Home' Convenience and Impulse Retailing : November December 2009 Contents www.c-store.com.au | C&I | December 2009
Participants at the recent NACS
convenience store world show (or 'expo')
in Las Vegas were told the six key themes
that dominate retail strategy around the
• Price: value continuesto be uppermost
in retailers' minds, with retailers being
encouraged to be more thoughtful in
their approaches to pricing
• Private label: Tesco sets a high
standard here, but private labels
continue to gain share in the US,
though it 'isn't for everyone'
• Positioning: getting the brand aligned
with customers' expectations, needs
and wants (though it was stated that
needs will always trump wants)
• Simplicity of execution: including
standardisation of stores and the
savings generated through this
• Complexity of business model: how
operations are streamlined
• Shelf optimisation: space is at a
Additionally, areas that convenience
store retailers are beginning to
increasingly leverage include:
• Fresh products and ‘real’ coffee
• Environmental sustainability
• Attracting a higher number of females
into the stores, exemplified by the
production and marketing of health
and beauty products
from NACS Show
A report from the Australasian Association of Convenience Stores
As some stores are doing in Australia,
fresh sandwiches are appearing in many
stores, whilst coffee made with espresso
machines (as at cafes) by baristas
(trained coffee-making professionals) is
also making an impact.
"This is an approach that McDonald's
have now been applying for years in
Australia," says Sheryle Moon, Australian
Association of Convenience Stores
Executive Director, who attended NACS.
"It's a trend that we should explore
locally as the demand for quality coffee
is accelerating. It doesn't just provide an
opportunity to increase profit in itself,
it's another reason to visit a C-store.
"The trend of sustainability is
also one that is past the 'watching-
and-waiting' stage," says Ms Moon.
"Globally, increasing amounts of
sustainable produce and sustainably-
sourced products are being marketed.
Additionally, the stores themselves
-- with smart lighting, energy-efficient
refrigeration and recycling programs --
are moving towards the cutting edge.
It's an approach I know many stores in
Australia are applying and it is certainly
an approach that AACS advocates."
For those stores that get in early
and create a strong point of difference
for 'real' coffee and sustainability, the
marketing value and ROI could be
significant. "Sooner, rather than later,
the coffee service and sustainability
approach will become standard", says
Ms Moon. "Those that get in early will
benefit the greatest."
Fresh food was described as being "the
game changer" at NACS. Meat, produce,
convenience foods (e.g. sandwiches)
were all used as examples.
Flexibility was a mantra at NACS and was
emphasised as being applicable to the
diversity of retailer business models that
exist. It was proposed that this was the
ONLY rational reaction to a fragmented
marketplace, particularly for companies
that are not niche players. One presenter
said that, "a share domination strategy
will be impossible to maintain while we
are intensely simplifying and decreasing
Another reason for the necessity
of flexibility was that risks to supply
chain reliability have intensified.
Complementary to this, the supply chain
complexity, shocks to the system and
speed of delivery are all becoming more
significant relative to short-term item
Convenience and customer
There were no easy answers to the
struggle to generate efficiency gains whilst
enhancing customer relationships. "Face-
to-face interaction will always be critical
for C-stores," says Sheryle Moon. "It is the
most effective form of marketing a store
"It is hard enough to attract customers
to visit a store, but it is bad business
not to do enough to get them to come
back. The way employees interact with
customers is a critical factor in this. This
is especially the case for stores that may
have a limited stock range and array of
reasons for repeat visits. As one presenter
said, 'The ability to repeat quality service
is a lasting competitive advantage.'
"Convenience for our industry is
obviously king, however," continues Ms
Moon. "Self-checkouts and pre-packaged
foods, such as meats, were just two of the
areas flagged at NACS to facilitate this
occurring. As one presenter put it: 'fast,
clean and friendly -- they are all critical'.
"As another speaker said, however,
convenience is not just about quickness.
The biggest opportunity for C-stores is in
providing customers an experience that
connects with their needs and enriches
their lifestyle. This means having a deep
understanding of store customers that
can only come about through excellent
market research, delivering business-
relevant insights and experienced
retailing. The need for this was
emphasised based on observations that
customer behaviour was 'varying wildly'
Retailers were encouraged to look
harder at the opportunities social
media (Facebook, Twitter etc) presents
to engage with customers and drive up
visitation and profit. There were also
a number of, as always, fresh ways to
merchandise product in stores made
available and discussed.
Interestingly, the NACS Retailing
Research Council flagged a
merchandising-focused study -- called
Embracing New Ideas in Convenience
Retail -- it is undertaking to help C-store
retailers become better at what they do,
increasing profits in the process.
Key elements/assumptions of merchandising
that are being tested include:
• Enhanced LED lighting to aid in product and store visibility
• Reduced exterior window signage to improve sight lines into
• Cleaned up and reduced outside merchandising
• Adding music to stores
• Clearer sight lines from checkout
• Elimination of all safety mirrors
• Putting safety messages on all entrance carpets.
Results of the study are likely to become available early next year.
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