Getting Started

As more convenience store retailers consider entering the subscription service space, there are some things they should keep in mind before jumping straight in.

First, it is important to take a look at the competition in your market and understand what is out there — and not only in the convenience retail channel, according to Jeff Hoover, director of c-store data insights at Newton, Mass.-based Paytronix.

“Especially when it comes to subscriptions, look at Panera and the other restaurant brands that are offering subscriptions. That will really help inform the right pricing model for you,” he advised. “If you’re in a market where everyone’s at $5 a month, the subscriptions coming out with a $10 or $15 price point are probably not a model that’s going to work very well.”

Hoover cautions c-store retailers not to get caught up in penciling out a higher price point because the average customer is going to come in and use it two or three times a week. Instead, he said “it’s really important to think about and work with your partner to understand the overall impact of pricing and what we expect the attachment rate to be.”

C-store retailers need to understand their competition and their customers, and think about profitability beyond just the redemption, but also the attachment rate and increasing customer visits.

“It’s important to look at the full context of the ROI [return on investment] and the change in behavior that will come with someone in a subscription, as opposed to just individual exemptions of that item and thinking about it from a cost diverse perspective, because there are other benefits,” Hoover added.

He believes operators should consider a free trial period when introducing a subscription service; or if it is a tiered model, giving customers a higher tier access the first month but after that, they have to have a certain number of visits or pay a certain price to maintain that tier.

“A free trial could be a great acquisition method,” he said.