29Sep2000 USA: 7-Eleven ads woo women with high fashion image.

By Candace Talmadge
DALLAS, Sept 29 (Reuters) - In a first for a convenience store operator, 7-Eleven Inc. has ventured into the world of fashion with a full-page magazine advertisement that reads, "New York. Paris. Milan. 7-Eleven."
Depicting a modestly posed yet scantily clad, long-legged woman, the ad touts a new house brand of pantyhose called Heaven Sent that Dallas-based 7-Eleven has been rolling into its 5,700 U.S. and Canadian stores.
Along with a new house brand of eye shadow and lipstick called Heart and Soul, and recently introduced items aimed at teenage girls, the largest U.S. convenience store operator is hoping the new merchandise will bring in more women, who traditionally have been just 30 percent of its patrons. Males between 18 and 34 typically have formed the rest of 7-Eleven's - as well as the entire industry's - mainstay customer base.
"Convenience is more important to women," said Cheryl Martineau, 7-Eleven category manager. "Women are more willing to shop convenience stores now than they have been in the past."
Martineau said 7-Eleven plans to deepen its selection of female-oriented merchandise in the first quarter of 2001 by adding facial and nail care products. For now, it's rolling out CD-size compacts and mini compacts filled with Heart and Soul brand eye shadow or lip colour, priced between $2.59 and $5.99; teen-oriented bracelets; toe rings and key chains, costing between $1.99 and $7.99; and Heaven Sent pantyhose, priced from $2.99 to $4.69.
Dallas agency Coffee Black Advertising produced two versions of a four-colour pantyhose print ad, which Martineau said represents 7-Eleven's first foray into magazine advertising. The first ad appears in the October issues of Cosmopolitan and Glamour. The second, also a full page, is running in the same month's issues of Working Woman and D, a Dallas city magazine. The headline reads: "Three things you've never seen in a trendy fashion ad." Copy lists the $1 off coupon included in the ad, the 4-inch container in which each pair of 7-Eleven pantyhose is packed and the 7-Eleven logo, which is in both ads, along with the overall corporate theme, "Oh thank heaven."
Martineau said all of 7-Eleven's media buying is handled by Camelot Communications Inc., Dallas.
According to Competitive Media Reporting, which tracks advertising spending, 7-Eleven's 1999 consumer media spending was $26.9 million. Martineau declined to say whether the fashion ads will affect this year's spending, although she did note that they were currently scheduled for only one month.
"Broadening the stores' appeal makes sense," said Andrew Ebersole, a bond analyst for KDP Investment Advisors, a Montpelier, Vt.-based research firm that specialised in high-yield bond analysis. "It's another demographic to reach."
7-Eleven's concern about new customers appears to be shared by the entire U.S. convenience story industry, which had 1999 revenues of $256.6 billion, according to the Franchise Finance Corporation of America, a Scottsdale, Ariz., firm that provides real estate financing for multi-unit retail operators. According to a recently released FFCA report, convenience stores are searching for ways to attract a wider range of consumers amid fiercely intensifying competition. The report stated that among problems convenience stores face are major oil company consolidation, heightened competition from retailers such as supermarkets and mass merchandisers, shrinking gasoline margins and reduced income from tobacco purchases.
The industry is especially dependent on and worried about tobacco sales, which have been under assault for a number of years, noted Claire Pamplin, editor-in-chief of Convenience Store News, a New York-based trade publication. In 1999, CSN estimated that tobacco accounted for 34.9 percent of convenience store sales, while health, beauty and cosmetic merchandise provided just 1.31 percent of revenues.
"Even a percentage point or two growth in a product category reduces the dependency on tobacco," Pamplin said.
She said this is one compelling reason for store operators to expand their offerings in high-margin categories such as health-beauty-cosmetics or fresh food.
"7-Eleven has always been known for dashboard dining," said company spokeswoman Dana Manley. She added that in the next two months, new foods that appeal especially to women, such as fresh-cut produce and salads, will start appearing in the company's stores.
While bond analyst Ebersole thinks 7-Eleven is on the right track, he said the jury's still out on the company's effort to tilt its customer mix or raise overall revenue with its women-oriented merchandising attempts. Earlier in September, 7-Eleven reported its 38th consecutive monthly increase in U.S. same-store sales, which rose 5.7 percent in August, compared with a 4.9 percent gain in the same month of 1999.
(C) Reuters Limited 2000.




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