{"id":2380,"date":"2019-12-16T00:00:00","date_gmt":"2019-12-16T00:00:00","guid":{"rendered":"\/advantage-360\/2020-insights-into-fast-growing-brick-and-mortar-channels\/"},"modified":"2025-11-03T18:24:40","modified_gmt":"2025-11-03T18:24:40","slug":"2020-insights-into-fast-growing-brick-and-mortar-channels","status":"publish","type":"mrktblog-posts","link":"https:\/\/youradv.com\/mrktblog\/2020-insights-into-fast-growing-brick-and-mortar-channels\/","title":{"rendered":"2020 Insights into Fast-Growing, Brick-and-Mortar Channels"},"content":{"rendered":"

Each time I read another article about the \u201cretail apocalypse,\u201d I fight the urge to reach out to the reporter and say, \u201cLet\u2019s talk about what\u2019s really happening.\u201d<\/p>\n

Convenience Stores and Discount Chains Are Reshaping the Retail Industry<\/h2>\n

While most eyes in the consumer goods industry are on incremental sales through e-commerce, there are just as great \u2014 in some cases greater \u2014 brick-and-mortar opportunities. Smaller formats, including convenience stores and discount\/dollar store operators, are broadening their customer bases, growing store counts and building sales.<\/p>\n

Why Physical Retail Still Drives Major Growth<\/h3>\n

This brick-and-mortar evolution underscores the continued r<\/strong>etail industry growth<\/strong> <\/strong>that many overlook when focused solely on digital channels.<\/p>\n

Brands that want to score in retail\u2019s fastest-growing channels, though, need to approach each in very different ways. While they share similar rosy forecasts for growth, their shoppers, product assortments and operating models couldn\u2019t be more different.<\/p>\n

Convenience Stores<\/strong><\/p>\n

There are more than 153,000 convenience stores in the United States and Nielsen recently predicted c-stores will grow faster than all other offline channels over the next five years as brick-and-mortar shoppers demand \u201ceasy access.\u201d While shopping frequency online and in stores has slowed, the shopping frequency at c-stores<\/a> has increased at a constant rate for three consecutive years.<\/p>\n

A significant number of c-stores shoppers \u2014 one third \u2014 are high-frequency customers, visiting one to three times a week, Nielsen found. <\/p>\n

As a group, c-store shoppers<\/a> are mostly aged 25 to 49 (70%) and likely to be married. They\u2019re slightly more likely to be male (53%) than female, a better gender split than the industry attracted a couple decades ago. Nearly half of the channel\u2019s shoppers are middle-to-high income and highly educated white-collar workers. The most frequent shoppers are a bit younger (25 to 34 years old), more likely to be single and have more education and a higher income. <\/p>\n

No matter how many times they stop in each week, though, most c-store shoppers stick to their favorite location, with 72% typically visiting the same store each trip, according to the Convenience Store News \u201c2019 Realities of the Aisle Report.\u201d <\/p>\n

While the need to fill up the gasoline tank plays a role in driving traffic to the store, the reason shoppers go into<\/em> the store is the immediacy of the buy. The c-store stop continues to be all about grabbing a beverage and sandwich or snack, paying for it and consuming it before leaving the parking lot. <\/p>\n

Brands that want to do business at top-tier c-store chains will need to bring immediate-consumption, single-serve items that drive trial \u2014 and offer something new. The channel’s reputation for innovation is well-earned. <\/p>\n

As the \u201cbuy now, consume now\u201d motivation remains constant, the products this channel’s shoppers are consuming have changed drastically over the last decade-plus. Chains are devoting less space to the traditional tobacco, alcoholic beverages and soft drinks mix and more to fresh foods, especially higher-margin foodservice items, better-for-you functional beverages and healthier snacks. <\/p>\n

Leaning into foodservice is paying off, too, as more consumers consider a c-store to be a legitimate go-to for food to go. Some 56 percent of Americans purchase meals at gas stations\/c-stores at least once a month, according to a May 2019 GasBuddy report. A full one-quarter of shoppers aged 30 to 44 say they purchase food at c-stores five times or more per month. One-fifth of those age 18 to 29 purchase food at c-stores three to four times per month. <\/p>\n

I won\u2019t declare microwavable burrito and 32-ounce soda combos dead, but the average size of c-stores<\/a> continues to increase to accommodate kitchens, ordering kiosks and dining space, according to NACS. <\/p>\n

Dollar and Discount Stores<\/strong> T<\/p>\n

he dollar and discount store channel offers brands great opportunities for growth, too, as placement in these stores can mean distribution in nearly 40,000 locations and instant national brand awareness and trial. Dollar General, alone, is expected to open another 1,000 stores in 2020<\/a>, after opening nearly that many this year. <\/p>\n

But, the channel is expensive to enter \u2014 and exit \u2014 as small price points often drive the need for custom item and case-pack sizes. Still, let\u2019s bust one myth now. Dollar stores sell products that retail for more than a dollar. While Dollar Tree is partial to the one-buck price point, the bulk of items at Dollar General and Family Dollar stores are tagged $1 to $10<\/a>. <\/p>\n

And, while the majority of discount and dollar store shoppers are low income, often receiving government assistance, the channel is attracting more affluent shoppers, too. A 2018 Inmar survey<\/a> of dollar-store patrons found 21% reported annual household income of $100,000 or more. <\/p>\n

No matter their income, these shoppers come for one reason: to find a good deal. So, profit margin will always be a key metric driving retailers\u2019 performance. Today, margins are under pressure by increasing freight and warehousing expenses and the all-time-high number of products sold in the channel that are subject to import tariffs. <\/p>\n

Another challenge for brands remains the channel\u2019s limited assortment. Stores average fewer than 10,000 square-feet, compared to a traditional grocery store\u2019s more than 45,000 square-feet. <\/p>\n

But the type of products getting shelf space is changing. Stop thinking \u201ccheap\u201d or \u201ccloseout.\u201d My colleague recently purchased a national brand skin cream after her Facebook friends spread the word it was available for $1 at the local dollar store. (By the way, more than half of dollar store shoppers select a store nearest to work and home and 35% say their shopping trip is a planned trip, according to Mintel.) <\/p>\n

Interestingly, while c-stores strive to move away from their \u201cbeer and smokes\u201d reputation, among the fastest-growing new entries in the dollar and discount channel are alcohol and tobacco. Dollar General, though, is focusing on growing its grocery sales; its Dollar General Market stores devote more than half of their space to grocery items, Mintel reports. <\/p>\n

Convenience and discount\/dollar: Two fast-growing segments, two very different business models, one collective bright spot in brick-and-mortar retailing.<\/p>\n","protected":false},"excerpt":{"rendered":"

Each time I read another article about the \u201cretail apocalypse,\u201d I fight the urge to reach out to the reporter and say, \u201cLet\u2019s talk about what\u2019s really happening.\u201d Convenience Stores and Discount Chains Are Reshaping the Retail Industry While most eyes in the consumer goods industry are on incremental sales through e-commerce, there are just […]<\/p>\n","protected":false},"featured_media":2379,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"mrktblog-category":[41],"class_list":["post-2380","mrktblog-posts","type-mrktblog-posts","status-publish","format-standard","has-post-thumbnail","hentry","mrktblog-category-advantage-news"],"acf":[],"yoast_head":"\nGrowth in Brick-and-Mortar Retail Channels<\/title>\n<meta name=\"description\" content=\"Explore how c-stores and discount chains are redefining brick-and-mortar retail industry growth.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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