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How to Increase Profitability for Your Convenience Store

How to Increase Profitability for Your Convenience Store

How can you compete with chain stores, while increasing profitability for your convenience store? Running a convenience store is constant work, and it’s worth the hustle. It can be even harder when you have to worry about all of the little things on the periphery that may be affecting your profitability. You don’t have time to learn about all of the details and train your staff on them. So, here is a no-nonsense list of the do’s and don'ts to boost your sales, so you can move past them and focus on the next step.

Do: Optimize

Optimizing your inventory through redistribution throughout the store, and updating SKUs and suppliers is what most of us focus on first. This is a great first step, and after you’ve collected and reviewed your item data, you can understand how to highlight top performers and switch out declining items with newer variations, or different types. If vendors have changed terms, ownership, quality or reliability, all fundamental components of a good vendor relationship, consider whether you should repair the relationship or search out a better one.

Another area of optimization that doesn’t get as much love, but is well worth the time, is store procedures. Once you have your hiring and training set, it’s easy for it to just stay on the books from 1990. But a lot has changed since then. If a different training strategy, or a quick crash-course on new procedures, would increase repeat sales by even 1%... would that be worthwhile in your book? People may have different goals now, and buyers are more educated than ever. One of the big separators of your store from the big chains is that your local community is happy to help you compete. As an independent store, many patrons would rather visit your store if possible, and giving them more reasons to do this will build on the baseline trust you already have through being a pillar of the community.

Don’t: Forget the Little Things

Customer personalities, item performance indicators, new buyer trends, inventory placement, ways to increase revenue, there are a lot of things to worry about; some bigger than others. You know what to focus on, and for most people that tends to be what you’re best at. To remember some of the other tasks that aren’t as easy or fun can sometimes feel like an item to push down the to-do list. That’s why we’re here. Below is a quick roundup of the most common items that can make more money for your store in less time.

  1. Customer Personalities: customer personas are within this category as well. The personas are important to identify their overall buying habits, preferred engagement strategy, and trends for purchasing volume and return times. If they are a quick-purchase buyer who needs to get in and out as fast as possible, you may not want to engage in much conversation at all. If they are a neighborhood regular who likes to talk, maybe ask a few questions. One intricacy of the persona, their unique personalities, are also just as important. To understand them as a person, not that your employees have to engage in an hour-long conversation with them, but the simple things like knowing their name, asking how they’re doing, or how their week’s been can go a long way. Especially if these people live within your immediate neighborhood, they will take notice (and come back more often).

  2. Item Performance and Novel Buyer Trends: When you brush up on who your buyers are, and how to attract more of them you will need an inventory management plan as well. This will take quite some time to gather all of the necessary performance data, track against your profit and loss statement, and realize gains from ejecting poor performers. Then bringing inventory that you feel will increase average ticket size will boost customer satisfaction and your sales. Good, you’ve gotten rid of the items that have just been gathering dust, and replaced them with items that your buyers would rather bring to the register.

    1. To further appease your more adventurous and curious customers, let’s talk about novel buyer trends. These have been a long-time stalwart of the convenience store industry, and with the significant uptick in educated customers and the presence of social media, novel purchases have skyrocketed. To take advantage of this tremendous opportunity, research what your customers are buying most, and what kind of novel item your target market would likely go crazy over. Making the wrong choice here is a headache, and could cost you. Making the right choice, however, can drum up more business for your store, and increase the ‘hype factor’ that will draw in more adventurous consumers. Having a POS that gathers data for you, making it into digestible chunks will reduce the time you have to spend researching here, so you can expedite the decision you know will help your business. Reporting is essential to staying ahead of your competitors as well, so you can continue with the next trend and those types of buyers may start to know your store as the one that brings the best novel products. A few of these to get you thinking could include: Paqui chips, shrimp chips, Rap Snacks, a type of Mexican candy, or even energy drinks, hats, or plush toys. There are also options for the alcohol and tobacco buyers, and if you offer those products, novelty abounds (Just make sure every regulation is checked when offering those products if you are not already offering them). You can also think of these as impulse purchases because unless they are coming to your store because they know you offer a certain product, these are usually purchased in addition to the goal they had when walking in.

  3. New Buyer Trends and Retention: When a new buyer comes into your store for the first time, what is the first thing they see? What is the first thing they pick up? What is the first thing they buy? If there is a trend in first-time buyer purchases, usually everyday basics, does their first interest match with that item? Is that item one of the first things they see? Why does this matter? When these match up, you get a new-buyer paradise: speed. A new buyer in a c-store typically wants to get in and out as fast as possible. Making it as easy as possible for them to do this is essential in winning their return visit. Having similar items that match well for first time customers, or for the specific purchases that trend in your store, in their line of sight on the way to their item and to the register, can earn you additional sales and loyalty. If an item is performing above all the others, consider increasing your SKU variations based on their buying habits. If this is starting to sound like a lot of extra work and time, that is why it is so vital to find the right inventory management system to streamline the process, so all you get to do is make the decision.

  4. More Revenue in Less Time: Leveraging technology to help with all of this extra work will save your sanity and your time. The right POS for your business should be able to compile your data for you, so you can draw up reports on sections that matter to you, or use the data to compile an even more detailed list. Having a system that can scan IDs, connect with additional services, and make vendor relationship and inventory management a breeze will also do much to increase profitability, helping you stay ahead of the competition. A 15-minute conversation with our experts at Xylo will tailor-fit the best possible solution to your business, to help you do what matters most.

Do: Increase Your Customer Base

Increasing your new customer base through marketing and other efforts will help any business. Convenience stores exaggerate the customer tendency to go to the store that is most convenient to them, and some goods can be offered at convenience+ prices because of this. Also, as we know, because those goods may cost you more than they would cost a corporate grocery store. This can seem like a restraint on growth at times because some of your most loyal customers may come from your immediate area. Bar developing your 5 mile radius, unless you have a few billion dollars lying around, there is not a lot you can do about your local population statistics. What you can do is give customers outside of immediate foot traffic and short car ride radius a reason to become a patron of your store over a competitor. This ultimately comes down to great marketing and superior service. Your customer is there for something specific, in most cases not spending more than 10 minutes in your store. Convenience stores thrive on fast turnaround, and paying attention to that optimization of inventory will help here. What will also help is having products or services that those other stores do not. If you have, or have the capacity to open, a restaurant inside of your convenience store this can often bring more customers who will also likely buy something from your store as well. Think of WaWa or CircleK customers specifically searching them out even if it’s further away than another gas station. Offer a unique product line, food, service, or experience for your customers and they will be more likely to seek you out as well. Going one step beyond what is expected of service, sometimes as simple as remembering customer’s names, will go far to increase retention so you have a steady base of business.

With XYLO as your point of sale partner, you get access to excellent data reporting, license scanning functionality, discount and customer loyalty programs, intuitive customer management, easy scanner integration, intelligent inventory management, vendor relationship features, and additional services that are built to suit your business and your unique needs. Learn how our POS can benefit your business with a no-obligation consultation to match your specific needs today.

DISCLAIMER: The information herein is provided for general informational purposes only, and is not to be construed as business consultant advice, real estate advice, wealth advice, financial advice, tax advice, or any other kind of advice. Xylo does not guarantee that you will have any specific results by following this information, and does not warrant the completeness or accuracy of any of the information. Make sure you consult with a professional, like a licensed business consultant, Realtor, wealth advisor, financial advisor, tax advisor or other professional that suits your particular situation before making any decision pertaining to those areas.

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