Car sharing and convenience stores have potential for a profitable partnership.
The concept of convenience crosses multiple channels of trade, but it isn’t just relegated to retail — it’s also found behind the wheel of a car.
Zipcar, which merged with Flexcar in 2007, is a car sharing service that puts customers in the driver’s seat when they need to be there. And, like many convenience store operating hours, vehicles are available to customers 24 hours a day, seven days a week and 365 days a year and are parked in a convenient spot, such as near apartment and condo buildings, university campuses and in close proximity to public transportation.
Convenience and petroleum retailers located in urban areas with a high population and good access to mass transit may already be familiar with car-sharing services like Zipcar, which enables non-car owners to “borrow” a car to get around town. But what’s worth thinking about are the potential benefits of a convenience store/carsharing partnership — particularly as retailers focus on other profit centers that can help grow inside sales.
High gasoline prices are good for business — if you’re Zipcar. On July 9, the company announced that it was averaging 10,000 new members per month and attributed the growth to rising gas prices, as 40 percent of new members cited cost of fuel as their reason for joining.
Zipcar members are also likely to be your least fuel-cost-conscious consumers, which means extra cash for inside sales. These customers don’t own a vehicle to fill up, and the cost per gallon isn’t coming from their own wallet. The rule for Zipcar refueling: Members must leave the tank at least one-quarter full for the next user and refuel using a fleet card (Wright Express) that can be found in the car. Members also don’t have to fuss with service checks, oil changes, tire rotations or any other vehicle maintenance.
So what are the possible benefits for convenience store operators? For one, a partnership with Zipcar could provide a valuable opportunity for retailers to “carve your right of way,” a line taken from Edie Weiner, partner at Weiner, Edrich, Brown Inc., who spoke at this year’s NACS SOI Summit (see the June 2008 issue of NACS Magazine).
What this means is that services like Zipcar can help retailers leverage their own location by bringing other business opportunities into the parking lot, which can also help attract new customers and boost sales. But then again, a parking spot is a parking spot...for a paying customer. If a dedicated parking space is being allocated to a Zipcar all day and every day, how is that going to make you money? Well, think about a potential partnership.
“With the right conditions, partnerships between Zipcar and retailers are mutually beneficial. At Zipcar, we seek parking on a local level and look for easily accessible, safe parking locations that are nearby to where our members live or work.
“Retailers have to weigh the value of a parking spot with what they would get in return if they were to lease that space to Zipcar, such as increased store traffic and adding an environmental service for their local community,” says Jon Zeitler, vice president of corporate and strategic business development at Zipcar.
“We have seen success with joint programs with retailers such as Whole Foods and IKEA where we were able to work together on creative promotions to encourage use of both services.”
If a Zipcar customer is out running errands for the day, a convenience store has the coffee, bottled water, soft drinks, snacks and other merchandise to help get them on their way. And, if a car-sharing service is located at your store or in close proximity, that’s a one-stop shop for the driver — not to mention easy.
“At Zipcar, our goal is to make our service as simple and convenient as possible for our members,” said Zeitler. “Partnerships with a well-located convenience store or group of convenience stores, by definition, could be an interesting fit with our service.”
Zipcar has yet to tap into the convenience store channel. It has, however, found a great customer draw by being located near grocery stores and larger retailers. “Our regional partnerships with Whole Foods and IKEA made sense because our members frequently use the cars for trips to these retailers, taking the car just a few blocks to do a big grocery shopping trip or out of town to pick up large furniture items. The core concept remains the same; simple access to self-service vehicles, conveniently parked in our members’ neighborhoods,” he says.
Although he did not comment on specifics, Zeitler suggested that Zipcar is willing to work with convenience retailers to cross promote the two services, such as offering discounts for Zipcar members. “We are willing to be creative about how we work with partners,” he said, adding, “Both to provide value to our members as well as to have an effective partnership — cross promotions are a method where we have had success.”
Think about the different behaviours some consumers are already doing to combat high gasoline prices, such as carpooling, taking public transportation or riding a bike to work. If the next step means drivers ditching their vehicles for alternate modes of transportation, Zipcar or a similar car sharing service, where available, may be a viable solution for convenience retailers.
Also, think about what you are doing today to expand your convenience offer for the future. Is convenience relegated solely to the service you provide getting customers in and out of your store? Offering an additional timesaving solution for your customers, such as car sharing, can help attract new customers, increase loyalty and drive traffic inside your stores.
Zipcar has 225,000 members and 5,500 vehicles in urban areas and college campuses throughout 26 North American states and provinces as well as in London, in the UK. Zipcar offers more than 30 makes and models of self-service vehicles by the hour or day.
To become a Zipcar member, log on to www.zipcar.com and check to see if it’s available in your area. Then, complete the online application. Once complete, new members will receive their “zipcard” to unlock the vehicles and can make reservations online or by phone. Divers reserve Zipcars for roundtrips only, and rates include the cost of insurance, maintenance, parking and gas — with prices beginning as low as $6 per hour and $56 per day, depending on city and vehicle type. Each Zipcar must be returned to the same parking spot it was picked up from.
This article appeared in the December 2008 issue of NACS Magazine. For more information about subscribing, please visit www.nacsmagazine.com