Take Ownership of the Four C’s
Lower prices, clean stores and healthy food options top consumers’ c-store wish list
The industry is changing for the better, but it still has work to do.
Jeff Lenard, vice president of industry initiatives for NACS, shared with SOI attendees evolving and nuanced consumer perceptions of convenience stores based on the association’s research.
“I want to talk about different ways we can own convenience—whether it’s about the customer, whether it’s about the community, whether it’s about choice, whether it’s about cleanliness. … What are the customers saying?” he said.
Referencing the NACS reFresh initiative, Lenard pointed out that it’s about more than fresh, nutritious and healthy food: “It’s also about community. It’s about jobs. It’s about, ‘What are they saying about us?’ ”
Four years ago, NACS conducted a benchmarking survey asking consumers a host of questions about the industry and their take on it: what can the industry do better, what it’s doing well and what it can do more of.
“It came down to three things. They like the basic value proposition; they like convenience,” he said. “On healthy foods, there are some issues related to that. They didn’t necessarily think that we sold very healthy foods. What can we do about that, both in changing the perception and possibly what we sell in stores?”
The third element is a persistent theme in the industry: the NIMBY (not in my backyard) sentiment. Or, as Lenard called it, BANANA: build absolutely nothing anywhere near anyone.
“We were perceived as being disconnected with the community and we really didn’t have an opportunity for advancement,” he said.
Then, in January 2017, NACS surveyed consumers again. It asked a simple question: If you could ask a retailer to do one thing, what would it be? Lenard admitted it was no surprise that the No. 1 answer was to lower prices, particularly at the gas pump. But the second highest response came from those who want the stores to be cleaner. “That relates to everything else that relates to our image—whether it’s food, whether it’s community,” he said. “This will drive our sales.”
Own the Restroom
Lenard walked the audience through specific ways consumers said they want to see cleaner stores, beginning with the restroom.
NACS asked consumers in a May 2016 survey about their upcoming summer road trips, and how and when they might stop along their drives.
“The No. 1 thing they said was ‘Use the bathroom,’ ” Lenard said. “Seventy percent of consumers say on their Memorial Day drive, they will be using the restroom. So when we talk about owning convenience—owning the ‘c’ in convenience, owning the ‘c’ in customer, owning the ‘c’ in all these other elements—I want to introduce a new one. It’s not brand-tested yet, but we want to own the ‘c’ in commode.
“The first purpose-built gas station in the United States was built in 1913. The first gas station program to talk about restrooms was in 1933. So for the first 20 years, people were using gas stations and really holding it in.”
However, in 1933, oil companies began focusing on restrooms as a central part of their operations. Lenard said gas stations at the time were characterized by the acronym TBA: tires, batteries, accessories and all affiliated services. But restrooms were also a big part of their original image. After the Great Depression and World War II hit, the industry lost focus on the importance of restrooms, eventually leading to the poor image of gas station restrooms in recent years.
“When 70% of people use our restrooms, and that’s the first thing they do, are they going to buy your food?” Lenard said. “That’s the central question you have to ask if you’re going to grow your food sales, if you’re going to sell something else.”
The importance of clean restrooms is evident in how both consumers and leading retailers respond to the issue. Lenard shared a video from a customer about a Shell restroom in the Philippines; the customer
felt compelled to shoot the video simply because it was so nice and clean. He also cited a U.S. c-store he once visited, where the restroom included a one-way mirror so people inside could see out but people in the store could not see in. The owner said he stole the idea from a New York nightclub.
Kwik Trip and Sheetz have signs in their restrooms that direct customers to call their leadership team if they have any concerns. They’ve found that showing they care about a customer’s restroom experience is the real win, and they hardly receive calls as a result.
Lenard also referenced the “amazing bathroom” at Slovacek’s in West, Texas, and how RaceTrac uses humor throughout its store, including in the restroom, where the men’s room sign says in small print: “Leaving the seat up is allowed.” Simple things like these help emphasize a clean, even enjoyable restroom experience.
Lenard challenged the audience to think about a customer’s visit as beginning not when they walk into the store, but instead when they walk out of the restroom. And keep in mind that once they walk out of that restroom, half of all consumers say they go into c-stores to buy a beverage.
“QSRs are food first; I might get a drink. Our stores are drink first, [then] might get some food. How do you build off that?” he said.
The Shift Toward Healthy
While c-stores still have work ahead to regain a positive perception of their restrooms, consumers are rating the industry’s healthy-food options more favorably. In 2013, 1 in 5 customers said c-stores sell healthy foods, but in 2017, 1 in 3 said as much. “The customers we want—the 18- to 34-year-olds—40% say they have noticed ‘fresh’ inside of stores. So we have a great opportunity to sell to those customers,” said Lenard.
NACS surveyed consumers about salads, fruit and nuts, and Lenard emphasized that even though nuts are packaged, they are still considered healthy by the consumer.
Mainstream media is also playing a role in improving consumers’ perception of the industry. Lenard referenced a March 2017 New York Times article titled, “Honey, Please Pick Up Some Grilled Tilapia at the Gas Station.” The reporter, the Times’ lead food critic for 12 years, has eaten at 5,000 restaurants and took note of the increase in quality of c-store foodservice.
Figures at the highest points in government also are noticing the industry’s improving image and increasing healthy offerings—most notably Michelle Obama.
While she previously was a critic of the industry, in 2016 she wrote a letter to NACS saying how enthusiastic she is about what stores have done to offer healthier foods. This change is in large part thanks to the growing participation with Partnership for a Healthier America, whose members must follow strict criteria to prove they are making healthy places for people to shop and work.
The Breakfast Opportunity
With this evolution comes more opportunity, Lenard said. While restaurants such as Denny’s and McDonald’s have been focusing on breakfast, Lenard believes c-stores can do it better than anyone else. Consumers wake up aspirational toward the idea of healthy, so when they walk into c-stores in the morning, they’re ready to buy something nutritious.
“We have the opportunity—whether they’re coming there for a fill-up, [or] for something else—to move that,” he said.
And while 50% of Americans eat breakfast every day, they aren’t necessarily eating it at home. Millennials in particular don’t want to eat at home, Lenard said, because they’d rather spend their time doing something else. Again, this creates an opportunity for c-stores. Chains capitalizing on this idea include Wawa, which offered free coffee on Fridays in March to customers who downloaded their app, and Flory’s, which offered the same to drive-thru customers.
NACS asked consumers what they eat for breakfast, and c-stores essentially sell all of the items they listed, including cereal, oatmeal, fruit, yogurt and bagels, Lenard said. Doing something as simple as calling out “protein bars” on a sign can alert customers to a store’s healthy breakfast offerings.
Along with lower prices and cleaner stores, consumers also told NACS they’d like to ask c-store retailers, “How fresh is your food?” Lenard urged attendees to consider how they are telling the freshness story. “[Don’t] just merchandise it, but show it,” he said.
‘C’ Is for Community
NACS data shows the industry is moving the needle on the perception of stores as positive for the community, but there’s work to be done. Lenard encouraged retailers to show their connection to the community. Even if it’s just via a simple sign, “tell your story about locally owned stores,” Lenard said. “People like local, however you’re going to define local. Get credit for it.”
And when consumers who oppose c-stores were asked what the industry could do to improve its image, one of the top answers was to offer healthy foods.
Another potential tool for retailers to better work with their communities is to connect to the 17% of adult Americans who have worked at a c-store, gas station or corner store. “Eighty-six percent of people who worked at convenience stores said the experience was valuable,” Lenard said.
The positive feedback is an opportunity to address community members who are concerned about labor issues, such as where the minimum wage sits, he said. “Most of them agreed that the salary they were paid was commensurate with their experience.”
He closed his presentation by stressing the importance of taking everything you do to the next level—whether it’s community, care, clean or commode. “Don’t just do what you have to do,” Lenard said. “Consumers expect more.”