Is Dynamic Pricing the Silver Bullet for C-stores? | Convenience Store News

The retail environment for convenience stores has never been more challenging and the list of influences that can negatively impact profitability is growing. Although convenience stores are known for providing speed and convenience, today’s shoppers are more price-sensitive, have complete price transparency, and are becoming more resistant to paying a premium price.

According to Nielsen, only 44.2 percent of convenience channel shoppers are willing to pay a premium price, ranking last behind grocery, club, drug and mass. With price being one of the highest influencers, it’s not surprising that use of price optimization within convenience stores is nothing new. Many convenience stores jumped on that bandwagon over a decade ago, and the pace at which more convenience stores globally are climbing aboard is at an all-time high.

Convenience stores are heavily dependent upon drivers for in-store traffic. The percentage of 18-year-olds with drivers’ licenses has declined from 87 percent to 69 percent over the past 30 years, and the number of trips is down more than 1 million since 2012, according to Nielsen.

In addition to the decline of in-store traffic and a price-sensitive shopper, the competitive threat against convenience stores becomes more hostile as retail channels become more blurred due to the growth of e-commerce, easy pickup and delivery options, and the growing trend toward smaller store formats, directly competing for the same shoppers.

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Is Dynamic Pricing the Silver Bullet for C-stores? | Convenience Store News.