By Jackson Lewis, CSP Magazine
CHICAGO – Retailers, suppliers and industry experts converged in Chicago for the 2018 NACS State of the Industry Summit from Tues., April 10, through Thurs., April 12.
The U.S. economy is doing reasonably well and the convenience petroleum industry continues to see record sales, but that’s no reason to get complacent, according to Bill Conerly, economist and consultant of Conerly Consulting. Conerly cautioned that retailers should be prepared for any economic eventuality, but also said it is generally a bad idea to bet against the U.S. economy.
With that economic outlook in mind, here are five great ideas shared during NACS SOI:
1. Create a Trough Plan
Back before the Great Recession, construction equipment company Caterpillar developed a Trough Plan, otherwise known as a “Recession Contingency Plan,” Bill Conerly.
Conerly said that Caterpillar had a plan prepared on what to do to continue to be profitable if revenue was cut by 80%. Conerly suggests c-stores should have a similar Trough Plan for the lean times. But he also suggested c-stores consider how their business would change during periods of strong growth.
2. Consider Outside-the-Box Acquisitons
“Maybe you need to think about acquiring businesses that have nothing to do with c-stores,” said Todd Hale, senior vice president, consumer and shopping insights, Nielsen.
Hale used Target’s Dec. 2017 purchase of delivery startup Shipt as an example. The retailer made the acquisition in order to compete with same-day delivery. It may behoove c-store retailers to apply a similar strategy and look to businesses that can help them compete in this changing era of retail.
3. Appeal to High-Income Consumers
Low-income consumers have very little discretionary spending available and are also being targeted by dollar stores and drug stores, according to Alan Beach, senior vice president of merchandising with 7-Eleven.
“We need to become a better destination for more consumers and in more income levels,” said Beach. He suggested adding salads as more restaurant concepts focus their offerings around salads, and wine, which saw about 5% sales growth last year.
4. Give the People What They Want
Beach also suggested that there are types of flavored water and other beverages out there that consumers want but are not widely available. “There’s huge opportunity here for beverages and private brands,” he said.
He cautioned against duplicating a flavor or type of beverage that another store offers, and instead said that c-stores should try to find unmet consumer needs and fill them. He also pointed to Amazon.com’s snack business, which was up 42% last year because of new snacks introduced by the e-retailer. “We need to get our piece of this 42%,” he said.
5. Empower Employees
Keynote speaker Scott Stratten of Unmarketing started his presentation with a story of a few Ritz-Carlton employees who went above and beyond. He talked about a family whose child accidently left a stuffed giraffe at a Ritz-Carlton hotel.
The child was upset when he arrived at home and realized he had left his giraffe, so his dad bought some time with a parenting white lie, and said the giraffe was taking an extended vacation. Dad called the Ritz Carlton hoping to find the giraffe, and not only did the hotel send them the giraffe via overnight delivery at no extra charge—employees also included pictures of the giraffe during its extended vacation at the hotel. The photos showed the giraffe lounging by the pool, getting a massage and working loss prevention at the hotel.
Stratten said this inspired decision-makers at the Ritz-Carlton to empower every employee by allowing each of them access to $2,000 to use to make any customer’s experience great. They called it Delight or Make Right. Stratten urged c-stores to learn from the Ritz-Carlton’s example and give employees the trust to make customers’ experiences word-of-mouth worthy.
Jackson Lewis is the Tech and Services Editor at CSP Magazine.