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Maximizing Opportunities in Convenience Channels through Shopper Insights

17th September 2009

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The Convenience Lanscape in Canada

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• 23,435 Convenience Stores in Canada• 11% of all retail points of sale• $11.6 Billion annual sales (excluding

tobacco & gas)

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And drug stores ….

Base: Total Trips (9940) 3

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Channel Share of Value by Region

Base: Total Trips (9940) East (1038) West (2358) Quebec (2202) Ontario (4342) 4

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Why do people go to Convenience Stores?

Traffic Drivers to Convenience & Gas Q1-Q2 2009

Base: Total Trips (6471)

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Understand Traffic Drivers

• Understand what drives people to the store• Retailers need to attract shoppers with traffic drivers by floor

pricing and assortment

• But ….

• Convenience shoppers on average buy 1.14 additional categories

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Secondary Categories Q1-Q2 2009

Base: Total Trips (6471)8

More Chocolate & Salty Snacks sold as secondary items than as traffic drivers

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Shopper Profile

9Base: Total Trips (9940)

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Convenience Shoppers

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The Shopper

Josh - aged 19

Goes to 7-11 between classes at UBC

Usually buys a single serve CSD

The Facts

55% of 7-11 shoppers are under 40

37% of 7-11 shoppers are ‘thirsty’ when they visit and leave the store with a beverage

The Challenge

30% of 7-11 beverage shoppers only buy one category

7-11 basket value is 24% lower than the average

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Convenience Shoppers

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The Facts

64% of Esso shoppers are male44% are 40+

24% of trips are in the morning and 14% are triggered by coffee

The Challenge

Esso is missing female shoppers

Only 4% buy milk at Esso only 7% buy any groceries

The Shopper

Tim - aged 49

Stops at Esso On The Run

Buys coffee in the morning, sometimes lottery ticket

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Triggering that secondary purchase

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Understanding Category Interaction

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Total CSD-Single IndexTotal: Chocolate 12% 14% 111Chocolate/Candy bars 11% 13% 116Chewing/bubble gum 7% 4% 59Chewy candies 4% 5% 119Hard candies 3% 3% 97Total: Salty Snacks 11% 24% 208Salty snacks - Individual 5% 16% 357Salty snacks - Large 7% 7% 112Total: Nuts/Seeds 2% 4% 244Total: Ice cream 4% 4% 105Total: Other Snacks & Desserts 10% 4% 40Total: Lottery Ticket 22% 6% 29Instant Win 10% 5% 50Draw 14% 2% 16Total: Tobacco & Lighter 8% 1% 18Total: Milk 17% 2% 10

24% of Shoppers who visit a store to buy a single serve CSD also buy salty snacks

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Need States of Convenience Shoppers

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Impulse!

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Decision Making on Convenience Trips

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Decision Making on Convenience Trips

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Pricing, assortment & out of store promotion

Merchandising, secondary displays and

promotion

Pricing, merchandising, packaging, out of store

communication

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Who wants yesterday's papers?

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Decision Making on Convenience Trips

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Shopper Profile – News/Magazine Buyers

20Base: Total Trips (9940)

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Need State Impacts Brand Decision

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So…..

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So….

• Understand the traffic driver …often beverages – but depends on the shopper• Understand the secondary purchases• Trigger impulse – note the higher impulse categories

• Work with retailer to develop strategies around this information that work for everyone

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Thank you