Defining the Future of Convenience Retailing

At the NACS Leadership Forum, leaders from Hess and MAPCO challenge the industry to define its path forward through customer engagement, mobile payments and the changing motor fuels landscape.

February 12, 2013

MIAMI, Fla. - The NACS Leadership Forum kicked off yesterday with an overview of this year??s theme, "Visions of the Future," which, noted 2012-13 NACS Chairman Dave Carpenter, explores all aspects of leadership and how they relate to the convenience and fuel retailing industry??s future.

Carpenter teed up three key areas where the industry can - and should - define its future: engaging customers, shaping the payments landscape and addressing the future of fuels.

"You can??t really talk about the future ?" whether it??s fueling or payments or just retailing ?" without also talking about how we engage customers," he said. In the payments area, Carpenter stressed that the industry will continue to pursue legislative and legal options to address card fees ?" the industry??s second-largest expense ?" but will also look more at innovation "to find game changers that deliver better and cheaper ways to accept and process payments." And for fuels, new technologies and consumers demand will continue to shape our transportation energy market.

Beginning the discussion was Igal Zamir, president of MAPCO Express, who shared how the convenience retailing industry must change consumer perception if it wants to remain a strong retail presence ?" particularly as the lines among retail formats continue to blur.

Calling it "a reality check," Zamir showed video comments from consumers in response to the question, "When you think about convenience stores, what do you think?" With more attention to foodservice, attracting female shoppers and offering fresh foods, the consumer reactions showed that the industry still has its work cut out for it: ""I??m not eating at a gas station," said one consumer.

To explore the concept of redefining the c-store offer, Zamir said MAPCO used Duane Reade as its case study, the once dilapidated drug store chain in New York City that completely changed its offer. Duane Reade has transformed its stores to offer a new level of convenience for everyday items and traditional drug store items, making it the New Yorkers?? convenience stores. (See more on Duane Reade??s flagship Wall Street store in the 2012 NACS "Ideas 2 Go" DVD.)

Moving forward, MAPCO is focusing on strategies that will evolve its c-stores into consumer destinations, giving them what they want and when they need it. And the one thing that customers want most, said Zamir, is time. Also, if MAPCO wants to attract more female and younger shoppers, its offer must be relevant and it must change the perception from a traditional c-store to a market "plus."

Zamir stressed that change must come from everyone in the industry, not just a handful of smart, successful retailers. "What are you doing to change customer perception?" he asked, adding, "All of us need to hold ourselves accountable."

The second panelist, Chris Baldwin, senior vice president of Hess Corporation, shared the great American story behind Hess. "You can tell a company culture by the stories it tells and the artifacts it holds," he said to the audience. Founder Leon Hess?? first delivery truck (in the corporate headquarters lobby) reminds Hess employees every day of their humble beginnings and how far they??ve come to reach today??s Hess: a global energy company with 14,000 employees worldwide and operations in 23 countries.

Baldwin focused on three macro-trends in society ?" not necessarily exciting when taken individually ?" but when put together offer tremendous opportunity to c-store retailers: how we eat, how we get info and how we move.

Three square meals is a thing of the past. Snacks have become our "fourth meal" and more of our meal spend is outside the home. And while consumers are eating more, it??s not necessarily better food. Obesity rates have skyrocketed over the last decade to embarrassing numbers. "We need to be part of the solution," Baldwin asserted. "If we don??t take a stand, others will do it for us." Standout performers McDonald??s (specifically its coffee program) and Duane Reade (with its focus on health & beauty care and food) are the competition for c-store retailers.

Remember when newspapers were delivered, the telephone was only found in the kitchen and watching TV was a family event? Today, network television has faded as a primary communication platform and social media has transformed how we consume information. How you wield social media to attract new consumers and instill loyalty can be a key differentiator, Baldwin told the crowd.

Finally, how we move has experienced a sea change over recent years, Baldwin noted, as gasoline consumption has peaked and is on a decline, the world??s car fleet is evolving to accommodate more fuel-efficient vehicles and car ownership and usage is declining among the younger generation. Sixty-eight percent of 18 to 34-year-olds would rather text or use other social media than drive to see someone, Baldwin said.

How can we, as leaders, help our industry stay relevant in the face of this enormous change? Baldwin left that question with the audience; the Leadership Forum hopes to provide an answer.

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