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10/28/2022

Back to the Future

The retailers who meet the needs of their local market and customers will survive.
Roy Strasburger
CEO of StrasGlobal
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Can't decide if it is the straw boater hats on the wall or the scrumptious cakes on the sales counter that are most compelling...

I was recently asked to nominate my favorite store for a research paper being done by Scott Annan. My choice is Kingsgate Wine and Provisions in Winchester, England. If you are ever there, pay them a visit.

Located across the street from one of my top pubs, the Kingsgate is a local shop that has the feeling of late-1800s retailing. In my head, whenever I enter the store, I am transported back to the turn of the last century where the local grocer knew everyone's name and kept the products they wanted on the shelf.

The store sits in the middle of a residential block on a street that is barely wide enough for one car. There are no parking places. Large-pane glass windows and their fresh flower display frame the doorway, allowing you to peer into the neat and tidy space. It's a neighborhood shop that caters to the people who live in the surrounding houses and the students at the local public school (private high school).

The thing that impresses me the most about the store is that the owner has carefully curated his selection of items to maximize customer engagement. It's a small shop, probably about 650 square feet of retail space, but the selection of goods is impressive. He manages to address almost all shopping occasions with a very limited number of SKUs. There is always a sense of excitement when you walk in — you want to see what is new and different.

Walking around the shop, you can define his customers just from the range of his offer. For the local residents, there are baking and cooking products, fresh eggs and produce, and daily staples such as milk, cereal and household cleaners. For the students, there's a nice range of sweet and salty snacks that are priced to be easily accessible to someone who is spending their pocket money on a treat after school. For those who are looking for something a little more sophisticated, there is a selection of international beer, wine and spirits (including stylishly presented single-serve cocktails from France), and cheeses that would complement any table — from the rare find to your daily cheddar.

Regardless of your shopping needs, you will be able to find what you are looking for, or a high-quality substitute, and you will walk out with items you didn't know you needed.

What I find more interesting than the selection of products is the sourcing. The cheeses and milks are from local dairies. The pastries and bread products come from bakeries in the area. Locally brewed craft beers are included in the beer category, and gin (this is England, of course) that is distilled within 20 miles of the store sits on the shelf. Freshly made samosas and sausage rolls from a woman down the street are on display at the counter.

This is local sourcing at its finest.

To round things off, the customer service is polite, helpful and knowledgeable, but never intrusive. If you have a question, it can be answered. If you have a request, it can be fulfilled. The person behind the counter is always dignified and appreciative of your custom, offers a smattering of small talk if you're interested, and thanks you for shopping with them. Whenever I go in, I feel noticed, appreciated and very satisfied with my purchases.

The shop is in the middle of an urban residential area where everybody walks and if you were to stroll 10 minutes into town, you would find outposts of some of the country's major grocery chains whose prices, admittedly, are cheaper. So, why would people shop at Kingsgate rather than walking into town or, for that matter, ordering their groceries online?

Location, of course, is important, but it is not everything. If the store was dirty, poorly stocked and uninteresting, I don't think people would shop there unless it was an absolute emergency — and being an emergency supplier is not the way to create a sustainable business.

Now, I know that people on the street are not doing their weekly shopping at the store. But what I believe, based on my observations, is that they are doing their "top up" shopping, daily needs shopping, indulgence shopping and emergency re-supply shopping at the store.

The combination of products, customer service and location are the factors driving this business. There is no gasoline or electric vehicle (EV) charging station. There is no foodservice counter or beer cave to draw the customer in as attractions. It all comes down to basic retailing, executed well and delivered to the customer.

The reason I am dwelling on this site is that it is a perfect example of what I think the future of convenience retailing will be. Over the next 20 years, our convenience stores must adjust to a changing environment and customer. Not every c-store that currently depends on gasoline sales to be profitable will be a practical EV charging location. Not every store that currently operates without gasoline will be able to compete with online ordering and quick delivery services (those that survive).

As the convenience retail sector continues to consolidate, it will be the retailers who meet the needs of their local market and customers that will survive. As is often mentioned in Convenience Store News, knowing your market, and knowing your customer, will be the crucial tools for the future. So, how do we build upon what you're currently doing?

First, make sure that you have the products your customers want and will be looking for. You can't base your store on a standard product mix that's created from national averages and sales trends. Every state, every town, every neighborhood will have different needs based upon the ethnic and economic mix of its residents. You must know who your neighbors are and understand what is happening within a five-mile radius of your store.

Second, your store needs to be clean, well organized and well lit. It must be an attractive place to shop and one that draws the customer in. It is much too easy to provide customers with reasons not to shop with you and go to a competitor or online instead. You don't have to be fancy and theatrical, but you do have to be clean and inviting.

Third, differentiate yourself from your competitors — especially the big multistore chains. Find products that are sourced locally or adhere to some type of theme, whether it is sustainability, environmentalism, ethnic diversity, or supporting small businesses. Customers love to have a reason to shop with you, and you need to provide them with a story that gives them that reason.

Finally, promote your store and what you're doing by being involved in the community. Find groups and associations to interact with and support, sponsor local groups and sports teams, and work with local charities and assistance organizations. The more people know about you, your store and your story, the greater the interaction. Get your story out!

The future of convenience retailing will be based on our past. The local markets and corner stores that our great-grandparents shopped will provide the business plan for the years to come.

Editor's note: The opinions expressed in this article are the author's and do not necessarily reflect the views of Convenience Store News.

About the Author

Roy Strasburger
Roy Strasburger is CEO of StrasGlobal, a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. Read More