7-Eleven Taps ‘Spring Breakers’ Director Harmony Korine for $70 Million Marketing Campaign
7-Eleven Inc. is rolling out its biggest television advertising push in years as part of a marketing campaign to counter increasing competition from all sides and to gain a new look from shoppers.
The convenience store chain plans to spend more than $70 million this year on the campaign, more than doubling its marketing spending last year, according to a person familiar with the effort.
The TV commercials, which were directed by “Spring Breakers” director Harmony Korine, depict its customers as an eclectic group, including a roller-skating performer who makes good use of the parking lot, lowrider bike enthusiasts who circle the gas pumps and a band that orders 7-Eleven food and drinks delivered to its garage. The campaign is themed “Take It to Eleven.”
Company executives decided about a year-and-a-half ago they needed to tell consumers about their upgrades in food, operations and other areas, according to Marissa Jarratt, chief marketing officer at 7-Eleven, part of Tokyo-based Seven & I Holdings Co. “The company realized we’ve been investing in these big transformational initiatives and we’ve got to tell the consumer we’re changing,” she said.
Ms. Jarratt joined the company in late 2019 to pursue that work, but the pandemic intervened before the campaign got off the ground, she said. The shift toward e-commerce during the ensuing lockdowns and customers spending more time at home has given the campaign even more to do.
“Convenience is no longer our competitive advantage,” Ms. Jarratt said. It remains a key strength, she added, but the company has to innovate and not rely on convenience alone.
Convenience stores have done well during the pandemic, when many people turned to them for essentials, Ms. Jarratt and others said. Revenue at 7-Eleven grew in 2020 as overall visits declined but the average amount purchased during each visit grew, according to Ms. Jarratt.
As a whole, U.S. convenience store sales excluding gas totaled $161.6 billion in the 52 weeks through April 3, up 7.3% from the period a year earlier, according to research company NielsenIQ. That was faster growth than in the previous 52-week period, NielsenIQ said.
But the appeal of their business is attracting rivals.
“The good news is the value of convenience has never been higher,” said Jeff Lenard, vice president for strategic industry initiatives at the National Association of Convenience Stores. “The bad news is every other retailer also knows that in every other channel. No one is the ‘inconvenient’ store. Everyone is looking to serve that convenience customer. Some things that were thought of as exclusive to convenience stores are much less so.
“You go to any store and they are selling snacks and drinks at the register— Home Depot, PetSmart, you name it—they are selling some of the same items,” Mr. Lenard added. “And then the level of convenience is competing against the convenience of the internet.”
7-Eleven has built a team focused on innovation, experimenting with drone delivery of Slurpees and cashierless checkout at a store at its corporate headquarters in Irving, Texas, said Sucharita Kodali, a retail analyst at Forrester Research Inc. But its franchise model makes it difficult to make widespread changes quickly, she said.
Eighty percent of 7-Eleven stores are franchised, according to the company.
Ms. Jarratt said 7-Eleven is steadily improving its customer experience, including through initiatives such as its “evolution” store format. A new “evolution” location this month in Dallas, for example, integrates the chain’s Laredo Taco Company restaurant concept in a drive-through for the first time. Part of the goal is to show that “this isn’t just gas station food,” Ms. Jarratt said. “There’s real restaurant quality food at 7-Eleven.”
The new campaign, which was created with Dentsu Group Inc. agency 360i, will run for the rest of the year. In addition to traditional TV commercials in the U.S. markets where 7-Eleven operates, it will include ads on streaming TV, outdoor signs and billboards, radio, digital media and paid search, Ms. Jarratt said.