CSD: Retailing On Two Wheels
By Erin Rigik
Through
a special arrangement, presented here for discussion is a summary of
an article from Convenience
Store Decisions magazine.
With gas pumps
out front, automotive supplies inside and the occasional adjacent lube
shop, c-stores are geared toward the driving public. But as more commuters
take to bikes for exercise, to save on gas or to support a greener environment,
one c-store owner is making bicycles his business.
A bike commuter
and bike mechanic, Edwin Skaug noticed a theme at retail while riding.
"Since convenience
stores primarily carry automotive products and daily need items, I thought
if a c-store had more bike shop items designed to appeal to bike traffic,
it might bring in cyclists that wanted to shop while they waited for
a bike tune-up or to get a tire patched," he said.
What’s more,
his hometown of Portland, Ore. was named America’s top cycling city by Bicycling magazine
in 2001 and 2006. The last Census report in 2004 showed about four percent
of the Portland population used bicycles as their primary mode of transportation.
And, the city’s Office of Transportation’s Bicycle Master Plan calls
for increasing bicycle mode share in the inner city to 15 percent and
citywide to 10 percent by 2011.
In other words,
cycling is booming in Portland.
Using the trend
and his background to his advantage, Mr. Skaug opened a bike shop/c-store,
called A Convenient Cycle, in Portland in August, renting a location
near a major bike path and doing all the renovations on the 350-square-foot
store himself.
A Convenient
Cycle not only offers bike parking, but features bike accessories from
tires and lights to locks and helmets, as well as c-store items such
as toiletries, protein and energy bars, chips, an array of hot and cold
beverages and, of course, first aid items, such as painkillers and bandages.
The store also services bikes, repairing break pads, cables and other
bike-related issues.
So far, customer
response has been positive. "They like being able to come in, and if
they have time to hang around for a tune up, they can get an energy bar
or a soda or look around at accessories. I have a bunch of folks swinging
by to schedule tune-ups and grab snacks," Mr. Skaug said.
With his store
already open and attracting riders, Mr. Skaug has set his eye on expansion.
Already he has a front-loading Dutch cargo tricycle to bring his convenience
store business directly to those on the bike path. "I will be out on
the bike routes riding around. I am working with the city to set up a
permit spot for the morning to promote the shop location. I’ll carry
break pads, patch kits, batteries, cables, other bike accessories, painkillers,
bandages and power bars," Mr. Skaug said.
His next goal
is to acquire cargo bikes to rent to people who need to run errands or
rent a bike for the weekend.
Discussion Questions:
What do you think of a c-store targeting cyclists? Would it work in
other parts of the country? Does it give you ideas for c-stores geared to other
specialties?
Customers are always looking for greener ways to do things. Living close to Toronto, cyclists here abound even during the winter months, so catering to that segment is a smart idea. C-stores are all about convenience and I wouldn’t say that is limited to the driving public. Load up on Gatorade and Power Bars and make your customers happy.
The extent to which most c-stores have gone to attract cyclists amounts to a bike rack in front–and you seldom see even them any more. There are lots of reasons why. While Portland and other cities, including my home town of Chicago, are working to be more cyclist-friendly, the number of riders is still relatively small and to support a c-store you need traffic.
Today, c-stores are a multi-million dollar outlay and to support that investment you need income from both fuel and inside sales. This means building in locations with heavy automobile traffic and that is not generally an area conducive to cyclists. What the article reports on is a niche business. It may work in a limited number of locations but does not represent a major opportunity for the c-store industry.
Well, the bicycle is pretty urban. If it’s gas that’s the issue, how about renting Zipcars and providing more parking? Or–a monthly rate for commuters?
At the end of the day, America drives. Our infrastructure isn’t set up to walk or bike, unless it’s in a city or planned community. So, the real question is, what is the plan for C-Stores to keep their traffic? Fast Food? Do they simply become vending machines like Shop/24? Perhaps providing a kind of “way station” for people on the move is more viable. Meaning that C-Stores could morph into places that are Kinko’s meets Zipcar meets Dunkin’ Donuts. Something along those lines.
The concept is unique but the success will probably be limited. C-stores are convenience based–that is, people get what they want on impulse. When you look at the top-selling items at C-stores–drinks, batteries, cigarettes and gas–these do not appear to be a great mix for a cycle-oriented store. Also, the peripheral impulse items (magazines, milk, eggs, etc.) do not fit well in this model. Interesting concept, but not one filling a real need.
Where cyclists are on the rise
Appealing to their wants is wise.
As a bike commuter, I applaud his efforts but I am skeptical about the business model. Most bike shops also offer energy bars and repair service. The market is just too small for a bike-focused C-store. However, I often stop into traditional C-stores during long rides and can’t recall ever seeing a bike rack. I have always thought that if existing C-stores on popular biking roads made even a small effort to attract and serve people on bikes, they could then sell a good deal of high-margin product. They already have the product we are looking for–energy bars, coffee, sports drinks, and the one service we occasionally have to find (bathroom). It would not take much–a highly visible bike rack, a couple of posts on local biking message boards and if they really want to go all in, a bench or couple of plastic chairs.
What’s everyone [complaining] about? This is a perfect example of niche marketing. Granted, Portland is Portland and this concept isn’t going to work in a lot of places. But it’s a great example of an operator expanding services to an important part of his customer base. After all, is that not why we are not all here?
And in case you haven’t noticed, bicycle shops are disappearing, a function of the losses to mass market retailers. I’m an avid cyclist too–in New York where it takes guts to survive on the road :)–and I and many others would appreciate some bike-friendly alternatives.
Will the fact that Mr. Skaug is targeting cyclists prevent motorists from visiting his c-store? Not if it’s conveniently located.
This is a great example of having a differentiated marketing target but a broad sales target. It’s how businesses like Apple, Nike and Pepsi have built and maintained their success. And exactly the opposite of the ‘something for everyone’ approach that marketers like Sears, Kmart and Gateway have used and and then have seen their businesses shrink because they don’t stand for anything.
As an avid endurance cyclist, I think it’s a fabulous idea. As a consultant that’s worked with several brands of C-stores, I can tell you, it’s not going to happen. Perhaps a little in areas like Portland or Seattle that are very bicycle-friendly and by mom and pop owners but elsewhere in the U.S., I severely doubt it. For most of the larger C-store companies, the idea of “retail” is an afterthought–sell gas (number one), stock the shelves with Cokes & smokes, make the deposit, forget about it.
I really hope ‘bike-friendly’ becomes a pervasive idea here, but from my experience with unfriendly terrain and drivers, I would have to take a “bah-humbug!” stance on its actual execution.
I love cycling for exercise and fun, and will occasionally stop into a c-store that’s along my path. But I don’t think I represent much of a market. I applaud this guy for seeing and successfully filling a niche in Portland but I don’t see the likelihood of this growing into anything of any size.
That said, I second the comment above that it wouldn’t hurt some c-store operators to add a bike rack.
Small market, small store and a niche player. Not a big place to invest in unless you are next to a bike path. Don’t look for this to become a national chain.
“Since convenience stores primarily carry automotive products and daily need items…”
Yes, .1% of the former and 99.9% of the latter: maybe I’ve completely missed the boat on what is being talked about here, but how exactly is a store carrying newspapers, candy bars, coffee, Squishees, etc, catering to any specific transport demographic more than another? It sounds like someone is confusing 7-Eleven for Kragen.
It is always about the “Voice of the Customer.” If you have interest from a certain group, you need to make sure that you are offering relevant, timely, and engaging interactions. So therefore, the opportunity to market to a segment that has expressed a need is a very strategic opportunity.
Having just participated in this www.the508.com for the third time, you could say I’m somewhat of a cyclist. However, we are a very small market. On the other hand, that market varies significantly from city to city. Boston, Portland, etc, have large concentrations of cyclists. If this conversation is global, imagine the opportunity in Norway, Denmark, etc…HUGE!
Do I stop at C-stores on my rides…in both urban and rural areas? Absolutely. However, there are plenty of consumers who buy energy foods who do not necessarily exercise. I think it would be great to highlight energy foods, as many c-stores already do, and not focus on cyclists, unless it is a high-concentration area of those people.
This is not a case of convenience store trends emerging in the market. It is the case of a smart business owner adapting to and serving his local market in the best way possible.
Portland is a big biking community and it makes perfect sense to cater to the people.
The trend I would like to see emerge is that C-Stores raise the level of their quality and cleanliness of stores. That would help to justify their high prices!
Seems like someone in Portland is thinking. Find a niche and cater to it. While this isn’t rocket science, it does point out the opportunities that exist due to changing consumer habits.