Fiona MacLeod, president of convenience retail for the United States and Latin America, joined BP in 1988 and has held positions within the company that have taken her to Belgium, New Zealand, the United Kingdom, Mexico, Japan and the United States. Her leadership and expertise helped restructure BP’s European marketing businesses in 27 countries, which made her the right candidate for BP’s latest move: to sell all of its company-owned and company-operated convenience stores in the United States to franchisees — a process that began in late 2007 and will take about two years to complete. In her
Scottish accent, here is what MacLeod shared with NACS Magazine about BP’s brand strategies, goals and opportunities.
To me that change is about simplification and focus. We’re going from today having multiple channels with multiple brands and offers to a single national ampm franchise brand. This allows us to simplify our business model and focus more attention on our core target customers and franchisees. We already have 900 stores operating under the ampm franchise. I see the value of putting ownership with franchisees, who are closer to the community and customers, and who bring that kind of entrepreneurial spirit to the business. Franchising is not a new business model for us. The ampm brand, which is the brand we’ve chosen to go with nationally, has been out there in franchise for 30 years. But it’s also a brand that’s very relevant in terms of its offer, and resonates with our own consumers as well as our franchisees. It was an extremely tough decision from a people perspective. But it was actually a clear, compelling decision from a business perspective that has allowed that simplification. It’s been our experience that the majority of our great site-based employees transfer to the new owners.
It was a bit of both, as it sometimes is in these situations. We want very much to simplify our business models, really understand where our competitive edge is and make sure that we focus our attention there. With all large corporations, there’s always a risk that you try to be all things to all people, and that’s something BP is very conscious of. We really are trying to focus our business models and be clear of what it takes to win in each particular marketplace. That is the kind of corporate lens that was in the background for me. The foreground was around the consumer shift, and we need to listen to our customers and understand what it is that the consumer wants — and bring great offers that are relevant to them. One of the key trends is that consumers want ultimate choice, but they also want their life simplified; and in a sense this move allows us to give that to the customer through a single brand and offer that they can relate to.
What I want to achieve with ampm, and what the company wants to achieve with ampm, is for the convenience stores to stand apart from the gas. We have very high loyalty to both the BP and ARCO brands and we want to be clear what customers expect when they see that distinctive ampm brand. The way I describe it is that when it has ampm on the outside, it has too much good stuff, in terms of foodservice and snacks and beverages, on the inside. So to me, we’re not really de-coupling the convenience store; we’re standing it apart. The customer definitely wants both great gasoline and a great store. But having that separate branding, I believe makes their life simpler. I wouldn’t rule out the opportunity to develop and operate franchised stand-alone ampms in the future. That’s something we are always considering.
We see the West as pretty competitive — especially with fast food. What we’re doing now is capitalizing on the base that we’ve established in the East and adding to it the ampm brand with the simplicity we talked about, the unique customer attraction and with great foodservice. What will make it work in the East is the same thing that made it work everywhere else. That means having a passionate focus on what our customers want, and listening to the customer — from a corporate perspective and through the franchisee’s eyes and ears — and having franchisees who know how to deliver a great offer 365 days a year.
I see ampm as less like our competitors in the fuel and convenience store industry and more like other types of franchises. For example, we have a direct relationship with a franchisee, and in the convenience industry, many companies run franchises as tests. Whereas with ampm, franchising has been our way of life for the last 30 years. So my big thing, really, is that we must never forget that dealer and jobber franchisees have to choose where to invest their hard-earned money and put their hard work. Our track record is to listen and work with our franchisees to grow their investment.
I think that consumers see that we’re trying to be an innovative energy company, and looking to the future. That’s really what we have tried to get across with “beyond petroleum” and with some of our recent advertising where we’ve said, no, you can’t go from where you currently stand in the oil industry to a completely green, non-petroleum world overnight. Taking it one step at a time is the important approach, having a bit of humility around it rather than going out and changing everything overnight, or even pretending you can do that. I think it’s a challenge for our customers in the same way that it’s a challenge for our employees to say, “how do we actually move forward a green agenda in a measured way in a large company?”
That’s the only one we have. It’s about sustainability, but it’s also largely about education. There’s a lot of anxiety about climate change in our communities, and people don’t really have an easy way they can change that situation. In the Helios House, what we are attempting to do is give customers advice in improving their choices. It’s a unique proposition that BP has in place. It is the only one in the world, and I would say that it’s about education and interaction around the environment.
Like most business, it comes down to common sense, and there are a couple of steps I like to follow in looking at a business when I first move in. I look outside first at the competition and the customers and brands and offers, and really try to understand what it’s going to take to win, compete and grow in that marketplace. Then I tend to look to see what we need to do differently, to give clear direction and to get the right business model for our teams and business partners. And then it’s about making a decision. That’s where the common sense comes in. Hugely important — I think I’ve learned this from lots of roles I’ve had within and outside BP — it’s crucial to be supportive and open with your people. Especially in retailing, since that’s what it’s all about — your people. There’s an old saying: “People don’t care what you know until they know that you care.” That’s something I apply as a leader. Then it’s about getting out there and winning. We tend to talk about letting your operations breathe, which I really love as a phrase. It’s allowing your operations to get out there and compete because they have the support. That’s the approach I tend to take when I’m looking at a new business for the first time.
The U.S. biofuels market is absolutely going to continue to expand from its current level. I think that’s going to be predominantly through cellulosic feedstocks like agricultural waste, switch grass, maybe forestry waste. BP is investing in a variety of options around the globe, and we’re making significant investments in cellulosic biofuels. Last year we established the Energy Biosciences Institute in the United States, which is a partnership that includes the University of California-Berkeley, University of Illinois and the Lawrence Berkeley National Lab. And we’ve committed $500 million to the research institute. It’s a global commitment — we are committed in Asia and Europe in exploring and understanding how we can move things forward from a bio-fuels perspective.
It’s very much something that I am familiar with from my time in Europe, where biodiesel is on the rise. In Europe, for example, we have a JV with D1 Oils focused on producing biodiesel from [the plant] jatropha. I think that the U.S. industry is watching to see whether the attributes of a diesel vehicle will be sufficiently attractive to get a significant shift in consumers. I think it is going to be a matter of global supply and demand.
We continue to look at innovative payment options. We are aligned with NACS in advocating for lower credit card fees and the need for those to be realistic for our vendors, franchisees, dealers and jobbers to compete, and for our own consumers to have a competitive purchase price. So we’re absolutely aligned on the need for that to change. Our BP credit card program and fee structure in the East is seen as the most competitive offer for franchisees, dealers and jobbers, and also for our loyal customers. We want to have a very competitive offer so that credit cards are more accessible to everybody.
Absolutely there are customers who will drive for one or two cents a gallon to get that better deal and to pay in cash. We also have customers who love the convenience of using a debit or credit card. Within our customer segmentation, we have people who have strong preferences for different payment types, and our challenge is to be able to give them that option wherever possible, recognizing that, west of the Rockies in particular, the debit card and cash position we have is very beneficial for our franchisees.
This challenge is something that I have observed globally as well as in other markets I have worked — that the consumer can have one perception of a global multinational and a very different perception of their local gas station. What’s interesting to me is that it tells us that the consumer does want franchise local business owners who are part of their communities. So for a customer-focused business like ampm or BP or ARCO, having local franchisees represent an interface with our customers makes absolute sense, because they can relate to the customer and the offer that they’re providing to them — and at the same time be seen as separate from the global supply and demand, which ultimately that local operator doesn’t control.
The really simple advice is do a great job. In good companies people are promoted on merit. If you’ve got an ability to make decisions, run a business and lead people, then to me your gender is irrelevant. That’s certainly my attitude in life. I’ve never really thought of myself as a senior female manager; I just think of myself as a senior business manager. I work with and sponsor a women’s network. I work very much around creating a more diverse inclusion in the company. But as an individual, it’s about getting out there and delivering on your promises to your coworkers and to your shareholders. If you treat people with respect, then you will be successful in this business.