Wawa’s Gheysens Talks Innovation

NACS CEO Henry Armour discusses risk, experimentation and the future with Wawa’s CEO.

December 23, 2020

By Pat Pape

ALEXANDRIA, Va.—Wawa, with 850 locations and more than 35,000 associates, is an iconic retailer in the Mid-Atlantic area, famous for freshly made, built-to-order sandwiches and hoagies. But the Pennsylvania-based chain has never been complacent, and company leaders constantly look for new products, services and technologies that will help them keep up with consumers’ changing demands.

Speaking with NACS President and CEO Henry Armour, Chris Gheysens, president and CEO of Wawa, explored how the c-store chain experiments within its portfolio to determine which innovations can best be implemented in redefining the future. Their conversation took place during “Experimentation on the Edges,” a Spotlight Session included in the recent NACS Crack the Code Experience.

“We look long term in our strategic planning cycle in several areas of our business and plan on a three-year cycle, with a one-year brief refresh,” said Gheysens. “That gives us a lot of why and a lot of research data, and we share that in person and virtually with our teams. We do get feedback. Some of the best and most honest judges are the people in the stores—our associates. They’ll hold you accountable and tell you the truth immediately.”

EV Charging
With an eye toward future demand, Wawa has offered electric vehicle charging services since 2017. The company now has 40 charging stations—using both Tesla Superchargers and third-party EV chargers—at several sites and plans to add 30 more next year.

In October, the chain gave away a three-year lease on a Tesla Model 3 to celebrate the achievement of providing a half-million EV charge sessions. The ceremony took place at a new location in Vienna, Virginia, the first outlet in Wawa history to offer EV chargers but no fuel pumps.

“That store is more of a real-estate innovation and business model innovation than an electric charging innovation,” said Gheysens. “The Northern Virginia suburbs of the D.C. area are super dense, and we saw an opportunity. Data tells us that electric cars are prevalent in that market, and Teslas in particular. But when you look at the frothiness of that real-estate market, we simply can’t build our old model that requires a few years to go through development.”

Instead of a ground-up c-store, Wawa retrofitted a former real-estate office as close as possible to the Wawa design. “That allowed us to get from signing a lease to ringing registers much more quickly than we could versus the many-year process of going through development of our traditional model,” said Gheysens, adding that the location has been a big success and an example of Wawa’s test-and-learn mentality.

“What is consumer behavior like when someone is charging?” Armour asked. “Do they hang out in their cars? Come in the store?”

“It takes 30 minutes-plus [to charge a car], so why would they stop at a convenience store instead of going to a mall or restaurant and sitting down to eat and using their time more wisely?” Gheysens said. “Tesla came to us and said, ‘Our owners sit in their cars. They want a place where they can go inside quickly, get something to eat or drink and use the restroom. Then, they go back to their cars and do email.’ That was a learning for us. Some of the numbers we’d originally projected on a per-site basis are multiples ahead of where we thought they’d be, and that’s because Tesla understood their customer better than we did.”

Sustainability
Another innovation-in-progress is the installation of solar panels on the canopies of 90 New Jersey locations to power 100% of each store’s electricity needs.

“We’re on a journey to lessen our carbon footprint and improve our environmental impact on the communities we serve,” said Gheysens. “It’s not easy. Our stores are energy demanding, but solar technology has rapidly progressed. Just five to eight years ago, what we’re doing might have given us about 5% of the [electricity] demand that it will now, and it really wasn’t worth it.”

For years, Wawa has asked customers if sustainability—such as using solar power—matters to them. “And we’re seeing more and more—especially among younger customers, not teenagers—saying that it does,” he said. “We want to make sure Wawa is a good partner not just in the communities but also in the environment. And when it comes to the rates and the cost, solar is good for our shareholders, too.”

“How do you tell that story to the public?” Armour asked.

“It’s challenging,” Gheysens said. “But most of the solar panels are on top of the canopies and angled [as opposed to flat]. When customers pull into our lots, they’ll recognize the panels, and we’ll bring it to light on the digital screens we have inside our stores.”

Drive-Thrus
Gheysens is equally excited about two new drive-thru locations that the company will open this month. One features a drive-thru window on the side of a traditional fuel store, and the other is a smaller, drive-thru-only outlet with no gas.

“The stand-alone model is less than half the size of our fuel store,” Gheysens explained. “It will be traditional looking with our brand elements. Our challenge is to take a very large, customized, usually touch-screen order for our built-to-order sandwiches and drinks and deliver that in four minutes or less. So, we’ve had to streamline our offer. If we fail, that’s good. We’ll learn and revise.”

Recently, Wawa launched a dinner initiative with a hamburger and cheeseburger offering. “We don’t have grills, so how is that possible? Well, cooking methods have changed,” he explained. “But [store associates] came back said, ‘This sort of stinks.’ And they were right. We reformulated the burger, and now it’s a No. 1 seller among our dinner offers.”

Giving Back
Even though COVID-19 wasn’t part of Wawa’s plan for 2020, some inspirational stories have come out of the crisis. Early in the pandemic, “we partnered with Sheetz, who some would say is our archrival in Pennsylvania, to make food and together deliver it to local food banks,” Gheysens said. “That doesn’t happen by accident. It happens because we share a lot of the same values.”

But one of Gheysens’ favorite tales is about the letter he received from a customer praising a sales associate who had posted a sign on the checkout’s Plexiglass shield. It said, “Don’t worry. I have a smile under my mask.”

“We loved that so much that we made up signs with that slogan and sent them out to all our stores,” he said.

The NACS Crack the Code Experience is available on demand for attendees through Dec. 31, 2020.

Pat Pape worked in the convenience store industry for more than 20 years before a full-time writer. See more of her articles at patpape.wordpress.com.

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