Gathering in Kansas City where NACS was founded 60 years ago, more than 180 convenience retailer and supplier leaders safely came together in May for the NACS Leadership Forum—live and in-person.
The annual invitation-only event convenes retailers and suppliers to explore future-focused issues relevant to the convenience industry. The three-day forum is a powerful catalyst to align leaders, explore new strategies and fuel collaboration.
What’s Next
Kicking off the first day, Derek Gaskins, CMO, Yesway; Kevin Lewis, CMO, Circle K/Alimentation Couche-Tard; and Tracey Hughes, executive vice president, Wallis Companies, shared their perspectives on the past 18 months and what’s coming up next for the c-store industry.
NACS CEO and President Henry Armour, moderator of the panel, set the stage by sharing that he looks at major disruptions—like the pandemic—as a chance to reset the table, and any time you reset, new opportunities emerge.
Lewis of Circle K reiterated that starting with the consumer remains critical. Digital transformation was happening before COVID-19, and the industry was making reasonable strides, but then everything went “so much faster so quickly, and we had to begin to act like start-ups and e-commerce companies … Our ability to tell our story and have differentiated offers is even more important now that online has become a great equalizer.”
Hughes shared that Wallis couldn’t take the time to get something just right before it went to market. “If we did normal, we’d be left behind,” she said. But learning from failure is critical, and Wallis is seeing uptick in both customer counts and sales.
Gaskins of Yesway said that he and colleagues felt an even stronger sense of purpose during the pandemic. Customers would say, “thank goodness your foodservice is still open; this is the first time I’ve had a hot meal in weeks that I have not had to cook myself.”
When asked by Armour what eye-opening innovation across all retail was most noticed by panelists, Hughes shared that the pop-up phenomenon—brands going to where customers are—was most intriguing. “How can we bring our c-store brand to where people are?” she asked.
Lewis shared details about Ratatouille—a crowdsourced TikTok musical production created in six months. No one who participated in the production’s creation ever met in person, and the rights to produce the event were granted 24 hours before launch. The program aired for only 72 hours to 350,000 people and reached essentially the same amount of people as a combined two years of sold-out Broadway shows. The diverse crowd of participants generated $2 million for the Actors Fund.
“What can we learn from this?” Lewis asked. “How do we deliver on the consumer needs not only defined by our current capabilities but on the opportunities this whole new world provides?” he posed.
Gaskins touted QR codes. “What’s old is new again,” he said, and while this is the second time around for QR codes, “now they solve a problem.”
Armour asked if any of the companies represented changed the way they think around leading their teams and tackling labor issues.
“I’m a changed man,” said Gaskins of this past year. “To see our people risk their lives to go to work galvanized us, and it was powerful to witness.”
Lewis left attendees with positive feedback on the industry’s future: “Our ability to deliver as an industry against customer core desires is fundamentally different than what big box and dollar can do. We are a store of the community in ways no one else is.”
An innovative culture is the only competitive advantage [in business] today.
Innovation as Competitive Advantage
“An innovative culture is the only competitive advantage [in business] today,” according to Soren Kaplan, award-winning author of Leapfrogging and The Invisible Advantage and an affiliated professor at the Center for Effective Organizations at USC’s Marshall School of Business.
Kaplan, who presented on day two, stressed the need for businesses to innovate quickly and take advantage of the opportunities presented from disruptions caused by the pandemic, including changes in e-commerce, consumer shopping habits and digital technology.
The pandemic has inspired people to want to do good. “They are worried about climate change, and they want to reduce food waste, but plastic is the evil villain these days,” he said. “Plastic bashing will continue to increase, and doing good for the environment represents a business opportunity.”
He pointed out several examples of how businesses used innovative thinking in response to challenges. Chili’s saw sales crash as restaurants closed. In response, Chili’s created a digital brand called “It’s Just Wings” and used its underutilized kitchens to prepare wings and fries that were promoted and delivered by DoorDash. “Overnight they created a virtual pop-up brand, a $150-million-a-year business,” Kaplan said.
Another success is the startup Bottomless, which sells roasted-to-order coffee by mail. Each customer places her bag of coffee on Bottomless’ digital smart scale, which is connected to Wi-Fi. The scale keeps track of the package’s weight and communicates to the Bottomless team when the customer’s supply runs low. Then, another bag of coffee is automatically shipped.
“This is not just about coffee,” Kaplan said. “This platform could provide automatic replenishment on anything. It’s just another example of digitization of the supply chain and enhancing the convenience experience.”
So, how do business leaders create a culture of innovation in their own organizations?
First, define innovation for your organization. Are you in the food business or fuel business? Kaplan suggests that c-stores are in the “helping people in the morning” business or “meeting people’s basic needs any time” business. “If you broaden what business you’re in, you see new opportunities,” he said. And you always want customer feedback. “Convenience stores are a petri dish,” he said. “You can test things in stores and talk to customers in real time.”
Five Keys to the Future
Retail accelerated five to 10 years into the future over the course of just one year, and convenience retailers are thinking differently about how to meet shoppers’ needs, said Lori Stillman, NACS vice president of research.
Stillman said Gen Z, in particular, is going to be forever affected by the pandemic year that they’ve spent behind screens and social distanced from friends and extended family. This cohort prefers technology, self-service and personalization. They also lead in adoption of voice-based technology, making voice-based search a critical area that the convenience industry needs to figure out, Stillman said.
Leaders Innovate, Others Hesitate
There has never been a bigger opportunity for leaders to lead and innovate their way into a future that they and their teams can be proud of, Andy Ellwood, executive coach and former startup operator, told attendees. When chaos feels like the new status quo, leaders find ways to move forward with confidence and take calculated risks.
“What is the desire stack you most want to win?” he asked. “Dynamic leaders who are obsessed with solving a problem are leaders who are going to win.”
Ellwood advised figuring out pain points that customers would pay to eliminate. The pandemic caused a lot of us to say, “I don’t actually want to do that again,” Ellwood said. Retailers need to have “courage to continue to ask questions” to say, “This is the way we’ve done things in the past, but it isn’t the way that it always has to be done.” He added, “Find ways to disrupt yourselves internally. Find ways to ask questions that no one has asked.”
“This is a group that’s going to reshape how we must connect with them in the future,” Stillman said. The key question: How do we meet the future needs of these shoppers in convenience? Stillman asked. It comes down to five focus areas: innovation, safety, technology, service and experience.
Pay attention to innovation, which necessitates looking at the challenges the industry faces differently. All generations care about safety, so visible hygiene and cleanliness, along with good lighting, are table stakes.
“We cannot forget experience,” Stillman said. “As our world becomes increasingly digital, the importance of delivering an enjoyable experience cannot be dismissed.”
As our world becomes increasingly digital, the importance of delivering an enjoyable experience cannot be dismissed.
The industry needs to not only win the last mile but also capture the significant opportunities that come from winning the first mile: expanding the basket ring of the customer already in our stores. Food plays an important role. “Our foodservice offer is very well connected to our packaged beverage offer,” Stillman said. Think about food-to-go offers, take-home meals and comfort foods like mac and cheese and banana pudding—things that consumers showed during the pandemic that they were willing to buy from convenience stores. Americans have been cooking at home more but also have menu fatigue, so think about providing simple ingredients for shoppers to take home and make. Or suggest food pairings with beverages and desserts.
Continue to meet shoppers where they are and give them lots of options, she advised. Whether that’s private-label food and beverage items or taking friction out of the checkout process with technology. “Service is [also] so important—it’s at the heart of what we do,” she said. “We’ve got to get our staff engaging with shoppers” and make every customer interaction meaningful. As Stillman noted, “We have 165 million chances every day to offer a friendly smile.”
Loyalty-Building Experiences
For many leaders, both inside and outside the convenience industry, the pandemic produced a fundamental shift in how they listened to and crafted solutions that addressed customer needs, Joseph A. Michelli, Ph.D., said on the final day of the Leadership Forum. Michelli is an organizational consultant and author of Stronger Through Adversity: World-Class Leaders Share Pandemic-Tested Lessons on Thriving During the Toughest Challenges, among other books.
For his latest book, Michelli interviewed a cross-section of companies, from Airbnb to Zappos to Dairy Queen, to gather learnings from the pandemic and in particular, how customers have changed. “We have to look through the lens of the customer,” he said. “Provide people with what they want, when they want it, where they want it, as effortlessly, immediately, consistently, personally and memorably as possible,” he said. This applies to employees, too. “Happy employees equate to happy customers,” he said.
Customers still are going to expect clean stores, and they want value. “Loyalty programs really mattered in 2020,” Michelli said. “Customers wanted more than ever to be recognized for doing business with you.” Grab-and-go and curbside pickup showed customers that they don’t have to linger in stores or go inside at all. “We have to compete against other customer experiences that our customers are having elsewhere,” he said.
He prompted Leadership Forum attendees to write a legacy statement and build a lasting brand that elevates lives. “What do you want to be known for?” he asked. The universal lesson, he said, is that “adaptive human-centric businesses win!”