconnection has been made at his test site,Kenyon has moved onto the next goal he had set for himself: using this new technology to develop incremental revenue.
As part of that strategy, Kenyon is looking to sell advertising space on the screensto local vendors. The store has been able to generate a solid revenue stream byproviding a direct link between vendors,such as high-end jewelry stores and autoparts shops, and their customer base. Andthe best part about it is he didn’t have toincrease labor dollars or operating costs todo it.
With the added business this marketingapproach has brought inside of his stores,Kenyon sees advertising at the pump to bemuch more than a trend.
“This technology is going to developjust like pay at the pump,” Kenyon said.”Eventually all [operators] are going to beusing this kind of technology to better theirstores. Media at the store is the wave of thefuture.”
The marketing versatility of LCD screensat the pump has proven even more important recently to Zarco 66 with its entry infoodservice. In order to help bring attention to everything his stores have to offer,Zaremba has been taking advantage of thepumps’ coupon-printing capabilities.
“With our foodservice operations beginning to expand, we’re using the coupons atthe pump to bring people in,” said Zaremba.”When they see a product they like on thescreen, they’ll have an opportunity to printcoupons that give them combo meals at aspecial prices.”
Zaremba doesn’t intend to stop at coupons when promoting his food serviceat the pump. He’s currently looking intoevolving his technology to allow customers to order and pay for food at the pumpsas we