CSP Magazine

No Easy Job(ber)

This month’s cover story should give us pause. Our industry is standing at the footsteps of a radical transformation, one that could decide whether we become a trillion-dollar industry and buoy ourselves as the neighborhood retail choice for the 80-millionstrong millennial generation.

Or, if handled poorly, it could result in a 10% drop in store count over the next five to 10 years. Which transformation am I talking about? Credit-card fees? Foodservice? Total tobacco sets? None of the above. Rather, I’m focusing on the downstream shift from Big Oil to jobber.

At first glance, Big Oil’s selloff is nothing new. I can count the many times PMAA’s Bob Bassman or former SIGMA spokesman Tom Osborne shared how major oil was going through another hiccup, a gestation of sorts. They were right, of course. Over the past few decades, we have witnessed the multiple occasions when major oil emptied its pockets of stores, only to re-enter the world of retailing with yet another prototype that was sure to redefine convenience.

Either due to cost, lack of inspiration or Big Oil arrogance, many of these models failed: Mobil Mart, Shell ETD, BP Connect, to name a few. But guess what? These upstream mavens stunned us when they demonstrated in more recent years that they could create a convenience prototype that works, both for the franchisee and consumer. ExxonMobil’s On the Run and Chevron’s ExtraMile are two of the best concepts to be rolled out on a large scale; they consistently rank among the top scorers in our annual CSP-Service Intelligence Mystery Shop.

Backing these retail templates, oil companies have rolled out universities to franchisees and dealers, and unveiled comprehensive checklists replete with rewards and recognition to ensure high quality at both the forecourt and backcourt.

In short, Big Oil finally showed it could play on the retail level and more than hold its own.

Now most are pulling out, apparently for good, divesting thousands of sites from the Rockies to the Plains to New England. And with the asset divestiture comes the end to many invaluable marketing and purchasing programs that propelled many operators to achieve success they might otherwise have lacked.

As jobbers double and triple in size via Big Oil’s selloff, will they invest in the programs necessary to make sure their networks prosper? Do they even have the financial muscle to match these programs?

Will they maintain Big Oil’s retail brands, retire them over time and develop new franchise brands, or shift the onus onto the dealers and franchisees to build their own retail models—essentially making it every man and woman for him and herself?

“We’re like the kid at the birthday party busy opening up the presents. The gift wrapping is everywhere and we’re wide-eyed over all the toys before us,” one jobber specialist recently shared with me. “What we don’t know is: What are we going to do with all of these toys?”

Some jobbers are poised for this new era. They are investing in internal marketing initiatives or contracting with third-party vendors to develop retail standards and programs, including loyalty cards, purchasing pools, in-store benchmarks and promotional calendars. Indeed, CSP and SIGMA partnered last fall to conduct a first-ever jobber survey, and we’re following up with a new survey this year that tackles some of these issues.

Other jobbers, however, plan to continue doing what they’ve always done: distribute fuel and a few support services centered on the fuel island. These fuel marketers, however, are missing the boat.

Were we a restaurant, Big Oil would be the chef, the jobber a waiter, shuttling from the kitchen to the diner, delivering the entrée and asking about the quality of the food.

With Big Oil leaving, question is: Are jobbers ready to stand in the kitchen? 

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