The introduction of Casey’s Rewards this fall will mark the first loyalty program for the Casey’s convenience store chain and will utilize many state-of-the-art features found in leading retailer customer loyalty plans. Indeed, the more than 2,000-unit chain is joining a growing field of c-store operators that have found consumer loyalty programs are vital tools to retain regular customers, grow basket size and recruit new guests. “Customer loyalty programs and the data they generate play a critical role for retailers,” said Art Sebastian, vice president, digital experiences at Casey’s. “It’s also something that has become expected by consumers.”

According to retail loyalty program experts, approximately two out of every three c-stores offer a frequent guest package of some sort. Those programs range in depth and features, though, running the gamut from basic points-earning plans to app-based platforms and private-label debit cards. “Loyalty is a huge topic within the industry,” remarked Gray Taylor, executive director of Conexxus, the NACS partner organization that sets standards and works to reduce the burden of technology issues for convenience retailers and their suppliers.

57% of loyalty members go inside the store each time they fuel up, compared with 33% for non-members.

To be sure, c-store loyalty plans are on the rise. In 2018, 33% of consumers reported being members of a c-store rewards or loyalty program, up from just 8% in 2009, according to the NACS Convenience Tracking Program (CTP). And they’re a loyal group. A recent report from PDI, which provides enterprise management software for c-stores, found that most members of c-store loyalty plans engage with the programs at least once a week. Moreover, 57% of loyalty members go inside the store each time they fuel up, according to PDI, compared with 33% for non-members.

When it comes to spending, loyalty members are coveted customers. PDI found that members of c-store loyalty programs spend one-third more than non-members. “Customers that sign up for retailer loyalty programs tend to be more engaged with the retailer than those who don’t,” remarked Dafna Gabel, senior vice president, insights and strategy at SwiftIQ, a NACS partner that provides analytics solutions for retailers. “And customers who are more engaged tend to have bigger baskets.”

Room for Growth

Despite the inroads made by c-stores in implementing customer loyalty incentives, experts still believe there’s plenty of room for growth. Taylor and Gabel noted that c-store loyalty programs are typically newer offerings than those promoted by large grocery and mass-marketing chains. “They’re nascent,” said Taylor. “The c-store industry has a long way to go” to rival loyalty programs available in other channels. To get there, “there must be a process of constant improvement to drive value,” the Conexxus executive said.

“It takes time to grow a loyalty program,” Gabel conceded. But the SwiftIQ executive also sees opportunity for c-stores to better promote their frequent shopper plans. “While certainly not universal, I’ve found in my own experiences that there’s not a big push in c-stores for customers to join loyalty programs,” she noted.

Charlie Lang, chief product officer at Koupon Media, which connects retailers with CPG brands to launch digital promotions, said that unlike other channels, c-store loyalty members “don’t swipe with every transaction.” That’s typically because there’s no incentive to do so. Each transaction without a customer loyalty swipe, however, provides less data on that consumer for the retailer. To encourage swipes at each visit, Lang recommended features such as coffee programs, where members may purchase nine coffees and get the tenth for free. Each loyalty scan provides “richer data” for c-stores, he noted.

From a back-end perspective, we’re able to see additional savings on credit card fees by processing these payments ourselves.

Win-Win Programs

Best-in-class loyalty programs benefit customers and retailers alike. According to Gabel, c-stores with effective loyalty plans “are providing meaningful incentives and meaningful engagement.” While fuel rewards and points for in-store purchases are great incentives, there is also opportunity for customers to receive other content that’s relevant to them, she noted. In addition, c-stores with effective loyalty programs “are garnering insights about their customers’ behavior,” Gabel continued, “and trying to get to know them better.”

Koupon Media’s Lang believes that when building loyalty programs, “retailers need to meet customers where they are. Our technology platform delivers mobile offers to customers across a variety of channels” and augments loyalty programs, tying in a host of in-store products, ranging from beer and soda to snacks and candy. Lang noted that CPG marketers have found loyalty tie-ins to be effective, and they’re willing to support them in the important c-store channel. Some 40,000 stores comprise Koupon Media’s c-store network, and the company measures more than three billion c-store transactions a year.

App-based loyalty programs are among the latest developments at leading c-store chains. Loyalty members at Sheetz, Kum & Go and Cumberland Farms, for example, receive discounts at the pump for using the apps, among other benefits. Westborough, Massachusetts-based Cumberland Farms launched its latest loyalty app in July, which, among other incentives, awards members with free beverages or a slice of pizza for every 60 gallons of gas purchased with the app.

Casey’s Rewards, meanwhile, will differ from that of other c-store loyalty programs, Sebastian said. “We’ll put customers in control of how they’re rewarded,” he explained. “While our competitors’ programs enable consumers to earn a free fountain drink or a slice of pizza, our customers will have more choices for how they can use their rewards,” and they can opt to use them for fuel discounts or for “Casey’s Cash,” which can be spent in-store. The app-based program, which will  be integrated with Casey’s e-commerce platform, also will introduce “a way for customers to give back to their community,” Sebastian said. The c-store executive is optimistic that the new customer loyalty program will be a success, noting that Casey’s already has more than three million customers identified in its database.

Payment Options

In addition to app technology, c-stores are increasingly linking payment features to their loyalty programs. Private-label debit options link the merchant directly to the card—unlike bank debit cards—with no interchange fees, explained Kristen Bailey, chief marketing officer at ZipLine Inc., a provider of payment programs. With no fees to pay, merchants are then able “to push rewards to their customers,” Bailey noted.

Kwik Trip’s Rewards program, for example, launched last year, features a base program, as well as an upgraded version—Kwik Rewards Plus—that integrates the chain’s proprietary credit and debit cards for added benefits. “Members have the opportunity to participate in Kwik Rewards either with a non-payment card or by utilizing a single card to process loyalty and payment with a single swipe,” said David Jackson, digital marketing and loyalty manager at the more than 650-unit chain. The Plus program provides unique benefits to members and to the chain. “Members who participate in the Kwik Rewards Plus program enjoy a number of benefits, including a discount at the pump, as well as in-store savings,” Jackson noted. “We regularly see that these benefits result in an increased spend and frequency when compared to other guests at our stores. From a back-end perspective, we’re able to see additional savings on credit card fees by processing these payments ourselves.”

Cumberland Farms’ new loyalty and payment app, meanwhile, gives users two payment options—its already established SmartPay Check-Link private-label feature or a prepaid account (with a minimum $25 load) linked to a credit or debit card, similar to Starbuck’s Rewards payment platform. Like other c-store loyalty programs that provide fuel incentives, SmartPay members save 10 cents per gallon of gasoline every day; members with the prepaid account save 10 cents per gallon for the first 30 days of enrollment. Indeed, according to the PDI report, fuel savings is the No. 1 motivation for c-store shoppers to join a loyalty program.

You don’t want your program to be loaded with friction. It has to be easy to use.

The Personal Touch

Just as consumers find value in c-store loyalty programs, retailers also are reaping the benefits. ZipLine’s Bailey said some c-stores do segmentation analysis on the data gleaned from loyalty programs, grouping like behaviors into clusters, such as time of day, products purchased and card-based purchases versus mobile. For Kwik Trip and Casey’s, the data allow them to personalize offers and communications with members. “We want to provide incentives and perks that are relevant and rewarding to each member, and we utilize the data coming in from Kwik Rewards to do that,” remarked Jackson. Sebastian added that Casey’s Rewards data “will give us a better understanding of what people are buying, when, and what triggers the purchase, but we’ll also be able to personalize the experience. It’s an opportunity to build a deeper relationship with our customers.”

While loyalty programs provide numerous benefits for retailers, establishing, maintaining and upgrading the plans can be challenging. “The biggest challenge is the technical integration,” Conexxus’s Taylor remarked. “You don’t want your program to be loaded with friction. It has to be easy to use.” Bailey noted that for retailers just implementing a loyalty program, “it’s a highly competitive environment; everyone is trying to differentiate.” Still, she added, smaller convenience retailers shouldn’t be deterred. “There’s so much opportunity to embrace what is unique about them,” whether it’s the role they play in the community or a well-regarded foodservice program.

There’s no question that c-store loyalty programs will continue to evolve and become important tools for retailers and their guests. Koupon Media’s Lang said “tremendous technological advances in the next five years” would result in more integrated and better mobile programs, more CPG tie-ins and payment components. Kwik Trip’s Jackson added that personalization of loyalty programs will continue well into the future, and that personalization will expand “outside of just a digital presence with offers but into the actual experience at the store.” That will in turn shift the focus of rewards programs as discount engines into in-store experiences for customers, he said.

Casey’s Sebastian said loyalty programs would remain critical for convenience retailers. “Loyalty is the lifeblood of the business,” he remarked. “We need to meet the needs of our customers.”