Back to Basics

Convenience retailing has enjoyed a relatively safe position at the last mile of the consumer journey. We’re quick, efficient and within a 10-minute drive for 93% of Americans. While big-box retailers, consumer electronics stores and others have struggled to respond to e-commerce and changing consumer habits, our industry has experienced comparatively few disruptive challenges.

This may not always be the case. Consider the mobile phone app GoPuff, which operates in more than 30 cities and bills itself as a replacement for convenience stores. GoPuff promises delivery of thousands of products in 30 minutes or less—salads, snack bars, cookies, ice cream, soda and even alcohol in markets that allow it. With a paltry $1.95 delivery fee that’s waived for orders over $49, the service is well-positioned to capture impulse purchases and build consumer loyalty.

Another unique challenge comes from Cargo. This new service aims to transform Uber and Lyft ride shares into mobile shopping experiences. The selection is small, of course, but the offerings include c-store staples such Red Bull, RxBars and lip balm. Cargo aims to reach more than 20,000 drivers this year, and its promise of an extra $200 or more in monthly income is sure to appeal to the many cash-strapped Americans who participate in the gig economy.

When considered alongside additional competitive threats such as the continued expansion of food delivery, increased competition from coffee shops and QSRs, and the continued growth of the dollar store sector, it’s clear that retailers can’t rely on yesterday’s playbook to remain relevant tomorrow.

Experiential retail has become a bit of a catchphrase lately, and for good reason. There’s a growing awareness in other retail sectors that brand differentiation through customer experience is essential. Today’s customers have choices. They don’t have to settle for dirty, boring or unremarkable.

The convenience industry isn’t that different. Many customers are apt to regard one brand of fuel as interchangeable with the next, and what if they want a snack or beverage? I’ve visited countless convenience retailers across the United States, and it’s a safe bet that I’ll find many of my favorite snack bars, mixed nuts, sparkling water, sugar-free energy drinks and chewing gum at any location I encounter. Why should I choose one store over the competitor across the street?

During a recent road trip, I came across billboards for a Sapp Bros. travel center near Harrisonville, Missouri, advertising “Mom-approved” restrooms. Inside the store, I discovered some of the nicest restrooms I’ve encountered in any retail setting. They have modern decor, recessed lighting, sparkling clean floors and stalls in individual rooms rather than separated with flimsy dividers.

I shared this story with a friend who dismissed it as “basic stuff.” He didn’t think it was innovative enough. But the station’s online reviews say otherwise. The customers love it. As other retailers seek to differentiate their brand and boost foot traffic, a renewed focus on the basics of the customer experience might just be the answer.

Beyond Gas Prices

Cheap gas and a convenient location are often said to be the primary drivers of consumer visits, and industry surveys typically reinforce this idea. After all, does anyone really want overpriced fuel? But a closer examination reveals that the customer experience now plays a significant role in whether a station drives visits or deters them.

When Market Force recently examined the issues that influence where consumers refuel, it was no surprise that 73% of respondents chose gas price. But 53% of respondents said they care about the quality of lighting, and 47% were concerned about the perception of safety. Other customer experience issues ranked highly as well. Thirty-nine percent valued a previous good experience, 37% said that the speed of payment authorization is important, and 31% were concerned about the appearance and maintenance of the site.

Today’s customers have choices. They don’t have to settle for dirty, boring or unremarkable.

At GasBuddy, we frequently explore this issue by pairing location data with station ratings submitted on the mobile app. Online ratings, after all, are a reflection of the customer experience. In GasBuddy’s 2017 Foot Traffic Report, we examine stations near interstates and show that those with above-average outdoor lighting ratings capture 50% more visits between the overnight hours of 9:00 pm and 5:00 am than those with below-average ratings. Similarly, our Q1 2018 Foot Traffic Report shows that stations with above-average overall ratings capture nearly 25% more visits than their below-average counterparts.

Prices still matter, of course, but their comparative influence may be declining. While 58% of respondents in the most recent NACS Consumer Fuels Survey say that gas price is the most important factor when purchasing gas, that’s a 13-point drop from three years ago. It will be interesting to see what respondents say next year if the current spike in prices holds; but again, perhaps there’s just more to the story. The Consumer Fuels Survey also shows that 45% of consumers went inside the convenience store during their last visit—a 10-point increase from three years ago.

At a time when retailers are trying to build loyalty, the customer experience is one way to achieve brand differentiation in a way that resonates. According to Kantar Retail’s most recent Breakthrough Insights report, roughly half of convenience store customers (51%) tend to visit whatever location is most convenient, while the other half (49%) tends to visit a specific store. But a closer look reveals that certain retailers have found additional success with loyalty. Seventy-two percent of Wawa’s customers say they tend to visit a specific store—meaning, more than likely, they’re loyal to Wawa. Sixty percent of QuikTrip’s customers said the same, as did 58% of those who visit Sheetz. Mind you, these are three brands that consistently provide a top-of-class customer experience.

The First Handshake

Mike Zahajko describes the forecourt as the “first handshake” that welcomes customers into the store. It sets the tone for the entire customer experience. As the vice president of sales at Maple Valley, Washington-based CAF Outdoor Cleaning, Zahajko has worked with many retailers on this issue.

“Our industry is unique since a large part of the customer experience exists outdoors,” he explained. “When customers visit dollar stores, coffee shops and quick-service restaurants, they park the car and walk inside. Many of our customers spend time at the forecourt before taking that step. This is a challenge, but it’s also an opportunity to drive in-store traffic and differentiate your brand.”

There are of course many ways to create and maintain a quality forecourt experience, but retailers would be wise to consider programs that pair well with existing operational strategies.

“Convenience retailers are in the business of saving time, but store-level employees often lack it. They’re busy. They have many duties,” says Scott Apter, president of Apter Industries in McKeesport, Pennsylvania. Since the early 1970s, Apter has worked with many retailers to develop effective cleaning programs.

“Years ago, I sat through a seminar about a new coffee machine that did a lot of great things—but it took nearly an hour to clean,” Apter said. “Our industry doesn’t have time for that, and the same principle applies to your strategies at the forecourt and in the store. We help our customers choose products that get the job done in the least amount of time. That’s the best way to ensure employee buy-in and consistent execution.”

But it can be challenging for retailers to maintain a consistent experience across a large number of locations—especially for fuel brands that work with a variety of independent operators. As I explained in an education session at the 2017 NACS Show, one of the most effective ways to do this is by monitoring online ratings and reviews. This real-time feedback enables retailers to identify low-performing outliers and stay aware of issues as they occur. In doing so, they can make necessary corrections and protect their brand’s reputation.

Appearance Matters

I recently visited a new location from a major retailer with the goal of buying lunch. Inside, however, I discovered that the indoor seating was covered in dried food, wrappers were strewn about, and nobody seemed to care. A quick look at the station’s online reviews revealed that these, and other issues, had been going on for months.

I’ve encountered similar situations at other retailers. They have the right ideas, but either the store design or the operational execution is off.

“We would be foolish to think we can succeed at foodservice without changing our stores,” said Scott Willy, creative partner at Three Sixty Group in Indianapolis, Indiana. Willy works with leading retailers in both the United States and Canada, including Ricker’s, High’s of Baltimore and Kwik Chek.

“Years ago, the industry exploded with franchised grab-and-go options that were sold through existing store formats, using hot boxes, without changing the physical area around them,” Willy said. “This was good, because we conditioned customers to understand that they can find decent food at a convenience store.

“But it doesn’t work that way with proprietary foodservice. If you drop a kitchen into your store but don’t change the experience around it, then it’s unlikely to succeed in the long run. Customers don’t want to eat a fresh salad or homemade pizza while staring at motor oil. [The store] has to look and feel like a foodservice destination.”

The same principle applies even when retailers have branded foodservice programs. Stores can offer chicken from Krispy Krunchy, Chester’s or Champs—or pizza from Hunt Brothers—but they’re unlikely to reach their full potential when the food is placed in a dimly lit corner, bearing the scars of heat lamp overexposure. Food takes on a remarkably different appearance when it’s presented attractively, as it is in a proper quick-service restaurant.

It’s also important to consider the shelving and displays used in the rest of the store. Outdated, almond-colored gondolas don’t exactly complement the ambiance of a modern quick-service or fast-casual restaurant.

According to Jerry Price, retailers should view product displays as an extension of their customer experience. As the vice president of sales and marketing at Mobile Merchandisers in Mount Vernon, Washington, he has a lot of exposure to what works.

“Retailers and brands need to work even closer to enhance the in-store experience,” he explains. “The days of ‘I will install this free rack to increase sales’ are going away. When you spend a lot of time researching or developing products, and place them on temporary displays or shelves that look cheap, that sends the wrong message to customers. Everything inside the store is part of your brand’s image. That’s why we like to say, “Doesn’t your brand deserve better?”

And when in doubt, don’t forget to clean the restrooms. “Restrooms are the Achilles’ heel of our industry,” said Scott Willy. “Who among us would regularly visit a restaurant with dirty restrooms?”

Aim for ‘Third Place’

Howard Schultz, who until recently served as the CEO of Starbucks, described the popular coffee chain as a “third place”—a location away from home and work that people make a regular part of their routines.

When Kum & Go’s new marketplace stores began appearing around Des Moines, Iowa, I immediately began using their indoor seating as my third place. The design is perfect for anyone who wants to step out of the office and work on a laptop. The stores have expansive windows with plenty of natural lighting, granite bar countertops, nice tables and chairs, polished concrete floors, free WiFi and plenty of delicious snacks.

Since then, the word has gotten out. I often see police officers meeting for lunch, local residents discussing the news over coffee and pastries, and business professionals getting some work done on their laptops.

Sometimes a great experience really does make a difference.