PHOENIX — Veterans of convenience retailing can attest to the fact that the industry has evolved greatly in the past 10 years. We have moved from just selling other people’s products—known as traditional retail—to creating and selling our own products, private CPG brands and ready-to-heat or ready-to-eat food products.
In the wake of this evolution, there are now two areas of competitive positioning: product creation and marketing for proprietary items. What we create must align with a specific consumer desire, facility footprint and method of execution. And depending on what we create, the mode of reaching and acquiring the consumer for a line of products may differ vastly.
The first step: creating the product.
Learn From Example
When I worked at Circle K more than two decades ago, we tested and considered many types of sandwich concepts, from branded programs such as Blimpie to our own deli concept and a commissary program. For the commissary program, we created cold sandwiches with a 48-hour shelf life. Some on our team wanted to compare these excellent sandwiches to made-to-order programs such as Blimpie or Subway.
I found this to be like comparing a Mustang convertible to a VW Beetle convertible: Each is a convertible, but the consumer positioning and experience is vastly different. No matter what someone does to a VW, it does not have the same racy appeal of a Mustang. It’s a rule of product marketing that has stuck with me all these years: Correct positioning of product creation must be kept top of mind, especially in this new era of proprietary retailing.
As Bob Derian, a former foodservice leader with RaceTrac and now a partner with the Business Accelerator Team, says, “We may create a great product for our consumer, but it may not be the best product.”
That is, marrying the consumer profile to the product idea and finding the best quality at the optimal price creates the magic for proprietary product sales, whether for packaged items or foodservice (e.g., Godiva chocolate isn’t necessary to make a great chocolate mousse).
A systematic approach to product development provides more potential for success. Only after consumer demographic and psychographic work is completed for a store group or segments of a store group can a meaningful product development process start. This means identifying competing products.
Questions to ask include:
- Where is the consumer currently buying this type and style of product?
- Does my establishment have attributes comparable to those locations? Are we reaching a similar consumer?
Going back to the sandwich example, the competing product for a great overwrap sandwich—plastic-wrapped on a black deli tray to look just-made—is the deli area of a grocery store. This is the competitive set from a product standpoint, not a made-to-order concept such as Blimpie or Subway.
Define and Refine
Next, create a decision tree for product development, defining goals and a mission for the items being developed. Then list success factors to consider, such as:
- Taste.
- Costs and potential revenue.
- Ability to execute at the store level.
- Cooking platform and hold times.
- Hot and cold storage.
- Preparation requirements.
Only by identifying the factors of success upfront will it be possible to accurately measure and evaluate results.
And not all product launches will be successful. If a product fails, it is important to determine where the process broke down and learn from those mistakes.
Kay Segal is a founding partner with the Business Accelerator Team. Reach her at kay@thebateam.com.
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