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VIRTUAL THE PRIVATE LABEL BEAUTY & PERSONAL CARE SESSION

October 10-12, 2023

VIRTUAL THE PRIVATE LABEL HEALTH, VITAMIN, & OTC SESSION

October 10-12, 2023

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Craig Chmielowicz, Senior Vice President of Health & Beauty cchmielowicz@ECRM.MarketGate.com

say that there is this shift in behavior the second you’re inside of the C-store environment.

Q: What is driving Gen Z to convenience stores? Will this behavior moderate over time as they age?

A: Historically we’ve seen that younger shoppers have always gravitated towards convenience stores. Today, a lot of younger shoppers are using convenience stores as almost like a quick service restaurant replacement of sorts with some of these convenience stores having strong programs within prepared food. So I think what we’re seeing is that it is really attractive to these younger shoppers. And to be honest, I think historically it always has been no matter the generation.

But I think what we’re seeing is that younger shoppers tend to skew more towards certain categories that these stores as a total channel specialize in. You’re hard-pressed to find greater energy drink sales than outside of the C-store channel. One of the key indicators for why they are so successful in attracting younger shoppers has to do with their assortment and offering a level of convenience that allows them to get in and get out easily.

Q: What is leading to more traffic from higher-income shoppers?

A: There has been a shift from prepandemic until now, and that is a high percentage shift of the workforce that is either working fully at home or hybrid. This provides the higher income shopper more opportunities to walk inside a C-store and pick up a snack or beverage.

Q: From a category standpoint, as C-stores look for growth in private label, are there certain categories that should be their focus?

A: I think the ubiquitous categories such as nuts and water are where you start. However, innovation is another really critical play for many retailers, specifically with the regional retailers where they have distribution challenges. So private label can really offer an opportunity to drive innovation and develop into the white space or fill a gap that is currently not served at their retailer today.

It is also critical as C-stores are developing private brand programs to think beyond the national brand equivalent. They need to strategically lean into private label with a strong program and strategy that is focused on innovation. Having national brand equivalents is not going to drive newness and excitement the same way that innovating will.

Q: How should convenience stores merchandise and market their private label assortments to drive attention to their assortment?

A: It’s critical for C-stores to really know their customers. For example, a candy set that works in one part of the country may need to be set differently in another part of the country. Understanding consumer differences from a regional basis is important to think about when developing a merchandising plan and product strategy mix.

On the product side, I would suggest leaning into flavor innovation. At Daymon, we have seen some bestin-class C-stores with strong private brand programs that are really innovating with flavors. Developing headturning, bold flavors for younger shoppers will drive newness and excitement.

Q: Is there an opportunity for convenience stores to use private label programs to expand into categories they currently do not offer?

A: C-stores have gotten a lot better at identifying opportunities for growth. For example, the health and wellness segment and offering betterfor-your options are just a few that provide new opportunities to connect with consumers.