Convenience & Energy and the Growth of Subscription Services

This article originally appeared on Rebar Technology’s blog which can be found here. Rebar Technology is a division of W. Capra Consulting Group offering solutions for recurring billing and revenue.

Subscriptions are everywhere you look, including places where subscriptions haven’t traditionally been leveraged, such as fast-food chains and movie theaters. Convenience stores (C-stores) and energy retailers are no exception. There are many reasons for the growth of subscription services. For consumers, they are a great way to buy into exclusivity, taking advantage of their favorite places, products and activities, often at a lower overall price point. For retailers, subscriptions provide increased, longer-term loyalty while leading consumers up the value chain, encouraging them to add additional items to their carts or accounts. Often those upsells can bring much more value than the subscription itself.

Why Subscriptions Matter

According to Convenience Store News, the average consumer spends $640 a year on subscriptions, and that number is increasing. Grocery subscriptions in particular have seen a 45% year-over-year growth, and more than one-third of Americans feel that the number of subscriptions they hold will increase over the next two years.

Subscriptions can be attractive to many types of businesses, including convenience and energy retailers. In 2019, consumers were already making fewer stops to refuel, meaning fewer convenience store visits. The growth of electric vehicles to a forecasted 30% of all new car sales by 2030 will continue to accelerate this trend. Subscriptions can create loyalty that drives repeat fuel purchases, helping C-stores corner more of the shrinking fuel market, while added inside sales from new subscriptions can help offset the loss of fuel pump revenues. Inside and outside transactions are both critical to C-stores’ continued success, which in turn affects the viability of the overall fuel economy, from individual stores to regional chains to major oil companies.

The growth of subscription services can be seen throughout the C-store industry, from food to gas. The options are nearly limitless, and recent examples include:

  • Cumberland Farms Coffee Cup-Scription
    Customers get up to two cups of coffee per day, every day, for $25 per month.
  • Circle K Sip & Save
    For $5.99 per month, shoppers get one beverage per day, up to a 64 oz. cup. Also, they have had a successful car wash subscription program for years.
  • 7-11 7NOW Gold Pass
    This new offering provides customers free delivery of in-store items, typically in about 30 minutes, for $5.95 per month.
  • Sheetz Fryz Subscription
    For $9.99 per month, customers can get a free bag of “fryz” every two hours.
  • BPme Rewards Price Match
    For $0.99 per month, BPme Rewards members can subscribe to an optional service that scans nearby gas stations’ prices when they buy fuel at BP. If a lower price is found, the subscriber receives a discount (up to 5 cents per gallon) on their next fuel purchase.
  • RaceTrac Rewards VIP
    Drivers pay $2.49 per month to save 10 cents per gallon on their first 40 gallons of fuel purchased and 3 cents per gallon afterward.

Added Sales

Subscriptions are particularly beneficial because of the added sales they can generate, as shown by the great success Panera has experienced with their coffee subscription plan.

In 2020, Panera began to offer unlimited coffee and tea subscriptions to their customers for $8.99 per month. However, the pandemic lessened in-store purchases, putting a dent in their coffee subscription sales. So they took a different tack, declaring a #FREECOFFEE4SUMMER promotion, where anyone who signed up for their free loyalty program could get free, unlimited coffee all summer long, and a free refill once every two hours. Not only did this promotion double their daily customers, but Panera saw a 70% increase in food attachment sales from subscribers. Panera described the results as a “staggering” success.

Said Eduardo Luz of Panera; “Every time you increase traffic to our cafes or to our app or virtually or digitally, you increase your chances of cross-selling something.”

Rebar, W. Capra and the Growth of Subscription Services

While subscription plans can be great profit centers, implementing them isn’t simple. Factors such as pricing and bundling, consumer enrollment, benefit redemptions, renewals, payment collection, and more need to be vetted and implemented carefully.

There is no better pairing than W. Capra Consulting Group and Rebar Technology to help bring C-store subscription programs to market. Our subject matter expertise and decades of experience in the areas of recurring programs and convenience and energy retailing make us your perfect partner.

W. Capra was founded by former convenience and energy industry executives, leveraging extensive experience and leadership in identifying, integrating and delivering technology solutions for the convenience and energy space. As an expert in the growth of subscription services, our organizations work closely with C-stores, as well as businesses in a wide range of industries, to help them implement and then optimize their subscription programs.

We can do the same for you. Contact us at info@wcapra.com to learn more.

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