Convenience Stores Expand Their Offerings: Maximizing the Value of New ProgramsSeptember 1st, 2017 | Posted by in Retail
Convenience stores are racing to establish themselves as more than just a pit stop for fuel and snacks. Previously, we addressed how some convenience store chains are adding features such as seating areas, Wi-Fi and drive-thru windows, and investing in services like USPS goposts to drive traffic.
Now, as highlighted in a recent Wall Street Journal article, convenience retailers continue to grow their offerings and services through money-transfer options. BP gas stations in Australia partnered with Western Union to enable customers to send money overseas, with gas station attendants facilitating the transaction. This collaboration allows customers to set up a transaction using their mobile app, but pay in cash at the gas station. It is also helping Western Union compete with FinTech startups that already provide consumers with international money transfers from home computers or mobile devices.
But what are the benefits for BP? The chain is not alone in capitalizing on the concept of in-store cash transfers; 7-Eleven offers MoneyGram kiosks at select locations, and other convenience retailers may implement similar services. The obvious advantage of any new offering is that it will drive customers to the store, leading to additional purchases. However, there is a question of how to maximize this positive impact. Given the potential complexity of rollout and partnership agreements to offer financial services in-store, it is critical that convenience retailers develop a keen understanding of not just a program’s success, but how they can tailor the offering to make it as impactful as possible.
For example, when introducing such offerings, convenience retailers should take into account different considerations, like where to place the cash-transfer kiosk or counter in the store, and which products to locate adjacent to it to encourage retail purchases. The most reliable way to answer these questions and refine a new program is to deploy variations of it in a subset of stores and compare their performance to that of stores that did not receive the program, to understand which iteration will generate the greatest positive impact.
For example, imagine a convenience retailer wanted to implement money transfer kiosks across the chain, but was not sure which products it would be most strategic to place adjacent to the kiosks. By rolling out the kiosks on a smaller scale and placing them in proximity to different products in different stores – such as near the coffee bar, or the salty snacks aisle – the convenience retailer could use test vs. control analysis to determine where to position the kiosks for the greatest ROI, and apply these insights to inform broader rollout.
Overall, it is critical that convenience retailers hone their ability to quickly and accurately evaluate new ideas. As convenience stores continue to evolve and expand their offerings, those that are able to best identify how to maximize the value of new programs will develop a competitive advantage.
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