We’re in an era of enormous change, from shopper behavior and tech innovation to the business environment itself—and those in the gas, grocery, and convenience store markets are particularly feeling the upheaval. Caused by the convergence of multiple factors, the turbulence in the marketplace is expected to continue through 2022 and beyond.
Navigating these evolving trends is essential for the distributors, owners, and franchisees who keep our shelves stocked—and for the marketers with their eyes on the numbers. By understanding the changes and finding the opportunities they present, brands can do more than adapt: They can come out on top.
Four Top Trends for Gas, Grocery & Convenience Stores
Even before a global pandemic turned the world upside down, dramatic changes were pressing upon these industries. Each trend creates novel challenges, just as it produces new opportunities.
Trend #1: The Rise of Electric Vehicles & Alternative Fuels
Around 1.8 million electric vehicles (EVs) were registered in the U.S. as of 2020, up from 300,000 in 2016. EV ownership will no doubt increase as more Americans want cleaner cars and lower fuel costs. Gas stations are ideal locations for EV charging facilities, and many are adding electric plugs to their forecourts. And since charging a car takes longer than pumping gas (about 30 minutes), drivers have more time to relax inside the store. Savvy retailers are catering to these customers with enhanced opportunities for shopping, dining, and entertainment. The push toward greener vehicles is also boosting the demand for gas stations to provide other alternative fuels such as biodiesel and ethanol.
Trend #2: Shifting Public Policy & Gas Prices
Eco-aware consumers aren’t just affecting the automobile market, they’re also shaping public policies that will affect the gas, grocery, and convenience store industries. As concerns over climate change continue to mount, so does the likelihood of new legislation that’s designed to combat its environmental influence. Laws to reduce emissions, develop clean energy, and cope with climate change could greatly impact the prices that people pay for gasoline—and for everything else. Because of regulatory and policy changes like these, fuel marketers have started adapting their marketing strategy to focus on more innovative opportunities, such as rewards partnerships with auto parts stores, or increased investments in biofuels.
Trend #3: Ongoing Supply Chain Issues
Since the pandemic began, we’ve all noticed the empty shelves and out-of-stock items at our local stores. Large-scale bottlenecks, the recent omicron variant spike, and other problems with the supply chain have disrupted the global flow of goods, causing record shortages on everything from toilet paper to refrigerators to bicycles. The result: higher prices, annoyed customers, and stressed-out retailers. And it’s not expected to end anytime soon. While covid spawned the supply chain crisis, it’s being exacerbated by the Great Resignation—the record number of Americans quitting their jobs, which topped 4.3 million this past November. Many of them are the minimum-wage earners who kept the wheels of commerce turning, like the warehouse workers and truck drivers that supply chains depend on. They’ll need to be lured back with higher wages and better benefits, which will increase consumer prices even more.
Trend #4: Limited-Assortment Grocers
Months of cooking at home on tight budgets has led to home-chef burnout, and led supermarkets to accelerate and expand their offerings of “limited assortments”—a smaller variety of grocery items and/or pre-prepared meals at lower prices. Discount food stores like ALDI, Save-A-Lot, Lidl, and Grocery Outlet are flourishing by selling their own private label products while eschewing most (or all) perishables like meat and produce. Service and staffing levels are significantly reduced, but shoppers don’t mind when the prices are around 40% less than traditional supermarkets. Inflation will likely drive more Americans to limited-assortment grocers, but supply chain woes may take a bite out of the bargains they offer.
Localized Markets Need Local Solutions
What does all this mean for gas, grocery, and convenience stores? Unlike some industries, these markets are highly fragmented and franchised. Numerous local and regional companies compete in a landscape that looks quite different depending on where you find yourself in America. The distinct, location-based focus of these industries means having localized marketing strategies can be a big step ahead in competitiveness. For brands where hyper-localization isn’t an option, grocery and convenience retailers should focus on minimizing friction for their customers and providing a much smoother and more positive purchase experience, which serves much the same end goal as hyper-localized campaigns. Brand messaging must connect with consumers—and offer specialized benefits that speak to this specialized audience.
National Distributors Feel the Impact
The effects of localization trickle up to national distributors, who sell directly to the retailers in these fragmented markets. To appeal to franchise operators, distributors must position themselves as value-creating entities with novel solutions. In the end, retailers must continue to find ways to create and showcase value to their customers; some may invest more in local, others in expanded partnerships, others in tech all in service of creating value. But change is happening rapidly with incredible tech innovations that are transforming the future of marketing—like Cardlytics.
How Cardlytics Helps Brands Navigate New Trends
Massive fluctuations are pressing on businesses today, from the broadest global trends to the tiniest local details. In a complex marketplace where each little snack purchase is connected to the worldwide economy, the right knowledge—and the right partnerships—can make all the difference. That’s where Cardlytics comes in. Our native ad platform works within banks’ digital channels to provide our partners with purchase insights, a powerful tool for driving marketing results. Together, we can pilot the seas of change and drive the results that bring success. Want to know more about Cardlytics? Please contact us today.