6 C-Store Execs on Retail Disruption and Fighting Back
By Samantha Oller on Jan. 23, 2018CHICAGO -- From this week's official debut of the cashierless Amazon Go convenience store to the buzz around electric and autonomous vehicles and the continued expansion of direct-to-consumer delivery, the c-store industry is seeing potential disruption from all sides, innovation aimed at stealing customers.
CSP Daily News asked some of the c-store industry’s leaders for their thoughts on disruption: where it is coming from and how they are getting in front of it with innovation of their own. Here are highlights from those conversations ...
1. Cumberland Farms
Ari Haseotes
CEO, Cumberland Farms, Westborough, Mass.
The reality is these disruptions ... can be destructive and have been to some industries: the impact of Amazon on the department-store channel or on the book industry. But they’ve also been creative destruction because they have resulted in the consumer getting a better ultimate product or service. You don’t go to the movie store today to rent a movie. You buy it on Amazon or Apple Music.
Another side is the huge opportunities it opens to order online and pickup in the store, or be a pickup point for Amazon. Or be in the business ourselves—order something and pick it up in our store. That’s what we specialize in, selling time and convenience. Our locations are at the intersection of everyday life, on the way to/from work, home and school. We are visible, accessible, easy to get in and out of. There are huge opportunities to take technologies and leverage them to create more convenient experiences for the guests.
The fear comes from … looking at what there is to lose, when there’s so much to gain.
2. Loop Neighborhood Markets
Varish Goyal
President, AU Energy LLC, Loop Neighborhood Markets, Fremont, Calif.
Our business strength has been our convenient locations, and 65% of what we sell is consumed within the hour. [Disruption] will happen eventually, once these delivery companies figure out how to get products to consumers the moment they need it. Then we can see a significant effect on our business.
The way we’ve combatted it is by focusing on what we do best and get better at it, and really provide top-quality ways for consumers to come to our stores, get the immediate-consumption item they want, and be innovative and different in what we offer.
If all this stuff happens with electric vehicles and autonomous vehicles, where no one owns vehicles, we are going to become more important. Uber won’t stop for 10 minutes for you to shop the store. Preordering will definitely be a piece of the business. Delivery—that’s a lot harder for our industry. We’re very fragmented and it’s hard to get enough scale. For the majority of our industry, we will have to do a partnership with DoorDash, GrubHub and others.
3. Alimentation Couche-Tard
Trey Powell
Director of marketing, Gulf Coast division, Alimentation Couche-Tard, Pensacola, Fla.
The fuel-consumption piece is on everyone’s mind. I’m not sure anyone has that figured out. In the long term, there’s more potential upside. How do we be a partner of choice for whatever the choice of fuel is or the mode of which these things will be powered? Folks will be on the go. One part of the trips issue is there’s more commerce online. A box shows up at the door, and you don’t need to make a trip. You consolidate trips. Fundamentally, the consumer will continue to be on the go, so how do you capitalize on that with a box en route?
4. Rutter’s
Scott Hartman
President and CEO, Rutter’s, York, Pa.
When a technology company comes into brick-and-mortar, I always say go for it. I’m not sure they always understand what they’re getting into. I’ve seen lots of companies come in, and many have left with bruises. More have left with bruises than succeeded.
Amazon is obviously a huge player, and a lot of their success is in how they have carved up the market. Regarding Amazon’s plans for Whole Foods, I’m really not sure where a 400-store chain in a country our size is going to in the near term. In the long term, OK, but you don’t dominate brick-and-mortar in a year or two.
5. Kwik Trip
Steve Loehr
Vice president of operations support, Kwik Trip Inc., La Crosse, Wis.
I think we're a disruptor in our markets.
It's how we do business. For a long time, we considered ourselves grocers who sell gas. Our stores sell an average of 450 pounds of bananas, while most of the industry says, "You can't sell bananas in a c-store." We say: Why can't we? We have fresh meat in our stores. We sell milk at the same or better prices than Walmart sells milk. We have our own bakery, so we sell bread competitively. So we are a disruptor in the towns we're in.
We look at things like Amazon and a lot of these consolidations of companies as opportunities for Kwik Trip. We're proud of our customer service. We're proud of our co-workers. People are talking about creating self-checkout lanes; we're talking about adding more lanes so our guests get more exposure to our co-workers and we can serve them better and quicker.
Yes, there are a lot of disruptors out there. Certainly, Amazon, the big box and others are disruptors. If we can continue to serve our customers, give them what they want at very competitive prices, then we'll continue to grow for a long time to come.
6. 7-Eleven
Joe DePinto
CEO, 7-Eleven Inc., Irving, Texas
We actually have a chart here at 7-Eleven that shows all of the disruptors across all sectors. It’s in every sector. It’s amazing. So I don’t see it slowing down; in fact, I think it’s going to be the absolute norm, driven by millennials and smartphone technology.
We need to be fully part of that value chain. Collectively, our industry’s perspective early on was that we were somewhat insulated from what was going on. It had been my perspective that some of the disruptors would zero in on immediate consumption at some point. It’s really the last area that they haven’t been able to fully crack. So having a strategy and moving quickly and aggressively are very important.
I tell our folks, "Don’t chase the competition." Have your own perspective, understand the external environment—not only what the entire landscape looks like, but where the consumer is going. And then, have your own point of view and plans and strategies.
It’s not our goal to disrupt. It’s our goal to deliver on what the consumer wants, but some have been slower to do that than others. In that sense, I think we have been a disruptor.