RetailWire Discussion: CSD: Avoiding 'The Checkerboard Effect'

By Howard Riell

Through a special arrangement, presented here for discussion is an excerpt of a current article from Convenience Store Decisions magazine.

With disposable income shrinking, c-store operators are urged to have a clear, concise product offering. Unlike grocery store shoppers, c-store consumers view the entire store as "one large department with a bunch of pockets of stuff," said John Clutts, retail practice leader for The Partnering Group in Columbia, Md.

This may be something operators focusing on specific sections may not get. The mistake he finds when he walks into c-stores across the country is something he labels a "checkerboard effect," with its totally disconnected offering. "You would think convenience store operators have a better chance of giving one homogeneous solution or offering to shoppers."

Among the operators he says do a "really good" job in this regard are Kwik Stop and 7-Eleven. Wawa has also done a good job in terms of day-parting. "These guys have given thought to how their stores look and the solutions they provide, and they have certain key centers--like the beverage center or a meal center--that become anchors within their stores," Mr. Clutts said. "I don't see that in a lot of convenience stores. I don't see that in a lot of those smaller operators who tend to have a disconnected and disjointed view; who say to themselves, 'I think a roller program would look good, and it fits here, so let me plop it here.'"

Preventing that kind of decision-making requires operators to constantly ask themselves a couple of key questions: "Who is the consumer I am serving, and what is he looking for? And how do I best need to meet those needs and the mission they are trying to achieve?"

The tenets of category management are the same for large and small operators, Mr. Clutts said, although the way you attack it will be different depending on your resources. "First and foremost, is to make sure you understand what the category is that you are talking about," he said. "It could be cigarettes and tobacco; it could be linked to a broader category that may encompass alcohol or whatever you think is the right combined set of products to deliver against."

Whatever the approach, retailers must be clear, concise and deploy a few simple tactics, Mr. Clutts said, adding that they must also ensure it is within the realm of achievability.

Ultimately, they must be able to measure their progress.

"Most companies I come in contact with do an okay to a pretty good job of defining what they want to do," Mr. Clutts said, "and a horrible job of actually measuring the result."

Discussion Questions: How do decisions around store layout and category management differ for c-stores compared to grocers, pharmacies and other broader retail concepts? What general advice would you give to c-stores looking to avoid the "Checkerboard Effect"?

Avoiding ‘The Checkerboard Effect' - Convenience Store Decisions

Discussion Questions

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Comments:

The C-store industry needs to focus in at any given time, and regardless of the economy, on "convenience," the right assortment, respectable quality, cleanliness, and consistency.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates

The biggest challenge for C-stores is the amount of time they have with the customer. While an average grocery shop may last 30 to 60 minutes, customers may only spend minutes or even seconds in a C-store. How do we sell more stuff to customers in a shorter period of time? The merchant must know what his or her top 20 items are. That is the basis for traffic flow. Placing high margin displays within or near these high traffic areas will increase the basket.

Cashiers need their titles changed to customer service associates and need to be trained on art of upselling. When customers are in a rush, it's easy to sell them lottery tickets or a doughnut. C-stores are merchants too, and associates need to be aware of the selling opportunities that exist.

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Doron Levy, President, TheMortgageMachine.ca

C-stores play different roles for two relatively distinct groups of consumers. For the typical customer, this is a destination stop for tobacco, coffee in the morning and beer at night--and maybe gas.

But there is also a local shopper for whom the c-store is their primary retail outlet. It may be an urban senior or a rural teenager/preteen--but the c-store is often simply the easiest outlet for them to get to. For this consumer, the "treasure hunt" aspect of the store can be important, not unlike the Club store experience. Sometimes the "jumble" can make sense.

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Ben Ball, Senior Vice President, Dechert-Hampe

I think that C-Stores bear a little resemblance to QSRs, such as Starbucks and Subway. These retailers have distinct selling zones and traffic patterns worked out on the floor. Many C-Stores are a bit of a jumble. Sure, there are stations for burritos or coffee. But distinct selling zones by occasion or category could help. I'm not convinced that the grocery-style aisles of say, personal care products and cat food, are working well for them. Testing traffic flow against selling zones could yield actionable learning for them.

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Liz Crawford, President, Crawford Consulting

Knowing that consumers want "convenience" is not helpful. Convenience related to what or in what sense or at what time of day? When do your consumers come? Why? Do they find what is uppermost in their mind quickly? Managers of C-stores need to answer these questions.

Once you know what you are a destination for at what time of day, managers can manage the categories and assortment to ensure that what consumers want is available easily and quickly for them.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

I agree with this article with respect to smaller c-store operators. But I think the big boys--especially the oil companies and some of their larger jobbers--tend to overthink this, trying to generate "new concepts" focused on complex consumer "missions." Really, it's a simple business conceptually. People have had c-store-like retail store fronts since the days of Babylon. While there are details to be worked out, it's generally obvious what you should be selling, that your store should be clean, associates should be nice, etc. It's not a complex strategic category management problem! The trick to the c-store business is operating consistently--getting all that obvious stuff done effectively using a bunch of low-wage employees. Now that's hard!

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Jonathan Marek, Senior Vice President, Applied Predictive Technologies

Measuring the results = everything. No convenience store owner or executive cares about theory. They just want their profits to rise. Measuring the productivity of every square foot, every shelf, every service, every product, every hour, every location: that's where the money is. C-store customers don't drive out of their way to find the best place. So you need to make the max from the traffic you've got.

Mark Lilien, Consultant, Retail Technology Group

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