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This podcast is for multi-unit managers and independent owners striving to scale their success and widen the scope of their success and impact. Together we will strive to get you to the top of the mountain.
Market Research Made Simple: A Guide for Convenience Store Owners
Hey there, store owners! Welcome back to Arrive – your weekly guide to building a thriving convenience store business. I'm your host, Mike Hernandez, and today, we're diving into something that might sound fancy but is a game-changer for stores like yours: market research. But don't worry – we're keeping it practical, actionable, and specifically tailored for independent convenience store owners.
Before we begin, let me share a quick story about Pat, who owns Quick Stop Market in Cincinnati. Two years ago, Pat struggled to keep up with the new chain store that opened nearby. Her sales were dropping, and she was seriously considering selling the business her family had run for twenty years.
But instead of giving up, Pat decided to really understand what was happening in her market. She spent two weeks simply talking to her customers and taking notes about their shopping habits. She discovered something fascinating – while the chain store was winning on soft drink prices, her store had a large number of third-shift workers who needed fresh, ready-to-eat meals between 11 PM and 4 AM. The chain store closed at midnight.
Pat revamped her fresh food section and extended her hours. Within three months, her late-night sales doubled, and today, her store is doing better than ever. That's the power of understanding your market.
That's exactly why market research matters for stores like yours. Look, I know you're competing with everything from dollar stores to delivery apps these days. The convenience store landscape has changed more in the last five years than in the previous twenty. But here's the thing—being independent actually gives you an advantage. You can adapt quickly, make decisions on the spot, and really dig into what your specific neighborhood needs.
In the next 30 minutes, I'll show you how to do exactly what Pat did—and more. We'll cover everything from analyzing your current customers to scoping out competition, and I'll share some digital tools that make this whole process easier. The best part? Most of these techniques won't cost you a dime.
So grab a coffee, take out your notebook, and let's turn your local knowledge into your secret weapon.
Understanding Your Current Customer Base
Now, let's talk about the goldmine of information you already have in your store——your current customers. The beauty of being an independent owner is that you're right there on the front lines. You've got access to data and insights thatthat corporate executives would kill for. Let's make the most of it.
First up – your POS system. Some of you might be thinking, "It's just a cash register," but trust me, it's your secret weapon for understanding your business. Here's what you want to do:
At the end of each week, pull up your hourly sales reports. Look for those peak hours – when are you absolutely slammed? When could you hear a pin drop? One of my clients discovered that while his morning rush was strong, he was missing out on major afternoon business because his hot food station closed at 2 PM. Meanwhile, the factory across the street had shift changes at 3 PM. Simple fix, big results.
Next, dive into your product categories. Your POS isn't just tracking dollars – it's telling you a story about what your customers actually want. Sort your sales by category and look for surprises. Are energy drinks outselling soda? Are your prepared foods moving faster than packaged snacks? This isn't just interesting data – it's your roadmap for stocking decisions and future promotions.
But here's where it gets really interesting – watch those patterns across the week. Maybe your Monday morning coffee sales could support adding another coffee machine. Or perhaps your Friday night snack rush means you need to adjust your chip aisle layout.
Now, let's talk about something that's equally important but often overlooked – actually watching and talking to your customers. I call this the "eyes and ears" approach.
Start with a simple customer counting system. It doesn't need to be fancy – a basic tally counter or even a notebook will do. Count customers during different hours and days. You might find that while your Saturday afternoon sales are decent, you're actually getting twice the foot traffic but with smaller purchases. That's valuable information about pricing and merchandising opportunities.
Here's a pro tip that's worked wonders for many store owners: Keep a small notebook behind the counter. When you notice something interesting about shopping patterns, jot it down. Maybe you see customers consistently checking for a product you don't carry, or perhaps they're struggling to find something that's in stock. These observations are pure gold for improving your store layout and inventory.
Now, let's talk about the art of casual conversation. You're not conducting formal interviews here—you're just chatting with your customers. Ask them how their day is going, what brings them in, and if they found everything they needed. These natural conversations can reveal more than any formal survey.
Speaking of surveys – yes, you should do them, but keep them super simple. A jar of business cards with three quick questions and a monthly gift card drawing can tell you tons about what your customers want. Questions like "What's one product you wish we carried?" or "What's your favorite time to shop here?" can lead to real insights.
Analyzing Your Competition
Let's shift gears and talk about something that might make some of you uncomfortable – your competition. I know, I know, just hearing about that new chain store or gas station can raise your blood pressure. But here's the thing: knowing your competition isn't about stress but opportunity.
Let's start with something simple but powerful: mapping your competition. Grab a paper or your phone, and mark every competing business within a mile of your store. I'm not just talking about other convenience stores – gas stations, dollar stores, pharmacies, small grocery stores, and anyone competing for your customers' dollars.
Here's what most store owners miss: each competitor is actually showing you an opportunity. Take Mike from Portland. He mapped his area and realized something fascinating. Sure, there were three other convenience stores nearby, but they were all focusing on the same thing: snacks and drinks. Meanwhile, his neighborhood had zero places to grab fresh coffee and breakfast sandwiches before 7 a.m. He saw the gap and filled it. Today, his morning sales make up 40% of his daily revenue.
Now, let's discuss understanding your competitors' strengths and weaknesses. But—and this is important—we're not doing this to copy them. We're doing this to find what they're missing. Think of it like a puzzle where each store fills certain pieces, and your job is to find the empty spaces.
This brings us to mystery shopping – and yes, it's exactly what it sounds like. You're going to visit your competitors but with a purpose. Let me be clear: this isn't about industrial espionage. You're just being a normal customer, observing things anyone can see.
Here's your simple checklist for competitor visits:
• Note their hours and peak times
• Check their product selection and prices on key items
• Observe their customer service
• Look at their store layout
• Pay attention to any special services they offer
Let me share a quick story about ethical competitor research. Janet in Houston was worried about checking out her competition until she realized she was overthinking it. She simply visited each nearby store as a customer once a month, bought something small, and took mental notes. There was no sneaking around, no hiding who she was—just being a regular customer. The insights she gained helped her adjust her pricing on key items and identify several services her competitors weren't offering.
Speaking of pricing, let's discuss strategy. You don't need to match every competitor's price on every item. Instead, focus on your 'signal' products—those items customers use to judge whether your prices are fair. For most stores, that's things like milk, bread, soft drinks, and maybe cigarettes. Keep those prices competitive, and you have more flexibility on other items.
A word about ethics and legality: Keep your competitor research above board. Do not harass their employees for information, take photos inside their stores without permission, or mislead anyone about who you are. You're not a spy—you're a business owner doing your homework.
Remember, the goal isn't to copy your competition—it's to understand your market so you can better serve your customers. Sometimes, the best opportunities are hiding in plain sight, right in the gaps your competitors are leaving open.
Digital Research Tools
I know some of you might be thinking, "I'm a convenience store owner, not a tech expert." But stick with me here – the digital tools I'm about to share are surprisingly simple and completely free. They're like having a market research team right in your pocket.
Let's start with something you probably already use – Google Maps. But here's the trick: don't just look at it as a navigation tool. Pull up your store's location and hit that "Popular times" graph. It shows you when people are most active in your area. One store owner in Atlanta noticed a huge spike in area foot traffic during lunch hours at a nearby office park – something he'd completely missed. He started stocking fresh sandwiches and salads, and lunch became his most profitable time slot.
Social media isn't just for cat videos, folks. Facebook and Instagram can tell you exactly what's happening in your neighborhood. Join your local community groups. Watch what people are talking about. Are they complaining about not finding certain products? Is there excitement about a new apartment complex being built? That's pure market intelligence, served up for free.
Here's a game-changer many store owners don't know about: your city or county probably has free demographic data online. Search for your city's "open data portal" or "census tract data." You can find out the average age, income, and household size of people within walking distance of your store. One owner discovered her neighborhood had twice as many senior citizens as she thought – she added a reading glasses display, and it became one of her highest-margin sections.
Now, about those mobile apps – don't worry, I'm not going to tell you to download twenty different things. Start with just one: your state's lottery app. Why? Because it shows you exactly which games are popular in your area. Then maybe add a price comparison app like Basket. You don't need to check every price, but it helps to know if your key items are in the ballpark.
Let's talk about reviews—they're like having customers tell you exactly what they think, for free. If you haven't already, set up your Google Business Profile. It takes about 15 minutes and is one of the best moves you can make for your store's visibility.
Here's a pro tip about handling reviews: respond to every single one, good or bad. But here's the key – you're not just responding to that one customer. You're showing everyone who reads the reviews later that you care about customer feedback. Keep responses professional, thank people for positive reviews, and address negative ones with solutions, not excuses.
Set up a simple system for tracking competitor reviews. Once a month, spend 15 minutes reading recent reviews of nearby stores. What are customers complaining about? What are they praising? Each complaint about a competitor is a potential opportunity for your store.
Let me share what Carlos in Miami did with review insights. He noticed repeated complaints about long lines at the chain store down the street. His solution? He added a second POS system and put up a sign: "No Wait Time - In and Out in 3 Minutes or Less." His customer count jumped 20% in two months.
Remember, all these digital tools are just that – tools. They don't replace your experience and instincts; they enhance them. Use what works for you, and don't feel pressured to do everything at once. Start with one tool, master it, and move on to the next.
Practical Implementation
Now comes the part that really matters – turning all this research into actual results. I've seen too many store owners collect great information and then feel overwhelmed about what to do next. So, let's break this down into simple, manageable steps that won't eat up your already busy schedule.
First, let's talk about collecting data without driving yourself crazy. You don't need fancy software – a basic spreadsheet will do just fine. I'm going to share what I call the "5-minute system." At the end of each day, take five minutes to record three things: your best-selling item, your biggest surprise (good or bad), and one customer comment that stuck with you. That's it. Do this for a month, and patterns will jump out at you.
Here's what Lisa in Denver did: She kept a small notebook by each register and asked her staff to jot down customer requests for products they didn't carry. After two weeks, she noticed eight different people had asked for local craft beer. She added a small craft beer section, and it now accounts for 15% of her beverage sales.
Now, about that customer feedback box – make it work for you. Don't just put out a generic suggestion box. Ask specific questions that change monthly. "What product would you like us to carry?" "What's your favorite time to shop here?" "What could make your shopping experience better?" Make it easy – three choices plus an "other" option. Offer a monthly drawing for a $25 store credit to encourage participation.
Your smartphone is probably your most powerful research tool. Take photos of your store displays before and after changes. Record quick voice notes about what you observe during busy periods. Use your phone's notes app to track competitor prices on key items. One owner I work with takes a quick photo whenever she tries a new product display. After six months, she could literally see what worked and what didn't.
Now, let's talk about turning all this information into action. Here's a simple framework I want you to use. For every piece of data you collect, ask yourself three questions:
1. What's this telling me about my customers?
2. What's one small change I could make based on this?
3. How would I know if that change is working?
Let me give you a real example. Tom in Chicago noticed his coffee sales data showed a drop between 9 and 10 AM. The change? He started brewing fresh coffee at 9:15 instead of waiting until the pot was empty. Small change, big impact – his mid-morning coffee sales went up 40%.
About timelines—this is crucial. Don't try to change everything at once. Pick one thing per month to focus on. Maybe January is your coffee section, February is your snack aisle, and March is your checkout display. Give each change at least three weeks before you judge the results.
Here's how to measure impact: Set a clear "before" number. Maybe it's daily sales in a category, customer count during certain hours, or the number of items per transaction. Then, track the same number after your change. Keep it simple – pick something else to track if you can't measure it easily.
Now, when should you adjust your strategy? Watch for these signals:
• Sales drop more than 10% in any category
• Multiple customers mention the same issue
• A competitor makes a major change
• Your gut tells you something isn't working
Remember what Rachel in Houston did when her energy drink sales suddenly dropped? She checked her competition and found the gas station down the street was running a huge promotion. Instead of trying to match their prices, she bundled energy drinks with fresh breakfast sandwiches – something they couldn't offer. Her overall morning sales actually increased during their promotion.
The key to making all this work is staying flexible. You're not carving these changes in stone—you're writing them in pencil. Be ready to adjust, but always give your changes enough time to prove themselves before you change things up.
Conclusion and Next Steps
Alright, store owners. We've covered a lot of ground today, so let's bring it all together. You've learned how to be a market researcher without taking time away from running your store. Remember, this isn't about becoming a data scientist—it's about making smart decisions for your business.
Let's recap our key takeaways: First, your POS system is a goldmine of customer insights—use it. Second, your competitors aren't your enemies; they're showing you opportunities. Third, free digital tools can give you insights that big chains pay thousands for. Finally, small, consistent changes based on real data can transform your business.
Let me save you some headaches by mentioning what not to do. Don't try to compete on every product price – focus on your key items. Don't make multiple big changes at once – you won't know what's working. And please, don't ignore your regular customers while chasing new ones. They're your best source of insights.
Here's your homework for this week – just one thing: Start that five-minute end-of-day log we talked about. Best-selling item, biggest surprise, one customer comment. That's it. Do this for a week, and I guarantee you'll spot at least one opportunity you've been missing.
Remember, being an independent store owner isn't just about surviving – it's about thriving. You've got advantages the big chains can't match: you're closer to your customers, you can make decisions on the spot, and now you've got the tools to make those decisions count.
If you found today's episode helpful, subscribe to the podcast and visit cstore thrive.com for more insights, strategies, and updates. Keep testing, keep learning, and keep making your convenience store a place where customers want to shop. Until next time, happy merchandising!
Oh, and before I go, here are some questions for you to consider:
Assessment Questions for Market Research
Question 1: Scenario Analysis
Your convenience store's POS data shows that energy drink sales are highest between 5-7 AM, while the competitor down the street heavily promotes energy drinks during afternoon hours. How would you use this market research insight to create a competitive advantage?
Reasoning: This question tests the listener's ability to:
• Synthesize POS data analysis concepts from the episode
• Think strategically about competitive differentiation
• Apply the concept of finding market gaps
• Demonstrate understanding of how to turn data into actionable strategies
Question 2: Integration Challenge
You've collected three different types of data: customer feedback forms showing requests for healthier options, POS data showing declining chip sales, and foot traffic patterns showing an increase in morning gym-goers passing your store. How would you integrate these insights to make one cohesive business decision?
Reasoning: This question evaluates:
• Ability to connect multiple data points
• Understanding of how different research methods complement each other
• Skill in prioritizing and synthesizing information
• Strategic decision-making based on diverse data sources
Question 3: Resource Allocation
With limited time and resources, which three specific market research techniques from the episode would you implement first in your store, and why? How would you measure their effectiveness within the first month?
Reasoning: This question tests:
• Practical application of concepts
• Priority-setting abilities
• Understanding of resource constraints faced by small business owners
• Knowledge of success metrics and measurement techniques
Question 4: Digital Integration
A competing chain store just opened nearby with a sophisticated mobile app and delivery service. Using the digital research tools discussed in the episode, how would you assess the impact on your business and identify opportunities this creates?
Reasoning: This question examines:
• Understanding of digital research tools
• Ability to turn threats into opportunities
• Application of competitor analysis concepts
• Strategic thinking in a digital context
Question 5: Customer Insight Application
Your customer feedback box reveals that 60% of respondents want longer operating hours, but your POS data shows minimal sales during your current final hour of operation. How would you investigate this contradiction, and what additional market research steps would you take before making a decision?
Reasoning: This question evaluates:
• Critical thinking when faced with conflicting data
• Understanding of multiple research methodologies
• Ability to design additional research steps
• Decision-making process in complex situations
These questions foster deep thinking about the key elements discussed in the episode and how they can be applied to a real-world store environment.
Again, I'm Mike Hernandez. Goodbye, and see you in the next episode!
Arrive from C-Store Center is a Sink or Swim Production.