HOUSTON — Nearly a year after opening its doors, Shell’s first U.S. retail concept in years is setting the stage for future growth.
Shell Select debuted in July 2018 in Louisville, Ky., at a 2,200-square-foot site owned by Estepp Energy, a Shell distributor based in Lexington, Ky. It marked Royal Dutch Shell’s return to retail after leaving that business as part of a larger shift by major oil companies toward more profitable upstream activities in the early 2000s. While Shell continued to open company-operated sites overseas under the Shell Select brand, it transitioned its U.S. offer toward distributor-ops, which dominate the approximately 13,000 Shell-branded sites here.
The Shell Select concept looks wholly unlike the major oil’s earlier retail concepts, with a modern ambience, neutral-toned trims, chef-designed foodservice menu and local products to connect the site to its neighborhood. Shell also invested in category management and marketing platforms for the concept to drive loyalty, sales and profitability.
Juan Kemp, general manager of North American operations for Shell Retail, Houston, shared an update with CSP Daily News on Shell Select, including plans for a franchise. ...
On the consumer response
At CSP’s February visit to the Shell Select concept, Shell executives reported on the favorable early customer response, with a return rate of about 90%. At the same time, the team was trying to be responsive to customer needs and tweak the offer as needed—for example, rearranging fixtures to better highlight the Deli by Shell foodservice counter. This activity continues.
“Consumer feedback has been extremely positive and we continue to update and refine the various offerings at that location and more broadly into the evolving concept,” said Kemp. “We are constantly listening to our customers and retail partners and have thus made several adjustments to our traffic flow within the layout of the location, the assortment and variety of customer offerings and the operations at the location to elevate the customer experience even further.”
On Deli by Shell
The highlight of Shell Select is the Deli by Shell foodservice program, which offers freshly prepared sandwiches and espresso-based beverages. The concept also elevates local Louisville brands such as gourmet doughnuts from Nord’s Bakery and coffee from Good Folks Coffee Co.
“We’ve created an offer that includes food and beverages that consumers would expect to find at a convenience store while also including some locally inspired items,” said Kemp. He noted that the Kentucky Hot Brown—a hot open-faced sandwich with turkey and bacon—is a favorite at the Louisville location.
“We are investigating a number of options to ensure we exceed consumers’ expectations while delivering the quality and consistency required to develop a strong brand and succeed in the market,” Kemp said. “Our menu is built on delivering delicious, high-quality, chef-inspired options for customers on the go. Specifically, we have a locally based chef that develops the menu with quality, freshness and variety top of mind.”
On frictionless opportunities
Shell has introduced the ability to pay for fuel from its mobile app or from a vehicle, and it is testing mobile fueling in Houston as ways to reduce the friction of the fuel purchase. As the frictionless revolution of retail plays out through scan-and-go concepts such as Amazon Go and the addition of touchscreens and drive-thrus at c-store chains, Shell is weighing its own approach for Shell Select.
“We definitely see such technologies as key enablers to help us deliver our integrated offer and further meet the needs of customers on the go and to drive their preference and loyalty to our stores,” said Kemp. “We are currently evaluating a number of alternatives and will be looking to implement in the near future.”
On a potential franchise
When Shell began developing Shell Select, it had a future franchise in mind, with a possible rollout within a year to 18 months. As Gyongyver Menesi-Bondar, head of convenience retail for Houston-based Shell Oil Products US told CSP during its February visit, the key was developing a concept that “needs to be relevant and sticky for the wholesalers as well in the long run.”
As Shell approaches the end of its original timeline for forming a franchise, it does not appear to be ready yet to pull the trigger. Kemp said Shell continues to develop, test and refine Shell Select. “Once this is complete, we will develop our rollout plan,” he said. “Right now, our focus is on learning from the experience at the Louisville location and refining the customer experience and offerings in hopes of expanding more broadly across the Shell network in the future.”