Retail Media Networks In Convenience Stores: A Good Marketing Idea? For Who? My Hot Take.

Is putting a radio station that YOU OPERATE inside your convenience store a good retail marketing idea?

Is operating a radio station and selling RMN ads on it in your "retail wheelhouse?"

Prove it to me.

What do your customers say about this?

You didn't ask them....? 

Uh oh.




Notes:
So here's the one question of the day for the convenience store CEOs and owners. The question is this: retail media networks, what are they? Are they a good marketing idea? Let's dive into it.

I was recently reading the convenience store dive newsletter, which I love and which I would highly suggest that everybody who listens to this podcast sign up and subscribe to. It's tremendous. It's very, very good. It's called C store dive and you can find it online.

Okay. So I've been reading about retail media networks, which are also known as radio stations inside the convenience store. They're not just a radio station, but a lot of it I think depends on audio and additional digital ads and things like that that are inside display that's inside a convenience store, and the C store dive newsletter goes into this. And there's three big chains recently that are looking at this:

1. Casey's - their radio network is called Casey's access.
   
   
2. Wawa - their network is called the Wawa media network.
   
   
3. 7-Eleven - they're doing it with gulp radio and gulp media. Love the name, by the way.
   
   

So how it works is this. You can either do it yourself, a radio station inside your store, or you can hire a third party to do this for you. And C store dive covers this, uh, talk about some of the vendors out there that do it. And so once you have your radio station as a retailer, you then charge the consumer package goods company for airtime on your radio station or display your digital ads at the point of sale. Cool. Got all that?

So basically you're getting into, if you're a retailer, you're getting into the radio station business and you're going to run radio stations. The idea there is to sell your ad time and have your ads running at point of sale to drive impulse purchases. Okay. So that's the, in a nutshell, that's what we're talking about here is the retailer getting into the radio station business.

Now part of this deal is that the retailer will turn over the first party data to the consumer package goods company. Uh, this is information that's collected at store level, I assume by loyalty cards, just as an example. So the central question I have on retail media networks or being in the radio business for retailers is, is this a good idea? Is it a good idea? And for who? 

So let's discuss that.

Um, and again, the question is, who's it a good deal for? Well, 

number one, it's certainly good for the consumer package goods company, especially when it comes to collecting first party data. Um, it's a very, I guess it's an efficient way to get that data and have access to it. So then you can turn around and use that first party data, uh, as even as you walk away from, uh, the retail media network. So the, the consumer package goods company, the CPG company has it, they use it as they see fit. So it's, it's good deal for them. That's number one.

Number two, it's certainly good for the retailers because this is new revenue for the retailer, even if they don't sell a single product out of this radio station that's inside their store. So it's just basically, uh, found money and it's extra revenue, uh, to them if they actually sell products as well. So at the point of impulse purchasing, that's, that's, it's kind of a win-win for the retailer.

Thirdly, it's good for the distributor, even though they're not really invo

http://conveniencemarketing.net/

Transcript

So here's the one question of the day for the convenience store CEOs and owners. The question is this: retail media networks, what are they? Are they a good idea? Let's dive into it.

I was recently reading the convenience store dive newsletter, which I love and which I would highly suggest that everybody who listens to this podcast sign up and subscribe to. It's tremendous. It's very, very good. It's called C store dive and you can find it online.

Okay. So I've been reading about retail media networks, which are also known as radio stations inside the convenience store. They're not just a radio station, but a lot of it I think depends on audio and additional digital ads and things like that that are inside display that's inside a convenience store, and the C store dive newsletter goes into this. And there's three big chains recently that are looking at this:

1. Casey's - their radio network is called Casey's access.
   
   
2. Wawa - their network is called the Wawa media network.
   
   
3. 7-Eleven - they're doing it with gulp radio and gulp media. Love the name, by the way.
   
   

So how it works is this. You can either do it yourself, a radio station inside your store, or you can hire a third party to do this for you. And C store dive covers this, uh, talk about some of the vendors out there that do it. And so once you have your radio station as a retailer, you then charge the consumer package goods company for airtime on your radio station or display your digital ads at the point of sale. Cool. Got all that?

So basically you're getting into, if you're a retailer, you're getting into the radio station business and you're going to run radio stations. The idea there is to sell your ad time and have your ads running at point of sale to drive impulse purchases. Okay. So that's the, in a nutshell, that's what we're talking about here is the retailer getting into the radio station business.

Now part of this deal is that the retailer will turn over the first party data to the consumer package goods company. Uh, this is information that's collected at store level, I assume by loyalty cards, just as an example. So the central question I have on retail media networks or being in the radio business for retailers is, is this a good idea? Is it a good idea? And for who? 

So let's discuss that.

Um, and again, the question is, who's it a good deal for? Well, 

number one, it's certainly good for the consumer package goods company, especially when it comes to collecting first party data. Um, it's a very, I guess it's an efficient way to get that data and have access to it. So then you can turn around and use that first party data, uh, as even as you walk away from, uh, the retail media network. So the, the consumer package goods company, the CPG company has it, they use it as they see fit. So it's, it's good deal for them. That's number one.

Number two, it's certainly good for the retailers because this is new revenue for the retailer, even if they don't sell a single product out of this radio station that's inside their store. So it's just basically, uh, found money and it's extra revenue, uh, to them if they actually sell products as well. So at the point of impulse purchasing, that's, that's, it's kind of a win-win for the retailer.

Thirdly, it's good for the distributor, even though they're not really involved in this directly, but there's more of a pull through for products if they are selling at retail level and the distributor benefits, even though they haven't participated directly in this program, but eventually somebody will find their way back to them. I'm sure.

Now, so that's good for a couple of folks in this, uh, in this exchange, but just for fun, I wanted to harken back before I talk about my point of view on this is there was a little book, little book that you may have heard of in 1982 called In Search of Excellence written by a guy named Tom Peters and Bob Waterman. And basically in that book, they talked about how X, the principles of excellent companies and how they're run. And in that book, they also talked about some things that retailers, uh, they, they, they talked specifically about some, some retailers. One of them was Stu Leonard's, uh, and how they use these principles of excellence to run their stores.

There were two principles that I want to touch on:

1. Stick to your knitting - the definition there was you are to remain with the business the company knows best. In Stu Leonard's case, it was the retail business.
    
2. Staying close to the customer - learning the customer's preferences and catering to them.
    

Now In Search of Excellence was one of the best-selling business books of all time. It's still apropos today. I would highly recommend you go on to Google and onto YouTube and look up Tom Peters and some of his presentations. They're tremendous and I think he was a tremendous thinker and presenter in the space.

So again, the central question here is, is the convenience retailer getting into the radio station business with a retail media network a good idea for the customer? That's my question. And the answer there is a resounding maybe. So let's discuss that a little bit more.

If you've gotten into this, into the retail media network, or you're thinking of it, you're going to put a radio station into your store. My question is, how do you know that that's a good idea for your customers? How do you know this? What's the data to support it? And 

I would ask a couple more questions which would be:

• Did you ask a sampling of your customers if they wanted this specific thing? And if so, what did they say to you?
  
  
• How exactly does this new radio station create value for the customer? Now you've got to be specific here for me to be satisfied. What did they say to you specifically? How does this add value to their day and to their world?
  
  
• How many people specifically did you ask? Did your customers approve of giving their first-party data to the consumer packaged goods company? And why did they think that that was a good idea?
  
  
• Another question here is, are they clamoring for even more offers coming out of their loyalty cards and the data that you're turning over to the consumer packaged goods company?
  
  

And I'm being a little snarky here, but do they really need more useless offers that are good, again, for the consumer packaged goods company, but not necessarily good for the customer? Do they really need more stuff in their phone or in their email that looks like spam? 

Let me just flip this question over to you. Are you craving more things in your inbox and on your iPhone that you didn't ask for? So why do you think your customers think this is a good idea? And why do you think if you didn't ask them, they would think this is a good idea?

The other question I would have here is, how are you going to create ads that don't sound like ads? I mean, you're trying to drive impulse purchases here, right? So the only way to really to do that that's good for the retailer and good for the consumer packaged goods company is it's got to sound like an ad if you're going to drive it at impulse. 

And is that the thing the customers want more of? Don't know. I'm answering this with a resounding maybe. But I'm challenging your thinking a little bit here. Did you really think this through the whole way from the customer's point of view?

And the other question I have here is, is more noise and stimulation inside the store something your customers are asking for? Or do you just want to force these ads down the throat of your customers at the point of sale? If you've asked some of these questions, I would challenge you to go back and if you haven't talked to your customers, 

I would challenge you to go back and ask your customers some of these questions. Because I think you really do need to stick to your knitting and you really need to stay close to your customer.

And my guess is your customers would be a little bit skeptical, a little bit sketchy, and a little suspect about what you're about to do. The reason why is it might be good for you, it might be good for the CPG companies, but it might not be good and something the customers really want right now.

And I would again challenge you to think through and this is one of my central premises of my book, which is the convenience store retail industry is one of the most passive industries in the United States, probably in the world. And one of the things that convenience retailers do is they air quote here, they wait for customers to come into their store.

And my challenge and my push back to retail media networks is this: why don't we first try to create more new and convenience value for the retail customer that comes into your convenience store first? Why don't we do that first? 

And then if we really think we need to go and find the low-hanging fruit and easy revenue from putting a radio station inside our store, then we can do that. But why don't we check the first box here, which is and I ask can do that but why don't we check the first box here which is and I ask you and you can certainly get back to me about it what new convenience retail value have you created for your customers in the last six months? Earth-shattering value, toe-curling value that makes you different and unique and valuable and solves convenience problems for customers in this category.

If you haven't done that you might want to just put a pause on the retail media network for the moment until you've kind of gotten your own house in order.

That's it. My name is Tim Lazar. I am the president of the convenience marketing group. You can reach us at conveniencemarketing.net. You can reach out to me; I'd love to hear your thoughts and stay tuned and we'll have more podcasts and TikTok videos in the future. 

Thanks for listening.