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Get to know your customers, said Fourie |
South African forecourt retailers need to become less dependent on fuel and focus on the opportunity in fresh foods.
That was the key message delivered by Adolf Fourie, national convenience manager at Sasol Delight, at the Insight/NACS RMF Convenience Africa Summit in South Africa last month (February).
Fourie, who previously worked for BP, compared and contrasted the South African and European forecourt markets.
Fourie told delegates European markets suffered from a shortage of skilled labour and an influx of East European workers which made language a barrier. He said safety on site is becoming more of a problem, shoplifting is an issue and stores have a high staff turnover.
On the plus side, European forecourts have high customer numbers, suppliers and retailers have spent money on customer insights and shopper behaviour in forecourts and they have close working relationships. Distribution and operational processes are strong.
Despite the contrasts, Fourie said: “The only difference between us and the rest of the world is that we are not telling them how great South Africa is. We are not inviting them to learn from us, but too often we sit tight-lipped and just want to learn from them.”
Fourie advised forecourts in South Africa become less dependent on fuel and pointed to a recent NACS report, which revealed a US service station operator achieved 71% of sales from gasoline last year, but only 34% of the profit.
“This shows that food and other items inside the store is the key to profitability,” he said.
Fourie said market deregulation and changing competition laws in South Africa would alter the structure of the sector and he questioned how long consumers will continue to visit filling stations that only offer them fuel.
Fourie urged forecourt operators to get to know their customers.
“The road to survival will be knowledge of your forecourt convenience consumer,” he said.
“We will need bigger joint efforts between retailers and suppliers to understand the forecourt consumers’ changing in needs, and his/her buying strength.”
Fresh foods, including fruit and vegetables, bread and meat, will lead future forecourt development, he said.
But Fourie warned consumers have high expectations and they would seek out substantiating information to back the claim of fresh – where product was prepared and when, for example.
Innovation in store formats will help deliver fresh cues to shoppers, Fourie added.
“Some new store format innovation is giving everyone in the forecourt convenience market the opportunity to freshen up our image to the consumer.”
As a result, Fourie said the market would have to be tougher on sub-standard operators and ensure it delivers clean and friendly environments.
“Our consumers’ expectations have changed, the innovation in our industry has set new benchmarks, we need to ensure we deliver the experience,” he concluded.