As the Polar Vortex wreaked havoc on the North, attendees of the 2014 Convenience Retailing University, held Jan. 28-30 at the Renaissance in Glendale, Ariz., thawed out over conversations on leadership, employee engagement and building better brands.
Throughout the conference, speakers shared strategies on how to create lasting consumer loyalty—including LoyaltyOne president and CEO Bryan Pearson’s advice that relevance is far more important than frequency in loyalty programs, and marketing guru Andrew Davis’ directive to have a content-first approach to social media. Leadership was also exemplified in the stories told by speakers Don Yaeger and Cathy Greenberg.
In the C-Store Product Gallery, suppliers showed off their latest product rollouts, which emphasized bold flavors, functional benefits and—of course—convenience for both the consumer and retailer.
Threaded into the education-driven agenda were unique opportunities to connect with fellow retailers and suppliers, including the local c-store and restaurant tours and bowling tournament on Tuesday, and Wednesday evening’s raucous party at The Shout! House—where a conga line or two may have formed.
Continue reading for our coverage of the event, and download our CRU Photo Gallery below.
How to Build a Relevant Brand
Consumer culture, triggers, niches play into better marketing, Davis says
Marketing guru Andrew Davis says the convenience- retailing industry’s place in the consumer consciousness is this: making great strides with creative, quality products and services, but still not a part of many people’s daily decision-making processes.
Based on the marketing methodology he calls “brandscaping,” from his book “Brandscaping: Unleashing the Power of Partnerships,” Davis shared strategies to help build up a brand in the eye of the consumer.
Consider New Trigger Points: Davis recommends looking at marketing as an ongoing cycle that begins with a specific trigger—for example, the need for lunch. There’s typically one brand that will immediately come to the consumer’s mind, usually the one that markets to him the most. From there, the consumer enters the active evaluation process, adding and subtracting options.
The goal, he said, is to remove things from the active evaluation process so the consumer thinks of you. How can you leverage the trigger in your retail environment? And where are the triggers? Sometimes they are obvious, such as lunch or a coffee break. Other times, opportunities come from strange places in our culture. A recent study found that the MTV show “Sixteen and Pregnant” has triggered a huge decrease in teen pregnancies and a jump in condom sales.
Such cultural phenomena are “way outside of your control but are huge opportunities,” said Davis. Look at what brands are big in consumer culture and explore ways to capitalize on it. The explosion of “Duck Dynasty” licensing seen at last year’s NACS Show is a good indication of such power.
“Nothing has fueled our consumer culture more than the content brands we love,” he said. “Valuable content … inspires people to buy something they didn’t know they needed.”
Content-First Media: Rare—if not nonexistent—is the company that has figured out digital media. Davis recommends a content-first approach, in which the communication you put out and how you execute it is always high quality, relevant and consistent. “If you’re going to be successful in the digital world you need to … provide content that’s valuable,” he said.
The vast expanse of social media means brands need to have a larger footprint so they show up more often in consumer culture. But it must be relevant.
Think Fractals: Avoid the impulse of trying to serve large swaths of consumer groups, and instead explore highly specialized niches. Davis offered the example of Tractor Supply Co., a retailer than homed in on a very specific niche—backyard-chicken raisers—and through special events, online content and a passionate spokesperson saw a monumental increase in sales just by selling more chicks and feed.
Consider Micro-Day-Parts: The industry is no stranger to foodservice day-parts, but Davis challenged attendees to look at very specific, niche parts of their consumers’ days to find regular, ongoing times to market to them via social media or sell them something they need. You can be more relevant if you understand their days and their needs during those times, he said. --Abbie Westra
Never on a Sunday
Values, character, hospitality differentiate Chick-fi l-A, executive says
One of the toughest eggs to crack for Chick-fil-A founder Truett Cathy was to convince management at the first shopping mall in which he was about to rent space that his concept would still make money even if it were closed on Sundays.
Steve Hester, senior director of strategic initiatives for the $5 billion quick-service restaurant chain, cited that as one of the more obvious ways the Atlanta-based company stays true to its values, a divining rod that has kept the company focused on customer service and continuous change.
Known as much for its humorous 3-D cow billboards as for its chicken nuggets and waffle fries, the chain is unabashedly devout, with its Christian-centric mission statement “to glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who we come in contact with.”
The statement emphasizes hospitality and a caring nature that has become a central differentiator going forward, Hester said. “We hire for character and competency,” he said. “These are people who represent the brand. We want the captain of the football team, the homecoming queen. We want the best.”
In third-party surveys, Chick-fil-A outpaces the competition in hospitality cues such as eye contact, sharing a smile and speaking with enthusiasm, he said. Not everyone on the team is best suited for the front register, so it’s important to assess people’s strengths and place them where their best qualities will shine.
The company spends time emphasizing its values, Hester said. He showed a video of Cathy over the years, each year asking the same question: “Someone says, ‘Thank you,’ you say what?”
The answer is always, “My pleasure.”
Cathy demands that it be said with sincerity and a genuine desire to please the more than 2 million customers the chain sees on a daily basis.
While the company has grown via its distinctive offerings—including its signature chicken sandwich, milkshakes and freshly prepared lemonade—the competition has entered the field with equally compelling offers.
“Forty years ago, we were the only chicken sandwich, and of course now there’s KFC and McDonald’s,” he said. “So for us, it’s about the basics, the blocking and tackling. Do people feel welcomed?”
When Hester told attendees they would each get a book on the chain’s management culture, as well as a card good for a free chicken sandwich, someone in the audience yelled out, “Thank you.” Hester replied, “My pleasure.” --Angel Abcede
The Methods of Champions
Sweating the details leads to greatness, sports biographer says
Pull up the socks. Taut. No wrinkles, no stretch marks. Sneakers on. Laces tight, tongue out, bows not too long.
Welcome to opening practice at John Wooden’s gym. Legendary hoops coach at UCLA. Winner of seven consecutive NCAA national championships and 10 over a 12-year stretch. National coach of the year six times. Mentor and guide of luminaries Lew Alcindor (later Kareem Abdul-Jabbar), Bill Walton, Sidney Wicks, Richard Washington, Gail Goodrich and countless others.
Socks and shoes? Surely, this must be a Foot Locker commercial.
For sports biographer Don Yaeger, it’s another learning lesson about leadership and finding greatness in the subtleties of life.
Yaeger’s journey of unlocking the secrets of greatness has taken him from the best of athletes, such as Michael Jordan and Walter Payton, to unsung heroes Warrick Dunn and Michael Oher. After countless biographies, Yaeger has most recently penned “Greatness: The 16 Characteristics of True Champions.”
The list is culled from penetrating the lives and mentalities of sports figures. Even more than the stories is Yaeger’s innate curiosity, one that can easily apply to a retailer or vendor who wonders why some do better than others, which intangibles propel one from good to great. Yes, it’s about talent, but there is always something deeper.
For Michael Jordan, it was his sophomore year in high school. He was the last one cut in tryouts, losing his spot to a player who was 6-foot-7—a full 8 inches north of the still-growing Jordan. His mother sought to console him, citing the stature of the person who beat him out. But Jordan rejected solace: “We could spend the rest of our life coming up with an excuse for finishing second.”
For Jordan, arguably the game’s greatest player and competitor, the taste of defeat was far more bitter than the sweetness of victory. And that, for Yaeger is lesson No. 1 in the 16 attributes toward greatness: “It’s personal: They hate to lose more than they love to win.”
Yaeger’s list is divided into four categories:
How They Think
- It’s Personal: They hate to lose more than they love to win.
- Rubbing Elbows: They understand the value of association.
- Believe: They have faith in a higher power.
- Contagious Enthusiasm: They are positive thinkers. They are enthusiastic … and that enthusiasm rubs off.
How They Prepare
- Hope for the Best, But … : They prepare for all possibilities before they step on the field.
- What Off-Season? They are always working toward the next game. The goal is what’s ahead, and there’s always something ahead.
- Visualize Victory: They see victory before the game begins.
- Inner Fire: They use adversity as fuel.
How They Work
- Ice in Their Veins: They are thoughtful risk-takers and don’t fear making a mistake.
- When All Else Fails: They know how—and when—to adjust their game plan.
- The Ultimate Teammate: They will assume whatever rule is necessary for the team to win.
- Not Just About the Benjamins: They don’t play just for the money.
How They Live
- Do Unto Others: They know character is defined by how they treat those who cannot help them.
- When No One Is Watching: They are comfortable in the mirror. They live their life with integrity.
- When Everyone Is Watching: They embrace the idea of being a role model.
- Records Are Made to Be Broken: They know their legacy isn’t what they did on the field. They are well rounded.
Or, as Michael Jordan said to Yaeger, “A loss doesn’t become failure until you make an excuse.” --Mitch Morrison
Measuring the Growth Drivers
E-cigarettes, foodservice, frozen food ripe for higher sales, says MSA analyst
C-store retailers have a pretty good idea of which categories are performing well. But do they have enough data to act on this idea?
Don Burke, senior vice president of Management Science Associates Inc. (MSA), Pittsburgh, told retailers they have a chance to “put a stake in the ground” by focusing on categories where they have a competitive advantage, and by better understanding their customers’ needs. To this end, Burke shared exclusive research from MSA that highlights these opportunities.
The firm crunched two years’ worth of shipment data from distributor McLane Co. and POS and transactional data from QuickChek Corp., Tedeschi Food Stores and Martin & Bayley’s Huck’s chain. In the process, it underlined some known assumptions— foodservice truly does elevate a store’s earning potential, for example—while uncovering hidden sales gems.
MSA began by segmenting the nearly 500 sites represented by the three chains and McLane’s extensive customer network by their customer demographics:
- Blue-collar tobacco stops, with a sub-rural, middle-income customer base.
- Affluent suburbia, patronized by higher-income, mostly white and Asian customers.
- Heavy-basket Hispanic, where customers shop the store like a small grocery.
- Cool urban diversity, with low-income, mostly African-American customers.
- Main Street USA, with older, mostly white, rural customers.
According to MSA’s analysis, four of these five segments that saw sales declines in 2012 posted growth in 2013. Only one segment, blue-collar tobacco, saw a second year of declines. Its biggest growth drivers were fountain beverages, e-cigarettes, foodservice, smokeless tobacco and discount cigarettes.
The biggest sales increase in 2013 took place at heavy-basket Hispanic stores, where e-cigarettes, frozen food, discount cigarettes, packaged tea and candy drove growth.
MSA also cited growth category opportunities, first highlighting the biggest by dollar sales: cigarettes, packaged beverages, foodservice, hot dispensed beverages and other tobacco products. Among the fastest-growing categories, e-cigarettes took the lead, followed by general merchandise (driven by strong propane exchange sales), wine, edible grocery (bananas, apples and bagels the top-selling items) and other tobacco products.
E-cigarettes’ growth came off of a small base; less than 1% of transactions included e-cigarettes in 2013, compared to 30% for cigarettes. But they also pack a big punch when it comes to basket ring, averaging $18.13. At the same time, e-cigarettes are having negligible to no effect on sales of cigarettes or OTP—at least for now, according to MSA.
Data shows that e-cigarette sales peak between 5 and 7 p.m. “Staff the store correctly and have the products [customers] want,” said Burke.
Meanwhile, one category that has not gotten much attention or space from the c-store channel but kept re-emerging as a sales winner: frozen foods. MSA figures revealed that baskets including frozen food were the most likely to include five or more items. The most popular frozen purchases? Frozen pepperoni pizza and frozen sausage pizza. --Samantha Oller
Strong Culture, Commitment Guide Greatest Brands
Ever wonder about the magic behind highly loved brands? You know—the ones people tattoo on their arms, or praise in YouTube videos?
As part of her research for the book “What Great Brands Do: The Seven Brand-Building Principles that Separate the Best from the Rest,” branding consultant Denise Lee Yohn discovered key traits that great brands have in common:
Great brands are born inside of a company with a strong internal corporate culture, one that is willing to change how it functions to better match its values. Without this alignment, employees often end up working at cross-purposes, with more frequent internal disputes, said Yohn. “The culture determines whether the employees embrace the brand,” she said.
Great brands ignore trends; instead, they identify ideas on the horizon that may be relevant and figure out how to advance them. While fast-food restaurants were competing on lower prices and value meals, Chipotle founder Steve Ells saw greater opportunity in offering high-quality food. Even during the recession, Chipotle continued to push its quality—it sourced higher-quality pork, for example, even though it meant a price increase. Surprisingly, sales doubled for menu items that included the pork.
Great brands avoid selling products. For example, Nike is much more than a shoe company. Yohn shared Nike’s switch from a company-focused advertising campaign in the 1990s to one centered around the customer-focused “Just Do It” slogan. “It wasn’t about sneakers; it was about values,” said Yohn. “Seducing through emotion trumps pushing a product.”
Great brands stay committed. Consider New York-based burger and milkshake chain Shake Shack. While other restaurant chains chased food trucks and expanded into catering, Shake Shack actually has narrowed its focus on its few restaurants and its level of service. “It was a deliberate choice to preserve the core of the brand,” said Yohn.
Great brands sweat the small stuff. Yohn shared the example of Chobani Greek yogurt, which debuted with short, squat packaging and printed plastic sleeve labels that allow the color to pop more, vs. the typical yogurt container. “Every customer touch point matters,” said Yohn. “The little things you do will far outweigh the big things you say.” --Samantha Oller
Evolve Beer Sales to Match Consumer Tastes
Bob Gulley is a believer in product innovation—a big believer.
“I take all innovation [into my stores] instantly,” said Gulley, director of beer, wine & spirits for Cary, N.C.-based The Pantry/Kangaroo Express, during the session titled “The Evolution of Beer, Wine & Spirits.” “If [a new product] is coming, like Miller Fortune, I want it in my store on Day One.”
Why? Because innovation is what’s driving beer sales these days, he said: “If you’re not in innovation, you’re not taking advantage of the opportunity in the beer segment.”
It helps if the manufacturer has a healthy marketing plan to go along with the new-product rollout, he said. And if part of that marketing includes POP materials for retailers, he wants in.
“I advertise what’s new,” Gulley said. “The customer already knows I’ve got 18-packs of Bud Light.”
And beer consumers are more willing to experiment than ever. “This shift has required suppliers to push their boundaries to adapt and grow,” he said.
One way Gulley is taking advantage of this experimentation is by focusing on single-serve beer, with three shelves of 16-ounce singles in the cold vault and “ice units in every one of our stores.”
The customer may not be ready to spend $9.99 on a six-pack, but he or she can afford $2.99 or less for a single-serve can that serves as a sample taste. So he has pushed manufacturers to develop single-serve packages of craft beers and other high-end brews, and it’s paid off with brands such as Blue Moon, Shock Top and Red Hook, now “selling gangbusters” in Gulley’s stores.
And as premium and sub-premium beers struggle to maintain share, the strategy involves developing a well-rounded product offer.
“I’m not going to walk away from the premium brews,” he said, “but I am going to offset it.” --Steve Holtz
Meaningful Connections
Loyalty specialist reveals paths toward building customer engagement
The best marketing intentions can lead to negative consumer responses—even making people feel “creeped out”—which is what keeps many retailers from creating successful loyalty programs, according to one consultant.
Bryan Pearson, president and CEO of LoyaltyOne Inc., Toronto, provided several examples of how companies can use data to engage customers but ultimately have a negative reaction.
The problem stems from so many brands fighting for attention and trying to rise above the clutter. In their zeal to use data and reach out, companies fail to truly understand their customer, he said.
“It’s about engaging people in a different way,” Pearson said, “one that creates meaningful connections.”
Speaking before about 500 retailers, suppliers and industry attendees, Pearson focused on defining relevance and using data in ways that will elicit positive, passionate responses. To help the conference audience understand, he cited several cases he has encountered in which the use of customer data was confusing, off-putting and at, least in one case, downright enraging:
- A frequent-flier reward: In his example, he had achieved the noteworthy status of flying a million miles with a specific airline. Without his knowing the parcel was coming, he received a very sophisticated black box. In it was a number of things that seemed irrelevant, even embarrassing to him: a model airplane, tags that would identify him as spending way too much time traveling and then at the bottom of the box, almost buried, something that really meant something to him. That was lifetime “elite” status. “They buried the punchline,” he said.
- Online group discounts: An online retailer offered a digital group discount, and Pearson became a recipient of other available discounts. But because he signed up for the initial retailer’s service in a different state than where he actually lived, he received group discounts for the city he didn’t live in.
- Department store retailer: Pearson also told a story of a department store that wanted to connect with pregnant mothers. The effort went sour in one instance when a young teenager’s father noticed the mailing and was infuriated that the retailer would send such an e-mail. He did not know his daughter was pregnant.
Relevant outreaches connect with people where they live at the stage of life they’re in and also tie back to their actual interests, Pearson said. These efforts are meaningful and typically stir up customer enthusiasm.
One of his examples of a success story was an oil company that needed to renovate and close down several stores. Using points to reward customers for changing fueling sites while their regular locations were undergoing renovation, the program actually persuaded people to not only stay brand loyal but also actually spend more.
In closing, Pearson suggested that before any company can succeed with loyalty, it has to ask itself difficult questions about its internal organization and its willingness to break down silos and share information. Data flows through many parts of an organization and must be shared to develop the kind of relevance that the customer needs.
As a next step, he suggested companies “be transparent and reasonable with your customers. Use data to create value.” --Angel Abcede
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