Back to School
Full coverage of CSPs 2013 Convenience Retailing University.
Some people say life is a series of learning experiences. And wasn’t that the truth at Convenience Retailing University (CRU) 2013? More than 500 retailers and suppliers convened in Glendale, Ariz., in late January for four days of opening their minds to new ideas, sharing their experiences with friends, and coming together in generosity to the CARRE Foundation’s featured charity, the Juvenile Diabetes Research Foundation (JDRF). Read on for our coverage of the event, and check out our CRU Photo Album for a recap of networking, bowling, partying and opening their hearts for a great cause.
Unifying marketing, operational efforts made food business sense for QuickChek
In describing QuickChek’s mission of how providing a great place to work leads to a great place to shop, which ultimately leads to a great place to invest, John Schaninger portrayed a perfect circle—something that perpetually rejuvenates itself.
But the process isn’t always so perfect. Speaking before about 75 attendees at a breakout session, Schaninger, vice president of sales and marketing for the 132-store, Whitehouse Station, N.J.-based chain, said communicating how store-level goals tie back to marketing strategies is an ongoing and pervasive task.
“We like meetings,” Schaninger said, explaining how periodic meetings involving cross-departmental teams help develop budgets, goals and tactics. “Communication is vital.”
He described a culture of open and honest communication, which leads to high levels of execution and then a point of celebration. The whole process, Schaninger said, started with budgets.
The chain’s budget process begins annually with meetings between vendor and his six-person (five category managers and a foodservice manager)marketing team. They work together to review supplier statistics and trends on a national and local level. Schaninger said he prefers local numbers over national, often encouraging vendor-accompanied trips to the company’s stores, competing c-stores and even cross-channel retailers.
For each category, QuickCheck designates a vendor as a category captain for the chain. That person works with the chain to help determine the potential opportunity for the entire category. Those results go to the company’s senior management.
After initial feedback, the marketing team revises numbers, then presents the new budgets to everyone from the senior team down to district leaders.
“You have to be ready for them,” he said. “Talk about being open and honest.”Sometimes numbers will be skewed because of a warm summer that extends vacation traffic, or a storm that might depress final sales figures. All those are taken into account. Budgets also circulate back, meaning that marketing initially works from budgets first developed at the store level. Store personnel meet with district managers to create budgets that flow back up to the top.“What’s accomplished is a level of buy-in from those who then have to execute,” he said.
When asked who gets the final say, Schaninger said, “It really is everyone together—operations, marketing and vendors. We’ve got to get to these numbers,” he says. “We’ve got to come to an agreement, so when you ask who owns it, we all own it.”
At the end of the day, they all have to report to a board of directors. “And it’s not fun to go to them not having hit that number,” he said.
C-Stores Set the Pace for New Products
“You guys are truly a great catalyst in bringing new products to market.”
This was the central theme of Larry Levin’s session, “Making Stars Shine Bright in C-Stores: The Channel’s Importance in New Product Launches.” Levin, SymphonyIRI Group Inc.’s executive general manager of consumer insights, would later dub the c-store industry a “rock star” for innovation.
SymphonyIRI Pacesetters report clearly shows the important role c-stores play in successful product launches. For 13 years, the Chicago-based market research company has tracked the most successful launches of new or extended brands—those with at least a 30% distribution and $7.5 million in first-year sales. During those 13 years, c-stores have accounted for approximately $2.5 billion of the Pacesetter new product sales, which is more than two-thirds of all Pacesetter dollars.
“C-stores are a great laboratory to breed successful launches, especially in alcohol, tobacco, sports and energy drinks,” Levin said. Not surprisingly, of the top 10 c-store product launches over the past 13 years (representing a whopping $1.4 billion in sales), all the products fell into those four segments. Perhaps more impressive is the fact that out of those products, four saw 99% or 100% of their sales dollars from the c-store channel:
- Monster Nitrous had $55 million in sales during its first year, 100% of which were in c-stores.
- Muscle Milk had $86 million year one sales, with 99% c-store.
- Camel Snus clocked in at $90.8 million, 99% c-store.
- The No. 1 first-year new c-store product was Camel Crush with $375 million in sales, and 100% from c-stores.
“As you think about these top 10 products, it really helps you see the importance that you folks play in gaining the trial, gaining the repeat and sustaining the distribution for these manufacturers as they release these important products,” said Levin.
And though SymphonyIRI had yet to release its 2012 Pacesetters report, it was another strong year for c-store staples, with new offerings from Rockstar Energy and Dr Pepper leading the pack, according to Levin.
Of course, new product successes are not just about what happens in the first year. Levin warned retailers that it is equally crucial to continue support in year two.
“Trial doesn’t only happen in year one,” Levin said. “The worst thing that can happen is if consumers want.
CRU attendees curious about QuickChek’s foray into self checkout stations got an update from John Schaninger, the chain’s vice president of sales and marketing.
In use at 18 stores for more than four years, self-checkout is most effective at high-volume locations. He’s seen sites that needed four cashiers at peak times fall to two. It didn’t cut labor because the company decided to put the extra cashiers out onto the sales floor to more directly serve customers.
As far as theft, he said a lot of shrink occurs through the back door vs. the front, meaning that internal theft and other suspicious activity happens where shoppers aren’t present.“Shrink goes down when we put in self-serve,” he said.“Eighty percent of it is a team member.
How to Cater to the Empowered Consumer
“Consumers are now in charge. They have more power today than ever.”
That statement, made by Michael Sansolo, president of Sansolo Solutions, gets to the heart of what retail is today.“Every day you have to give[your customers] a reason to come to you,” he said. Long gone are the days of simply putting up a store and watching customers walk through the doors. If you’re doing business the way you were in 2008, you’re not relevant any more, he said. “Now more than ever, consumers can beat a path awayfrom your door.”Sansolo, who spent 13 years as vice president of FMI and is a former editor of Progressive Grocer, urged retailer attendees of his general session to figure out who they are as retailers and what makes them special. “In looking at your competition, how do you blow them away? The more defined your niche is, and if that niche is properly served, the happier your customers are.”
Sansolo cited an example from overseas. Despite the company’s retail woes in the United States, Tesco has a strategy that works well in England: It builds different types of stores tailored to different areas. A store near a highway or touristy area looks much different from a Tesco supercenter.“They want to make sure they have the right store for you,” Sansolo said.
On the other side of the retail coin is Best Buy, a retailer with beautiful stores that is becoming merely a retail showroom, having fallen victim to the stark reality that consumers have more information than ever before at their fingertips. Consumers do their shopping for a new TV at a Best Buy, then go online and shop for the best price.
Another unfortunate example: Tata built a $2,300 vehicle for consumers in India, many of whom could not otherwise afford a car—but the vehicle was found to “occasionally” burst into flames. Competing auto companies are using that fact to market themselves as the best value for the money.
Metro Petro, U-Gas and Parker’s take home CSP’s Convenience Retailing Awards of Excellence
Innovative store design, unique branding and giving back to the community straight out of gasoline margin: These are the three attributes honored in CSP’s annual Convenience Retailing Awards of Excellence.
Meeting Community Needs
A 40-year-old c-store with three automobile service bays initially presented a challenge for Clay and Mia Lambert. With no experience in the c-store industry, the Lamberts bought the Minneapolis site in 2003—and quickly turned that challenge into an opportunity.
Loc a t e d on the outskirts of the University of Minnesota, the Lamberts’ site was profitable, but they knew they could do better, and a unique store design was the way to do it.
“Once we cleaned the place up … we started busting at the seams with new business,” co-owner Mia Lambert says.“So we knew that we had some opportunity that we weren’t capitalizing on in the old structure.”
The result is Metro Petro, a 3,500-square-foot store that’s designed to appeal to female customers with a unique color scheme and materials, and an overall focus on safety and security. The couple purposely chose a female architect and other consultants with little experience in the c-store industry to ensure that their two-story store stood out from the pack.
Since opening the rebuilt store in 2009, Clay and Mia have seen a marked improvement in sales and store traffic. And more boosts are expected when the University of Minnesota’s TCF Bank Stadium—located just down the street—becomes the home field for the Minnesota Vikings for at least a few years.
A Foodservice Destination
The U-Gas site in Barnhart, Mo., is part c-store and part upscale QSR, with an innovative use of dual names.
The 5,300-square-foot site opened in 2008. U-Gas created a second brand—Gigi’s—that set the restaurant apart from the well-known local c-store brand. The name comes from the “nickname for the maternal grandmother of the founder of the company,” says Perry Cheatham, COO of U-Gas. “So when we needed a name for this place, we decided to keep it in the family, and it gave it a folksy, homemade feel.”
Outside, Gigi’s Fresh Café stands out for its stone façade and classic restaurant color scheme. Inside, the café is set off from the main c-store by a short hallway, providing a separate atmosphere while remaining contiguous with the main store. The offering is a collection of comfort foods and down-home favorites, such as flatbread pizza, oven-baked sandwiches, fresh salads, Panini’s and more.
To date, only one of the 19 U-Gas locations includes a Gigi’s Fresh Café, but the separate branding has taken on a second life as Gig’s Fresh Express, the chain’s commissary-foodservice offering that brings packaged hoagies, salads, fresh fruit, chicken tenders, burgers and more to the c-stores.
Fueling the Community
The Parker Cos. is giving away its gasoline margins—well, some of it.
The Savannah, Ga.-based chain of 27 c-stores is in the second year of its Fueling the Community program, which, on the first Wednesday of every month, donates to local schools a penny for every gallon of gas pumped. CEO Greg Parker says the program lets the communities know that Parker’s is interested in their well-being.
“We live in an age of empathy; customers want to support companies that are giving back,” Parker says. “So we think it’s really important that we’re going back in a profound way to the communities that are supporting us.”
Launched in April 2011, Fueling the Community works in conjunction with Parker’s Pump Pal loyalty program, which drops the price of gasoline at the pump. While a donation is made for every gasoline customer, regardless of whether they’re a loyalty-card holder, only those with a Pump Pal card can log onto the Fueling the Community website and choose the school they’d like the funding to go to.
“We’re giving the power to the people. We’re letting the people decide how the money is allocated,” Parker said. “We don’t restrict anything with the schools; the schools can spend the money any way that they want.”
So far the program has raised about $50,000, donated to numerous school districts in Georgia and South Carolina.