ATLANTA — There was no shortage of technology, product or retailing advice during the 2019 NACS Show, held Oct. 1-4 in Atlanta. Here’s a look at more than a dozen insights that CSP editors collected from educational workshops, general sessions and the trade show floor …
How will they find you?
“Location is no longer the determinant of success,” said Michael Sansolo, a retail food expert and research director for the Coca-Cola Retailing Research Council. Sansolo said online listings will become increasingly important for c-store retailers as virtual assistants such as Amazon’s Alexa become available in consumer vehicles.
Drawing in customers
Manufacturers are increasingly investing in digital marketing to help draw customers into c-stores. The Hershey Co., for example, is working on data-driven platforms that use geo-targeting and audio programs to drive trip frequency among shoppers. “As consumers change the way they shop, they also change the way they consume media, and we must respond accordingly,” said Charlie Chappell, head of media and communications planning for the Hershey, Pa.-based company. “We’re developing an agile approach to media cross-platforms so we can target not only regular c-store customers but also take a geo-based approach to target consumers on mobile devices when they are near a store location.”
In 2018, natural food stores were the leading places for the purchase of CBD (cannabidiol) items, said Kristen Nichols, editor of Hemp Industry Daily, Denver, citing information from the Brightfield Group, Chicago. This year, chain retailers have taken the throne. The main products consumers buy are topicals (25% of consumers purchase these), tinctures (25%) and capsules (10%).
And while CBD remains a gray area in federal and state regulations, the ingredient remains on an upward trajectory, said Scott Sinder, partner with law firm Steptoe & Johnson LLP, Washington, D.C. During a session titled Cannabis, Marijuana and CBD: The Practical and Legal Outlook, Sinder said he believes products made with the ingredient will remain a growing product segment once a set of U.S. Food and Drug Administration guidelines have been released. “Moving forward, CBD will be divided into two worlds: more or less concentrated,” he said. “It will be regulated on a use-by-use approval.”
Room for improvement
Even heavy c-store users see room for improvement in the quality of what they're buying. Larry Levin, executive vice president of IRI, Chicago, said when it comes to fresh food and coffee, fewer than one in five customers think the items are great. “This gives us plenty of room to grow,” Levin said. While 64% of heavy c-store users go to c-stores when they want food in a hurry, 59% of heavy users would go more if quality were to improve, Levin said.
Gasoline vs. electric
On the surface, electric vehicle (EV) charging appears to provide much greater margins that gasoline. But chargers can cost a retailer more on a practical level in the long run, said Glen Stencil, president of eMotive Solutions, Houston. Converting the costs to make the two comparable, Stencil said a unit of gasoline can wholesale for 10 cents, but electricity can cost a retailer only 2 cents. The problem for electricity is that it comes with a “demand charge” from the provider, which can cost as much as $2,200 a month depending on the electricity provider and the location. Ultimately, electricity has greater margins, but additional costs can add up.
The future of electric vehicles
Last year there were 3 million electric cars sold globally, up from 1 million in 2015. That number could rise to 15 million by 2030, according to information presented by John Eichberger, executive director of the Fuels Institute, Alexandria, Va., and Norman Turiano, principal with Turiano Strategic Consulting LLC, Cape Coral, Fla.
Although it could be decades before significantly more people are driving EVs, Eichberger said now is the time for convenience-store operators to consider putting charging stations in. "Don't dismiss it; it is not going to put you out of business tomorrow, but the market's changing and you need to change with it," Eichberger said. Turiano said he is a critic of charging spots because they are essentially empty parking spots. Furthermore, 85% of EV users charge at home in their garage, he said. The market needs to be taken into consideration when looking at whether to add an EV charging station now. In some urban areas, for example, people may be less likely to have a garage and therefore have a need for a charging station at a public place, Eichberger said.
Every employee at Casey’s General Stores is critical to the success of the company regardless of their job title, said Julie Jackowski, senior vice president, corporate general counsel and secretary for the Ankeny, Iowa-based company. Jackowski, who was named the NACS chairwoman for 2019-2020, said that Ronald Lamb, the late chairman and longtime executive of Casey's, instilled this idea into her head during her final interview to work with the company. “Ron said, ‘Julie, you need to understand that if you work for Casey’s, an attorney is no better than our part-time doughnut makers,’ ” she said. “That comment from Ron made me take the job.”
Age verification confusion
As more states and municipalities change their minimum age for purchasing tobacco products from the federal minimum of 18 to 19 or 21, retailers and their employees can often get confused, causing the potential for miscommunication and customer dissatisfaction at the store level, said Lyle Beckwith, senior vice president of government relations for NACS. Often the situation arises when someone who was able to purchase tobacco legally one day is told he or she is not able to the next, he said. To avoid confrontation, he said material from the We Card Program can help staff role-play different scenarios and be prepared to politely diffuse the situation.
The ROI on video gaming
Brian Wente, vice president and COO of Vernon Hills, Ill.-based retailer Graham Enterprise Inc., said video gaming can have a negative connotation to it. However, it’s not the back-room activity that it used to be. The demographics of the customers who play video games are the same as those who come into c-stores every day, Wente said. While gaming rules and regulations differ across the nine states that have legalized gaming, it pays off for c-store owners where allowed. One of Wente’s stores under the BP brand in Johnsburg, Ill., brought in $451,000 in net revenue in 2018. At a Forest View, Ill., site, the total revenue over four years was $2.5 million.
Food trucks increasingly offer a new way for retailers to get their foodservice products in front of more consumers. And for those considering a food-truck strategy, Shane Flynn, managing director of Aramark Corp., Philadelphia, said the trucks should have a simple menu design and layout. In an education session titled Making Money With Food Trucks, Flynn also emphasized food safety, strong planning and having a quality supply chain as ways to successfully use a c-store food truck. Retailers mostly use food trucks when they’re testing a new product or concept and when they’re refurbishing one or multiple stores, he said.
Tackling loyalty data
When trying to understand promotional efforts at his stores, John Spicknall, director of business analysis for Atlanta-based RaceTrac, said so-called big data is a way to analyze how people behave, allowing him to forecast demand, successfully plan promotions and develop an exit strategy. Through their loyalty program and working with software providers, Spicknall is able to see market-basket movement and better understand what people purchase together across categories within the store. "It's good to have anecdotal evidence," he said, "but data tells the story."
Small brand benefits
Lonnie McQuirter, director of operations at 36 Lyn, Minneapolis, said there can be several benefits to stocking smaller brands. For his store, he finds brands locally, such as at the farmer’s market. One benefit to this can be that smaller brands sometimes have a huge social-media presence. A Facebook or Instagram page may be the only way to advertise the products, so smaller suppliers pay close attention to it, McQuirter said. Smaller, local brands also take more ownership of their items, McQuirter said. If a company owner comes into his store and sees that his product is running low, it may be as easy as them running to their car to fill that supply.
For retailers needing to coordinate maintenance and upgrades on everything from EMV in fuel pumps to coils in air-conditioning units, Tom Sansoucy, director of facilities support for Framingham, Mass.-based Cumberland Farms, suggested using mobile apps to help communicate with in-field technicians. Apps that use APIs (application program interfaces) to share data can equip a repair worker with information ranging from a device’s maintenance history to insights on equipment upgrades, he said.