Shopper behaviour in Convenience & Petroleum

and how to leverage itfor improved merchandise purchase incidence

September 2007

The merchandise incidence opportunitySource AACS 2007You can increase incidence by increasing relevance play to occasions and dayparts

Contents

1. Shopper daypart occasions

2. Execution by C&P channel segment: Segment shopper behaviour variances What to do about it visibility and merchandising, space & layout, persuasion and service

1. C&P shopper occasions by daypart

Daypart occasions: Monday-Friday6am12mid12noon9am9pm6pm3pmDrive timeBreakfastAM breakHealthy snackLunchPM TreatIncl post-schoolDrive timeDinner prepDinner on the runSnacks to stay in/DVDLate night munchiesEmergency runs

Daypart occasions: Weekends6am12mid12noon9am9pm6pm3pmNewspapers Bread & milkChores petrol, car wash,Tyres, auto careEmergency party pickups Ice, softdrinksDinner prepCool down (summer) Ice cream, FCBSnacks to stay in/DVDLate night munchiesEmergency runs

Executing dayparts: some whatsSnacksMeals Meal Solutions Bundles eg mains + desserts + drinksRange ready to eat mealsRange fresh fruit & vegBundle confec/snacks & bev++++

Executing dayparts: some howsMealsQueue Merchandising Offlocation DisplaysOpportunity for cross category occasion promotion in forecourts?!By daypart portable wheel-in-wheel-outsSame 1-2 units, restocked with different itemsInterchangeable header cardsGondola ends and in major traffic pathwaysEg between back of store fridges and counterOccasion or daypart based, ideallySpecific area of store, clearly signed

2. Channel segment execution: key missions

The major missions they change by daypartTreat

Meal

Craving

Express top up

Services

Emergency

DestinationThe overall priority of these also varies a bit by channel segment, well address this later

Convenience Only Dual C&PPetrol OnlyInner city Suburban stripsApartment developmentsTier 1 and Tier 2Major arterial roads and highwaysTier 3SuburbanSome arterial roadsShopper behaviour changes by channel segmentMore likely to be:

Convenience Only Shoppers

Who?Dominated by male adults living at home or CBD professionalsBoth low and high incomesBut more females in 7ELEVEN than other bannersWhy? MissionsMeal, Treat, Express Top Up, Craving, Emergency itemsWhen?Primarily evenings after 5pm, afternoonHow?Shop alone, may be buying for self or otherAround 7 minutes in storePlanned purchase but easily influencedWhat? CategoriesMany buy drink only (opportunity!)Around a quarter buy fresh mealsUp to a quarter buy snacks & confec= dominated by food & beverage categories and Telco also sells well

Dual C&P Shoppers

Who?Dominated by male older adult workers (including tradies and truckies)Middle incomeWhy? MissionsService, Treat, Craving (thirst, hunger), Meal (lunchtimes), Destination (milk, bread, newspapers)When?Primarily lunchtimes, drive times (6-9am, 4-7pm)How?Shop alone, buying for self Around 6 minutes in storePlanned purchase but impulse purchases alsoTwo thirds straight to the queue after fuel refillWhat? CategoriesOnly around 3 in 10 shop rest of store (opportunity!)Drinks, snacks / treats and auto (oil etc.)

Petrol Only Shoppers

Who?Male younger adultMiddle incomeWhy? MissionsService, Craving. Meal if travelled long distance (regional petrol station)When?Before 9am, 2-5pm

How?Shop alone, buying for self Less than 6 minutes in storeVast majority straight to the queue after fuel refillImpulsive purchases in merchandised queue

What? CategoriesMainly drinks and auto, some confec / snacks

Shopping occasions change priority by channel segmentHalf of needs are food! Service here includes internetLocal alternative to supermarketConvenience Only Dual P&C More impulse purchasesOn the way to somewherePetrol Only Tap into the service need.The basics.TreatMealExpress top upEmergencyDestinationServicesCravingServicesTreatDestinationMealCravingEmergencyExpress top upServicesCravingDestinationTreatEmergencyMealExpress top up

Convenience OnlyWalk in, not driveMeals, Express top up, EmergencyHigher incomesSome frequent localsRange: rte meals, emergency categoriesRange all food and grocery categories for top-up shopsMeals destination in storeSign whats new for the localsEnsure telco offer is visibleStaff incentives around basket size increase promotions eg drink + something elseVariation/EmphasisImplicationExpress Top UpMiniMart opportunity: Multiple brands per categoryAisles with category headersSpecials promoted on exterior of storeEmergency Category headers to make emergency purchases easy to find

Dual C&PVariation/EmphasisImplicationQueue paramountTradies and truckiesMeals and servicesMilk, bread, newspapersMerchandise destination items in the queue messaging and POS by daypart/occasionTradies and truckies lunch dealsDestination meal area of storeTotal Services offer for women oil, water, tyre checks with while-u-wait coffee and car washServices Increasing service portfolio drives frequency and destination:DVD rentals (since theyre there for snacks anyway!)LotteryDry cleaningPhoto processing

Petro OnlyVariation/EmphasisImplicationThe basics expected, anything else a bonusAll about autoServices and cravingsYounger shoppersMerchandise destination items in the queue messaging and POS by daypart/occasionAuto care products merchandised in the queue, staff persuasion for add on sales coolant, oil etcServices for women oil, water, tyre checksTelco products merchandisingDrinks biggest opportunity/craving ensure coolers in queue/front of storeEnsure basics covered adequate lighting, clean, uniform fixtures, merchandised queue, and shoppers can see in!

Services Driveway service (for women):Water, oil and tyre checks etc (at a fee!)Cross promote with while-u-wait coffeeApplies to Dual C&P also

SummaryLeverage natural shopper occasions and dayparts

Make it easy for them overdeliver on solutions

Tailor execution by channel segment.

Questions?Norrelle GoldringM: 61-411-735 190E: norrelle@moxiemarketing.com.au

3 Burton StLinley Pt NSW 2066P: 61-2-9427 7473W: www.moxiemarketing.com.auLee McAllistairM: 61-414 941 585E: lee@moxiemarketing.com.au

Thank You.

*Breakfast supported by the growth of Cereals in the Convenience ReportEvening drive/dinner prep dinner at my home or someone elses home, includes dessert. Pre-dinner snack?Emergency runs: milk, bread, toilet paper, condoms. Stuff I need now or for the morning.*Tobacco not addressed even though is biggest value merch category because cant merchandise it other than behind counterCommunication the OCCASION on the point of sale eg PM Revival*Tobacco not addressed even though is biggest value merch category because cant merchandise it other than behind counterRecognise that current promotional programs means cant change by daypart unless decided to do a promo based on dayparts! Need to COMMUNICATE that there is more to convenience than soft drinks and junk foodDont just play to generic impulse, make sure that whats merchandised in the queue is what theyre most likely to buy at that time of day*Shoppers shop the channel segments differently!GEODEMO CHANGES/INNER CITY VS ARTERIAL?*Meals, treats & quick trips focus on drinks & treats. Service focus on auto.Service also includes services such as ATMs, tyre pressures, check oil etc*Create destination store for top-up and COMMUNICATE it at site (exterior) and in ATL make people aware this is your offer*How can suppliers help retailers with daypart queue merchandising?Destination products merchandised in queue eg milk, bread

*Leverage the fact that Petro Only are renowned for having car workshops and are therefore auto care destinations