I flew home from our annual Convenience Retailing University conference at the end of February on a high (ba-dum-dum). I had just spent three days hearing industry insiders and outsiders ponder the wave of disruption on the c-store horizon. George Blankenship, a former Apple and Tesla exec who built the retail experience for both brands, said no less than 20 times that the c-store industry is at an “awesome” stage of evolution and change. Jeremy Gutsche, CEO of Trendhunter.com, urged us to shed our “farmer” DNA (complacent, repetitive, protective) and start acting like hunters (insatiable, curious, willing to destroy). And just about every other presentation mentioned Amazon Go, Uber, Wal-Mart, drones, electric vehicles or all of the above.
“Someone is going to revolutionize your industry,” Blankenship said. “Just one question: Is it going to be you?”
Who Owns Disruption?
We’ve been hearing this for years, right? I even cringe to write the word “disruptive”; it’s on the verge of jumping the shark. And yet there is something very palpable about the shifts we are witnessing. Suddenly, the change is too fierce, the opportunities too vast and the stakes too high not to take heed and dive into the disruptive tide.
Because that’s the beauty of disruption: No one owns it. Just like we don’t own the concept of convenience. It’s ours to have, and it’s also ours to lose.
We just spent the past two issues of CSP talking about Amazon and Wal-Mart—two non-c-store retailers getting into the small-box game. But are they really “non-c-store retailers”? At what point does “them” become “us” and the silos between segments fall for good?
One of my biggest fears for our industry is that our definition holds us back. It keeps us from thinking beyond the four corners of the box and morphing stores into something wholly new. Forget dollar, drug, mass, quick service, fast casual, digital, physical—tear away the confines of “convenience store” and see what ideas, strategies and opportunities rise up.
Because it really does come down to the store. As the dichotomy between fuel volumes and margins goes on, as long-term fuel usage continues to decline, it’s the retailer with a stronger in-store offer and customer service that will win the race.
And consider this: As fuel margins remain tight and long-term fuel consumption goes down, what does that mean for that age-old puzzle of getting customers away from the pump and into the store? If they’re coming to the pump less over time, that’s even fewer folks you have a chance at converting to in-store shoppers. Now’s the time to get them hooked on your incredible backcourt.
So how can you build a unique in-store experience that will ride the wave of retail disruption on the horizon? It’s up to everyone in the industry up and down the chain, from CEOs to category managers, as well as suppliers, who are all facing their own consumer-driven disruption.
Ball’s in Your Backcourt
Is it ironic that I’m challenging us to lead with the backcourt in an issue dedicated to the forecourt? Not at all. It actually makes a lot of sense.
For one, think about what cheap gas has done for your business in the past few years. According to retailers in our annual Outlook Survey, the biggest effect it had was to drive traffic into the store. Fifty-nine percent of retailers told us they were taking their optimism and strong business conditions and remodeling or refreshing their stores, and 49% plan to increase emphasis on inside sales. Meanwhile, 80% of retailers said they don’t plan to make changes to their fuel offerings this year.
Next, take a look at our inaugural Fuels 50 (p. 24). We worked with OPIS to identify not simply the fuel retailers with the biggest volume, but rather those with the best “market effectiveness,” calculated by dividing a brand’s market share by its outlet share. Do that, and who rises to the top? Buc-ee’s, Wawa, QuikTrip, Sheetz, RaceTrac—all fuel retailers who have thrown a lot of brainpower, capital and expectations at the store experience.
And then there’s the future of fueling itself. As we explore in “The Forecourt of the Future” (p.33), potential auto-industry and fuel disruptors such as electric vehicles, hydrogen fuel cells and autonomous driving will greatly change the retail fuel offer—and your business model in the long term.
So what will be the relationship between your forecourt and backcourt in the next few decades? What opportunities await if you toss aside the constraints of segment definitions? How can you create a wholly differentiated and uncommoditized retail experience?
Abbie Westra is director of Winsight’s Retail Content Group. Reach her at awestra@winsightmedia.com.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.