The days of trying to win customers over at the pump by simply offering the cheapest gasoline prices are over. Websites and apps have made it easy for motorists to find cheaper gasoline elsewhere at nearly all times. And even if a convenience store retailer truly can offer the lowest gas prices on the street, margins are squeezed and it does not mean consumers will come into the store and buy merchandise after their tanks are filled.
Hence, c-store retailers should not strive to offer the lowest gas prices. Instead, they should focus on becoming a destination via branding and the customer experience.
Fortunately, or unfortunately depending on which way you look at it, convenience stores have plenty of room for improvement when it comes to branding and brand equity. C-stores ranked “below average” in the retail category of the 2015 Harris Poll EquiTrend brand equity survey, which studied the brand health of more than 1,400 brands across 150 categories.
The reasons why c-stores performed poorly in this poll are surprising. Because several c-store chains are franchised as opposed to being wholly corporate-owned, the experience for customers is not the same from store to store of the same chain, leading consumers to have an inability to “bond” with c-store brands and ultimately lose their faith in a brand, explained Joan Sinopli, vice president of consulting, Nielsen Consumer Insights, North America. Nielsen is parent company to Harris Interactive, which presented the survey findings during a recent webinar.
In his book, “Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time,” master brand innovator and Starbucks Corp. CEO Howard Schultz wrote: “Mass advertising can help build brands, but authenticity is what makes them last. If people believe they share values with a company, they will stay loyal to the brand.”
Of course, there are some c-store retailers that already have the essence of branding down pat. But for others, there are plenty of ways to improve their branding so that consumers find their way to the pump and then from the pump to inside the c-store, according to Joe Bona, retail division president at New York City-based branding agency CBX.
For c-store retailers looking to create a new brand, or for those looking to improve upon an unsuccessful brand, the first step is to focus on things consumers might immediately recognize, Bona told Convenience Store News. What’s the name of the store? What does the logo look like? What are the colors? What is the architecture? “Those are the tangible things people see and remember when they walk away from the store,” he explained.
Once these questions have been answered, an emphasis should be placed on something the c-store is known for. If your c-store isn’t known for anything yet, it’s a good idea to brainstorm ideas about how to separate yourself from your competitors.
Regional powerhouses Wawa Inc. and Sheetz Inc. are great examples of c-store retailers that have become famous in the minds of their customers. Both retailers have excellent conversion rates in terms of attracting consumers from the pump to inside the store.
“Wawa is known for its hoagie sandwiches. Sheetz is known for its extensive menu items and restaurant kitchen-quality food,” said Bona. “These retailers truly have a point of difference that they are passionate about and can defend in a competitive marketplace. Their whole mission of being is this thing they are going to be famous for. That’s where companies have to start.”
Former Wawa CEO Howard Stoeckel wrote in his 2014 book, “The Wawa Way: How a Funny Name and Six Core Values Revolutionized Convenience,” that Wawa dominates the landscape because the c-store retailer is a “habit-forming, ritualistic” type of brand. “Remember the TV sitcom Cheers, set in the fictional Boston bar and restaurant where ‘everyone knows your name?’ We’re the Cheers of convenience stores,” Stoeckel wrote.
Whatever you choose to be known for, Bona stressed retailers must make all aspects of the experience desirable from as early as seeing a billboard on the interstate, to driving into the parking lot, reaching the forecourt and ultimately reaching the c-store itself.
Consumers draw conclusions about c-stores right away, he added, from the design of the canopies and pumps, to payments processing, to the types of fuels available.
Once an identity is established, retailers must execute day after day and year after year.
THINKING OUTSIDE THE BOX
While taking tips from successful c-store retailers is an excellent approach, Bona acknowledged the c-store industry tends to look within for help and take a “me-too” approach too often.
Outside the convenience channel, Virgin Airlines and its founder Sir Richard Branson are a great source of inspiration, CBX’s retail division president believes. Sure, some of his ideas are considered far out, but c-store retailers need to move the needle.
“At Virgin, they start to manage your experience right when you park your car,” Bona said. “Not when you check in at the airport, but the moment you drop off your car. That commitment to understanding the customer experience and what it takes to win is incredible.”
Imagine what a Virgin gas station would like. “It wouldn’t look like any you see today. Yes, there would be gas pumps and a canopy and some building that sells things behind it, but it would be done in such a different and compelling way that there would be nothing like the experience,” continued Bona.
Dashboard-mounted RFID chips enabling members of a loyalty program to fuel up might be something a Virgin gas station would incorporate. These RFID chips could analyze a customer’s preferences and send customized messages to their smartphone, encouraging them to walk inside the store and purchase their favorite product at a discount.
Bona prefers billboards as a way to draw customers to the c-store, but he’s quick to point out that the messages presented should not be generic. Quick-service restaurant chain Chick-fil-A is clever at drawing in consumers with quirky billboards, he relayed.
“[Consumers] almost have to do a double-take to understand these billboards sometimes,” the CBX exec concluded. “It doesn’t cost any more money for a c-store to have a billboard like Chick-fil-A as opposed to a [generic one]. Even if it’s bad advertising, it becomes part of your personality and part of who you are.”