The ABCs of Convenience

Jeff Rogut
July 12, 2016: From the moment they go to kindergarten, children start learning the alphabet; the basic ABCs that they’ll use to communicate, read and decipher the world around them for the rest of their lives.
In our industry, just as in others, there are some fundamental basics – or ABCs – that we should all understand. So consider this version a refresher course of sorts, a useful and interesting reminder about the fundamentals of convenience and also questions for the future……and also develop your own ABC’s of Convenience.

Attitude: so much depends on the attitude of the company: be it the franchisor, franchisee/operator, staff and supply partners. The ’right’ attitude of striving to provide the best imaginable experience and offer – every single time – should be what we aim to deliver for our customers. In an increasingly competitive environment a positive, winning and can-do attitude is something that should define us.
Beverages: already a major category for our industry but also one which offers so much more potential. Hot, cold, energy, calming, enhanced, milk, water, coffee, tea…….the list goes on. Our industry should be a fertile ground for innovative new beverages as well as a source of the proven basics. Tastes change and shifts in focus, such as healthier options, sway consumer choice. We need to be the first choice for beverages on the go, as well as take home options where appropriate for our customers.
Convenient: our core reason for being is to be convenient but while location is critical, it’s so much more than that. Having the products customers want over extended hours in modern, clean and safe stores is an imperative. There are so many alternatives already and the choice for customers will only grow. What other products and services can you offer to time poor customers that makes their busy lives easier?
Design: making the customer’s journey through a store inconvenient is a design relic of yesteryear. Today, design must save the customer time and be hassle free. Frequently bought items must be easy to find, together with suggested other products that they may not have considered before coming into the store. Good design makes good commercial sense.

Excellence: like attitude, excellence should permeate through an organisation, be it a multi or single store enterprise. Excellence in service, offer, staff and making customers welcome. Offering a great experience and value. Excellence also means complying with all laws and regulations governing safe food handling, staff awards and everything in between. It means never compromising.
Fresh food: this is the future for our industry, just as we see other markets embracing food to go. Good quality is paramount, whether food is prepared on site or delivered regularly to ensure availability and freshness. Sandwiches with three days shelf life are not fresh – fresh means made/delivered today, then sold today. Hot pastry products at the right temperature for the recommended holding times. Food handling and storage of the highest order. One weak link will tarnish the image for the industry, and take years to try to rebuild the efforts many stores have put in over recent times. We are building a reputation as a genuine fresh food option. It’s up to us to protect this reputation.
Grocery: part of our range but we need to ensure the pricing strategy is right. Prices two and three times that of supermarkets just creates the perception of poor value across the store. Owners have the freedom to price products as they wish, but being more competitive in a category that contributes a small percentage of sales may in fact mean that more stock on shelves is ‘at risk of being sold’ rather than gathering dust and negatively affecting the image of the industry. Suppliers also have a role to play to ensure we are competitive.
Healthy options: as the focus on obesity and other health issues grows, we need to offer a selection of products with broader appeal than what we may previously have been used to. Many stores are already on the way. This does not mean that we ignore our core customers, rather offer products that may encourage visits by customers who were not aware of the offer, or offer other choices to customers considering their options.
Innovation: this should be the lifeblood of our industry for both retailers and suppliers. Many customers visit our stores multiple times weekly. How do we keep them coming back with fresh new products? Look at products that new suppliers may have. Seek out exclusive products or limited stocks of items so that your store is renowned for innovative and creative retailing. Innovation is a buzz word for a reason: it makes us more competitive today and prepares us for tomorrow.
Japan: a country where convenience stores thrive on innovation, where the fruits of innovation are borne each day. Multiple visits daily by customers means that stores must meet demand for new, fresh and exciting products and services, offering great value with impeccable service. The industry in Japan provides many lessons that we may learn and adapt for our market.
Kaizen: “a Japanese business philosophy of continuous improvement of working practices, personal efficiency, etc”….. another lesson that we can take from Japan. Never be satisfied and rest on your laurels. Competitive or regulatory threats will arise when you least expect them, often from unexpected sources, and likewise new opportunities will arise for which we must be prepared – and willing – to capitalise. This brings in the next K, knowledge. Knowledge is power, but how much do you really know about your customers? Think about what drives customers to your store, who those customers are, and what you can do to better provide them the products and services that they’re looking for. It might be something they know they want, it might be something they’ll discover in store. And while you’re at it, think about learning more about them, perhaps through research, surveys and data systems. You can never know too much.
Local: a real opportunity to support local products and suppliers as well as organisations, so that a store’s connection with its community is deepened. We’re a fixture in local communities, we employ local people, so be active at the local level.
Marketing: more than just advertising, marketing is absolutely critical in today’s competitive environment. The store itself is a great vehicle, but what are the other opportunities? Social media, website, local groups, loyalty programs, digital signage offering day part promotions…….the list goes on. Be aware of some of the pitfalls of poorly executed social media campaigns and always seek professional input and advice.
Networking: is really important between retailers and their suppliers though trade expos, industry association events, study tours, awards nights, summits and other opportunities. But networking is also important for retailers and suppliers to connect with their peers. There is such a wealth of expertise with many excellent people in our industry that may be drawn upon.
Own brands: just as supermarkets have expanded their own brands, it is similarly an opportunity for convenience stores. National brands are vital to ensure customers see readily recognisable products, however as store image and quality improves, opportunities for expanded own brand offers certainly should be considered and embraced where appropriate.
Petrol: a core part of our offer, but changes are afoot. Electric vehicles, hydrogen powered vehicles, self-drive cars – once science fiction are becoming science fact. Are we ready for these changes? What will they mean for our forecourts, future store designs and overall offer?
Queues: are not what we should be about. Quick, efficient and pleasant service is crucial. Some stores in the USA offer self-checkouts, supervised by a team member that also serves tobacco products. Is that an option for very busy sites that offer customers efficiency whilst containing staffing costs?
Revenue: is crucial to business success, just as profitability is. Benchmark your performance against the AACS State of the Industry report to see where you may have opportunities for either revenue or margin growth. Never cease the pursuit of new revenue streams that might complement your offer.
Safety: absolutely crucial for customers and staff and all who visit stores. Safety encompasses food safety, forecourt safety, staff and customer safety against robberies, spills and anything that could potentially harm anyone or the environment. Our industry has always had a strong focus on safety and this must continue.
Tobacco: an important and legal category sold in our stores subject to display and age restrictions. As responsible retailers it is our duty to ensure that we only sell legally acquired products to adults. Sales to minors are punishable by law and we will not defend or excuse any retailers found breaking the law. Retailers should work with authorities if they encounter sellers of illicit tobacco, as these will not only affect their business, but the products may be harmful to those using them.
Uncomplicated: customers increasingly complain about being time poor. Convenience stores can simplify their customers’ lives by offering time saving, uncomplicated shopping solutions which will be valued.
Value: it’s absolutely critical that convenience stores offer the value of time saving and fair pricing. As the gap between supermarkets and convenience stores grows, we risk being perceived as too expensive even though we may not have the volumes or supply chain that others do. This is particularly an issue for KVIs [known value items] that customers are regularly exposed to through promotions and advertising. Regularly shop competitors and do price checks, talk to suppliers and distributors where you feel that pricing is too far out, allowing for reasonable margins. Perhaps review prices of some basic lines that may be stocked but do not sell in any volume – by being more competitive, store image and sales might improve. Value is an absolutely crucial area for our industry as competition ever increases.
Wi-Fi: customers on the go increasingly seek Wi-Fi and by staying longer in your store, particularly if you offer some seating, you may in fact sell more beverages and food items when they are there – aside from providing a valued service.
Xerox: and associated services are still very important and hold potential for our industry. Parcel collection and other services needed locally that may be underserviced should be evaluated and will differ from store to store.
YoY: year on year sales performance is one measure of how your business is tracking. Look at ABS data, industry reports, check with suppliers to see how you are tracking relative to competitors and other industries selling similar products. We are in a dynamic industry filled with opportunities so we should be confident of continued profitable growth.
Zestful: “full of energy and enthusiasm”…… we operate in a dynamic industry that has seen change and in some cases driven change. We are an energetic industry with thousands of energetic and enthusiastic people. This is the spirit we need to convey to our customers each and every time they choose us over a competitor.
This list, whilst not exhaustive, aims to provide food for thought; some prompts and refreshers to which you will no doubt add further words and concepts – and importantly actions – to ensure a sustainable and profitable convenience business.