By Diane Rusignola
CHICAGO – At the NACS State of the Industry Summit earlier this month, Jeff Lenard spoke about the importance of the industry’s perception, and how a better image can lead to increased sales. Lenard, who is the NACS vice president of industry initiatives, referenced survey results NACS has collected over the years to drive home that the industry is changing for the better, but it still has work to do.
“This is a numbers conference, and the numbers I’m going to talk about now relate to what’s in the [April 2017 NACS Magazine],” Lenard said, pointing attention to the issue’s cover story, “How Gas Prices Affect Consumer Behavior.”
“At NACS, we look at three levels of metrics. We talk a lot about store metrics and the numbers, the physical sales—that is the actual sale itself. We also talk about what the customer does at the moment of purchase, the moment of truth. And NACS has a CTP program that does that. If you’re not familiar with it, it a great tool to talk about what the customer says is going on at the store. But what I’d like to talk about it what the customer thinks about, what the customers say,” Lenard said.
“I want to talk about different ways we can own convenience—whether it’s about the customer, whether it’s about the community, whether it’s about choice, whether it’s about cleanliness…what are the customers saying?” he asked.
Referencing the NACS reFresh initiative, Lenard stressed that it’s about more than fresh, nutritious and healthy food. “It’s also about community. It’s about jobs. It’s about, ‘What are they saying about us? How do we get stores built?’”
Lenard said NACS did a benchmarking survey four years ago and asked consumers a host of questions about the industry and their take on it—what can the industry do better; what is it doing well and can do more of.
“It basically came down to three things. They like the basic value proposition—they like convenience,” he said. “On healthy foods, there are some issues related to that. They didn’t necessarily think that we sold very healthy foods. What can we do about that, both in changing the perception, and possibly what we sell in stores? And number three, NIMBY (Not in My Backyard).”
Lenard said another work for NIMBY could be the acronym BANANA: Build Absolutely Nothing Anywhere Near Anyone.
“Basically we were perceived as being disconnected with the community and we really didn’t have an opportunity for advancement. So let’s compare what we had in 2013 to what we had recently. We asked consumers in our recent [January 2017] survey one simple question: ‘If you could ask a retailer to do one thing, what would it be?’”
Lenard admitted it was no surprise that the No. 1 answer was about lowering prices, particularly at the gas pump. But the No. 2 answer was to keep stores cleaner. “That relates to everything else that relates to our image—whether it’s food, whether it’s community—this will drive our sales. [Cleanliness] is what they say they want.”
Own the Restroom
Lenard walked the audience through some specific ways consumers said they want to see cleaner stores, beginning with the bathrooms. He said NACS asked consumers in May 2016 about their upcoming summer road trips, and how and when they might stop along their drives. “The No. 1 thing they said was use the bathroom,” Lenard said. “70% of consumers say on their Memorial Day drive, they will be using the restroom. So when we talk about owning convenience—owning the ‘C’ in convenience, owning the ‘C’ in customer, owning the ‘C’ in all these other elements—I want to introduce a new one. It’s not brand-tested yet, but we want to own the ‘C’ in commode.”
“The first purpose-built gas station in the United States was built in 1913. The first gas station program to talk about restrooms was 1933. So for the first 20 years, people were using gas stations and really holding it in.”
In 1933 though, oil companies started to focus on bathrooms as a central part of their operations. Lenard said gas stations at the time were characterized by the acronym TBA—tires, batteries, accessories, and all of the affiliated services—but bathrooms were also a big part of their original image. After the Great Depression and World War II though, the industry lost focus on the importance of bathrooms and it eventually led to the poor image of gas station restrooms in more recent years.
“When 70% of people use our restrooms, and that’s the first thing they do, are they going to buy your food? That’s the central question you have to ask if you’re going to grow your food sales, if you’re going to sell something else.”
Lenard talked about a company that, as part of a venture capital bid, built a bathroom to get people to come into their store.
Lenard shared a video of an average customer who shot a one-minute about a Shell bathroom in the Philippines simply because it was so nice and clean. At a c-store in the U.S. that Lenard once visited, the bathroom included a one-way mirror so people inside the restroom could see out, but people in the store could not see in. The owner said he stole the idea from a New York City club.
Lenard said both Kwik Trip and Sheetz have signs in their bathrooms that direct customers to call their leadership team if they have any concerns about the bathroom. The stores told Lenard that just showing they care about a customer’s restroom experience is the real win there, and they hardly receive calls as a result.
Lenard also referenced the “amazing bathroom” at Slovacek’s in West, Texas, and how RaceTrac uses humor throughout their store, including in the restroom, where there men’s room sign says in small print: “Leaving the seat up is allowed.” Lenard said it can be simple things like this that help emphasize your bathroom and its cleanliness.
Lenard challenged the audience to think about a customer’s visit as beginning not when they walk into your store, but instead when they walk out of your bathroom. And once they walk out of your bathroom into your store, Lenard said to keep in mind that half of all consumers say they go into c-stores to buy a beverage.
“QSRs are food first; I might get a drink. Our stores are drink first, might get some food. How do you build off of that?” he asked. He said the numbers show women are coming in for beverages but they’re not necessarily getting food, and to consider that when you position your offers.
The Shift Toward Healthy
Regarding the perception of whether stores offer healthy food, the numbers have improved. In 2013, one in five customers said c-stores sell healthy foods, but in 2017, one in three said that. “The customers we want—the 18- to 34-year-olds—40% say they have noticed ‘fresh’ inside of stores. So we have a great opportunity to sell to those customers.”
Lenard mentioned salads, fruit and nuts as healthy options that NACS surveyed customers about, and he said it was important to mention all three because even though nuts are packaged, they are still considered to be healthy by the consumer.
But don’t forget that newspapers and mainstream media can play a big role in the industry’s perception too. Lenard referenced a March 2017 New York Times article titled, “Honey, Please Pick Up Some Grilled Tilapia at the Gas Station.” The reporter was the NYT lead food critic for 12 years, has eaten at 5,000 restaurants including all of the best restaurants in New York, and he picked up on this important trend of great gas station food, so that’s saying something, Lenard said. USA Today also has run stories on the best gas station food, and even celebrities like Neil Patrick Harris will occasionally post on social media about their great gas station food experiences.
Perhaps most importantly, figures at the highest points in government are noticing the industry’s improving image and increasing healthy offerings, namely Michelle Obama. While just a few years ago she was a critic, she wrote a letter to NACS last year that was read at the 2016 NACS Show, noting how enthusiastic she is about the change in the industry and what stores have done to offer healthier foods. Lenard said c-stores are even beginning to get involved with Partnership for a Healthier America, and their annual summit that will take place in May 2017 is a great event for c-stores that have nutritionists on staff or any kind of focus on nutrition.
“So much has changed. The perceptions about nutrition—what is appropriate and what is not appropriate…and where we [have] evolved as an industry,” Lenard said.
The Breakfast Opportunity
With this evolution, comes a new opportunity, Lenard said. McDonalds and Denny’s have been focusing on breakfast, and convenience stores can do it better than anyone else, Lenard said. People wake up aspirational toward the idea of healthy, so when customers come into c-stores in the morning, they’re ready to buy something nutritious. “They start the day thinking healthy, and we have the opportunity—whether they’re coming there for a fill-up, whether they’re coming there for something else—to move that,” he said.
And while 50% of Americans eat breakfast every day, they aren’t necessarily eating that breakfast at home. Millennials in particular don’t want to eat at home, Lenard said, because they’d rather spend their time doing something else. Again, this creates an opportunity for convenience stores. Stores capitalizing on this idea include Wawa, which offered free coffee on Fridays in March to customers who downloaded their app, and Flory’s, which offered the same to drive-thru customers, Lenard said.
NACS asked consumers what they eat for breakfast, and Lenard noted that convenience stores essentially sell all of the items on the list, including cereal, oatmeal, fruit, yogurt and bagels. Doing something as simple as calling out “protein bars” on a sign can alert customers to a store’s healthy breakfast offerings.
Another question customers would ask retailers is, “How fresh is your food?” With that top of consumers’ minds, “how do you tell a story about how fresh your food is? [Don’t] just merchandize it, but show it,” he said.
‘C’ Is for Community
Harkening back to the idea of NIMBY, Lenard said NACS asked consumers who oppose c-stores what the industry could do to improve its image, and one of the top answers was to offer healthy foods. He said based on survey results, the industry is moving the needle on the perception of stores as positive for the community, but we still have work to do.
Even if it’s just a simple sign, “tell your story about locally-owned stores,” Lenard said. “People like local, however you’re going to define local. Get credit for it.”
Lenard said 17% of adult Americans say they have worked at a convenience store, gas station or corner store, and stores can use that demographic to help with their image. “86% of people who worked at convenience stores said the experience was valuable,” he said, adding that the positive feedback is an opportunity to address community members who are concerned about labor issues, like where the minimum wages sits. “Most of them agreed that the salary they were paid was commensurate with their experience,” Lenard said.
He closed his presentation stressing the importance of taking everything you do to the next level—whether it’s community, care, clean or commode. “Consumers expect more—don’t just do what you have to do,” Lenard said.
Diane Rusignola is the deputy editor at NACS. She can be reached at firstname.lastname@example.org.