The Kids Are Alright - 7-Eleven Inc. stocks teen products to boost sales - Brief Article

Brandweek, April 2, 2001 by Kenneth Hein

With the rallying cry of "First, Best and Only," 7-Eleven wants to own the teen market this summer and jolt flagging sales by adding 80 new products and limited-time exclusives on teen-magnets from Gatorade and Mountain Dew.

Once known for discouraging kids against hanging out in its aisles, 7-Eleven is targeting trendy teens to help garner sales during what's shaping up to be a disappointing sales year. The shortfall in 2001 would follow two consecutive years of $1 billion sales increases.

7-Eleven, which boasts 6,000 stores in the U.S., will stock a bevy of first-day products: Moover's chocolate and strawberry milk co-branded with Major League Baseball (bowing April 15); Freshious Mint Films Peppermint candy from Ragold & Affair International (April 16); Looney Tunes Bellywashers (April 23); and Mountain Dew Code Red in 20-oz. and 1-liter packages (May 21).

Aside from just getting those products first, the chain wants to be known as a must-stop-shop for early adopters. More exclusives like the one it struck for Gatorade's new wide-mouth six-packs for April and May are also likely. "Our goal is to get customers to think of going to 7-Eleven first because they know we'll have the latest products," said Nancy Smith, vp-marketing at 7-Eleven, Dallas.

Teens play an essential part in the strategy. "We look at fads and trends and try and understand what is hot. We want to keep [teens] coming back," said 7-Eleven rep Dana Manley.

The retailer previously struck gold with products such as Pokemon cards, scooters and most recently prepaid cellular phones. "The whole key for them is to draw a different customer base aside from the cigarette and beer-drinking clientele," said Dennis Telzrow, retail analyst at Hoak Breedlove Weneski, Dallas.

While 7-Eleven is not planning a national marketing push to tout its "get it here first" strategy, Smith said, the fact that the chain regularly launches new products is not lost on teens.

However, Richard Leonard, vp at teen trend consulting firm, the Zandl Group, New York, doesn't think it's so simple: "Marketers have to invest a phenomenal amount to create that kind of awareness or demand."

To strengthen exclusive deals, 7-Eleven works with suppliers to enhance proprietary items such as its kid fave--the Slurpee. Due in August: the Mountain Dew Code Red Slurpee and Big Gulp in conjunction with Pepsi.

New products regularly get choice placement and in-store POP; however, 7-Eleven saves its media dollars for proprietary products. The Richards Group, Dallas, does radio buys. McCann-Erickson Southwest handles POP.

7-Eleven rang up $9.4 billion in sales in 2000 up from $8.2 billion in 1999. Last month, it warned of weak Q1 results due to a slowdown in consumer spending, higher utility costs and other factors, making a summer splash more crucial. To get its franchisees aligned on new products, the chain stages ongoing training sessions at its "University of 7-Eleven."

Now in its third year, 600 attendees were at last week's program in Secaucus, N.J., with five more regions due by Memorial Day.

Essential to its "first" plans: a proprietary cash register scanner system that allows 7-Eleven to provide suppliers with daily sales data from all of its U.S. stores, giving the likes of Gatorade an exact picture of a product's popularity Leveraging this data "will help us continue pick up speed [adding products]," said Smith.