ROSEMONT, Ill. -- A typical convenience store’s sales have a way of plateauing over the years. Once best practices are put in place and promotions used again and again, it gets more and more difficult to move the needle.
“On any efficiency curve,” said consultant Ian Thompson during a NACS State of the Industry (SOI) education session, “initially there’s a lot of improvement, and then it slows down, improving only step by step.”
Fuel retailing in the United States, the senior vice president of global solutions consultancy at Kalibrate said, “is in the flat part of the curve, realizing only small, incremental changes.”
In the session titled “How the Best Retailers Constantly Improve,” Thompson aimed to help retailers get growth moving again. It starts with an objective review of your business, he said.
“It’s hard to call somebody’s baby ugly. It’s even harder to call your own baby ugly,” Thompson said. “If you can objectively look at your brand, locations and pricing and say, ‘I’m not a first-quartile retailer,’ you have some work to do.”
In Thompson’s model, that work comes down to seven elements (7E) of retail fuel success that can stimulate growth:
- Location: Have I picked the right dirt?
- Brand: This is not just a logo. It’s communicating what a customer is going to get, a constant deliverable.
- Pricing: A great brand and great location give you permission to price a little bit higher.
- Marketing: Am I using digital and in-store marketing to drive sales?
- Merchandising: This is about having the right merchandising in the right locations. When you do it right, each site is treated individually.
- Facilities: It’s about the appropriate facilities—whether fuel, car wash, lottery, etc.—for each particular location.
- Operations: This is basically, “Am I operating the store well?”
In analyzing each of these variables, a retailer should go through the following process, according to Thompson:
- Benchmarking: How am I performing vs. the competition and the best in the industry?
- Explanation of performance: What are the best retailers doing that I can learn from?
- Starting point for improvement: Are the changes I am executing making me a better retailer?
- Create a customized plan: This should target improvement based on the data and your ability to change and improve.
- Focus of attention: Am I addressing the key issues that will improve my performance?
- Quantification of value: How much will my business benefit by improving? Is this a goof return on investment?
- And finally, an embedded process to continuously improve: “If you’re great at all seven elements, you will be a first-quartile retailer,” Thompson said.
Click here for a more in-depth review of the 7Es.
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