CSNews Exclusive: Building a Hometown Brand

ATLANTA -- Driving northward on Atlanta's I-85, out of the metropolis and into the suburbs, a billboard informs commuters, vacationers and commercial drivers: "Beer. Because you never got a pony." The statement, in bold text, lies atop a background of golden, bubbly beer, and is accompanied solely by the RaceTrac logo. This quizzical, yet smile-inducing statement is more than a clever marketing campaign -- it represents a new approach for the Atlanta-based convenience store chain as it attempts to establish a strong brand in its massive hometown market.

"We're at the formative stages of brand building and marketing," Chris Passarell, director of marketing for RaceTrac told CSNews Online. "We're taking a new approach by considering our brand first and making decisions that promote the RaceTrac brand."

All branding efforts and programs at RaceTrac, which maintains a network of 287 stores in five states, can be summed up in one word – differentiation. From unique marketing campaigns, partners and sponsorships, to regional and distinctive products in its stores, the chain is focusing on what makes it different to make it the preferred stop for on-the-go consumers.

"What we want to do from now on is differentiate RaceTrac -- have breakthrough ideas and carve out our own niche -- and we're focusing those aspects on everything we do," said Passarell.

For this reason, RaceTrac was chosen as the subject of Convenience Store News' fourth-annual Virtual Store Tour, an exclusive feature that highlights leading retailers in the hometown of the annual NACS Show. This year, CSNews focuses on only one retailer, to provide a more in-depth and first-hand look at the company, its current initiatives and new stores.

Stores Stand Out The company owns and operates 63 RaceTrac c-stores in Georgia -- 62 of which are included in its Atlanta market. It also boasts another 36 RaceWay locations in Atlanta, which are company owned and contract operated.

Recent and new store locations are positioned along high-traffic roads to target "people who are on their way to somewhere, and find a need to stop in and get whatever they might want or need on the way," Allison Moran, senior vice president of the RaceTrac division, told CSNews. "In comparison to our older stores that were really focused on the highway commuter, we're now seeing an opportunity with our inside offer to complement neighborhoods and communities with commuters. … We are becoming more of a neighborhood store, where people seek to come out at different times of the day."

As part of this neighborhood store focus, RaceTrac makes a point to offer some brands that also call Atlanta home, namely Atlanta Bread Co.'s baked goods, and of course, Coca-Cola's portfolio of fountain and packaged beverages. The chain also offers food brands associated with quality. For example, all hot dogs sold in stores are Nathan's brand, and the chain stocks Krispy Kreme doughnuts.

RaceTrac also brings the quality perception to its own fresh food and foodservice items, while also striving for differentiation in product selection. A little more than a year ago, RaceTrac brought in a classically trained chef to develop the chain's foodservice offer with the goal of "surprising people and differentiating us from the competition in terms of quality and variety," said Passarell.

On the hot food side, ethnic-inspired menu items such as mini beef tacos, pork carnitas quesadillas and breakfast burritos have been added to meet consumers' needs for an on-the-go, convenient meal with flavor.

The goal is for customers to be confident they can get a good-quality product that they want, the way they want it, Moran said, noting RaceTrac's coffee area is a prime example of this.

"What we've learned is that consumers like to make it the way they want, and we give them the opportunity to do just that" by having a wide variety of coffee styles, flavors and condiments, she said. "There are different avenues by which to meet a need."

This was apparent at the two RaceTrac stores visited by CSNews as part of the Virtual Store Tour. Opened less than a year, the stores feature the chain's latest design. Customization is key at the coffee bar, where eight varieties of brewed hot coffee are available -- in flavors including Regular Joe, Slow Joe (decaf) and Molten Joe, plus various specialty blends -- along with iced coffee, two varieties of brewed iced tea, along with 14 types of specialty coffees and cappuccinos.

The chain's philosophy of differentiation extends even to the coffee cups, where phrases such as "Contains one serving of liquid motivation," adorn the paper vessels.

To fit the gamut of products RaceTrac stores sell, the chain is utilizing a 5,000-square-foot design, complete with a modernized exterior package. The design, which has been used at newly built and remodeled sites for roughly 2 ½ years, features pump islands and canopies that match the building's brick façade exterior, while the storefront features an expanse of windows topped with green awnings. Because the lots that new stores are built on are larger than previously, gas islands are also placed farther away from the store.

RaceTrac aims to have at least 30 parking spaces on the property, which requires a significantly larger piece of land than in the past, said Mark Reese, vice president of operations for the chain. "We're also trying to differentiate the pump islands from the store itself, so people don't associate food or the quality of the food with the gas islands," he said, noting properties also feature more detailed landscaping than in the past.

"As we moved into the convenience side of the business from fuel, we recognized the message that brands can have on the outside about the kind of offer you have on the inside," Moran explained. "And while I believe [the outside] now matches the consistent and strong offer we have on the inside, we are actually looking at new interior packages, more new than what you see today."

Once inside the store, an open floorplan beckons customers forward to the fresh foods displayed in a cold case. In the case, customers can find a plethora of prepared foods to-go under the RaceTrac brand, including deli sandwiches (egg salad, ham, chicken or turkey quarter pounders); footlong subs wrapped in paper (American, Italian and Cuban); Garden Salads with a customers' choice of dressing; and specialty wraps such as smoked turkey with swiss and Dijon mustard, and chicken Caesar on a spinach tortilla. Fresh side options and snacks are also merchandised here, such as fresh bananas and apples, hard boiled eggs, sliced apples and fruit cups, yogurts, and desserts.

A third-party delivers the items to stores every other day. And while the chain reports this offering has resonated well with guests, it is striving for more. "We think again, in the spirit of differentiation, it can be better than this. So we're looking at our options," said Passarell.

To the right, a massive roller grill and hot foods area also entices hungry customers. A hot case offers breakfast burritos, and biscuit and croissant sandwiches, six types of quesadillas and more desserts. Behind it is a roller grill large enough to seemingly hold hundreds of products at one time. Several varieties of sausage spin next to 100-percent beef Nathan's hot dogs. Breakfast options and chicken roller bites are also present, as are mozzarella sticks, taquitos, corn dogs, egg rolls and more.

Opposite the roller grill, Krispy Kreme and Atlanta Bread Co. baked goods are placed adjacent to the register area. Behind that, the coffee customization bar offers flavored syrups and creamers, sweeteners and some cross-merchandised packaged sweets and bars.

Approximately half of the back wall is lined with dispensed beverage options. To the leftmost side of the wall, 25 fountain heads are offered in a floor-to-ceiling, built-in display featuring wood cabinets, upscale countertops and stainless steel finishes. The machines themselves offer a quality guarantee, advertising RaceTrac's use of 100 percent filtered water and daily quality checks. To the right are eight flavors of frozen dispensed beverages under RaceTrac's Numb Skull brand. Continuing along the back wall is a massive coffee bar, with the same upscale cabinetry and a coffee-house-inspired mural above.

On the right side of the store, convenience store staples are displayed on low gondolas, while coolers line the back and right wall, lit with bright LED lights and displaying packaged beverages, alcoholic beverages and frozen goods.

There are a few characteristics that make Atlanta stick out from RaceTrac's other markets. "People are willing to spend more or shop more on coffee, and they are more info fresh foods than in other markets. Salads and fresh sandwiches do well here; Atlanta is healthier than other markets," said Reese, who added Atlanta also responds well to energy drinks and shots, thanks to the numerous colleges in the area. Because of this, the chain offers some unique brands of energy products not seen in other areas, such as Crunk. And if there is one brand preference in Atlanta, it is for Coke, which calls the city home.

"We are trying to get better versed regionally at what consumers are looking for," said Moran. "We look at that community and that store, to see what that market needs."

To satisfy those needs, RaceTrac is active in the marketplace, finding not only what consumers are looking for, but things they may not consciously know they are looking for, she said. As part of this, the chain is constantly testing new items in stores.

"One of the great things about RaceTrac is that we aren't afraid to try things. If there is a consumer need out there that we can meet, we're going to try it," added Passarell. "I think that's what makes [the company] exciting."

One product test at the time of CSNews' visit was Silly Bandz, a novelty item made from shaped rubber bands. As a quick grab-and-go item on the counters, it has been a hit with children, according to Moran.

RaceTrac's focus on being unique also extends to in-store signage and design. Company executives feel the new stores don't look like a typical convenience store, which is a positive.

"We really focused more on featuring products and lifestyle imagery. We don't need a big picture of a hamburger, everyone knows what a hamburger looks like," said Passarell. "But we can bring stores to life by showing people being active and energetic. It brings energy to a store, and breaks out of the stereotypical mold of a c-store. Differentiation is huge for us."

Marketing the Difference Part of leveraging what RaceTrac views as its neighborhood store opportunity requires being known as a place where quality products can be purchased at a value, company executives noted. As part of a larger, brand-building program, RaceTrac launched a multi-faceted marketing campaign to get the word out about its beer selection and competitive prices that was in place at the time of CSNews' visit.

"We wanted to take an opportunity and look at our biggest categories as we reformulate the brand. Beer was one of the biggest categories that we felt would be successful, said Passarell. "We felt customers did associate c-stores with beer, but we wanted people to specifically associate RaceTrac with beer."

Messaging around Atlanta -- like the billboard mentioned above -- focused on the beer category message, while store-level messaging revolved around value and price points, "which is something c-stores aren't necessarily known for, but we feel we are very competitive in that area," he said.

Online advertisements also engaged consumers with creative, beer-themed messages that encouraged people to choose their favorite item from a pair: such as a beer or a pony, and a beer or a ninja.

Helping the convenience store chain on its brand-building journey is Atlanta-based Fitzgerald+CO, which RaceTrac hired as its ad agency this year. The company's first major campaign with the chain was a "Free Fill" promo where customers could purchase a mug at the beginning of summer for $6.99, and would receive free refills of the cup for three months, ending on Labor Day.

RaceTrac is also partnering with regional sports and entertainment properties in Atlanta that connect with its target demographic of people it calls "Everyday Adventurers." To date, the chain has partnered with the Gladiators MLH, the Verizon Wireless amphitheater and Six Flags. It also has plans in the works to partner with a local NASCAR event, as well as with Curtis Lofton, linebacker for the Atlanta Falcons, who was expected to make store appearances in September and October surrounding a tailgating themed promotion.

"We're looking at a variety of partnerships that will bring the brand to life in the marketplace," said Passarell.

To engage its tech savvy target customers, RaceTrac completely revamped its Web site, while also participating on the social media side using Facebook and Twitter. "The opportunity there is to provide depth to all the different advertising campaigns, and to get chatter going with guests," said Passarell.

Taking it one step further in the Atlanta market is the chain's use of Foursquare, a social media tool with a geolocation feature. Customers can use their smartphones to "check in" to a particular RaceTrac location during each visit, and if they check in the most during a specified time period, will become the "mayor" of that location. When customers earn this title, they receive electronic coupons, and as visits increase, better deals and offers are delivered.

And for the future, mobile apps are being explored as another way to engage customers digitally.

An Eye on the Competition A major competitor to RaceTrac in the Atlanta market is the Tulsa, Okla.-based QuikTrip. The chain has a very similar model to RaceTrac -- an independent, company-owned operator very focused on a consistent offer to the consumer, Moran said.
But having a strong competitor can be beneficial in several ways.

"When we're both in a market together, they help raise the bar overall for the consumers' perspective of convenience stores. With the stores we both have in Atlanta, people realize they can get a great cup of coffee and foodservice from a c-store," said Reese. "That being said, operating in a commodities-based business, we've tried to focus on investing in our people and focusing on our guests to differentiate ourselves. We treat them well and try to have the best customer service not only in the c-store channel, but in the retail industry."

"I don't believe Atlanta is fully saturated by any means," said Moran. "One of the opportunities that the current state of the economy gives us is that we can get real estate at a much better price now than we could previously. As much as I think Atlanta is going through some challenges economically, it still remains a sought-after metropolitan area to live."

Another plus to the Atlanta market is its size. RaceTrac's Atlanta region spans hundreds of miles, and the chain feels it has a plethora of opportunities to grow, said Reese.

RaceTrac's growth comes from building new locations from the ground up. The chain's growth target is a 10 percent increase in store count per year, which fluctuates depending on timing, development and permitting, she said, noting that fortunately for the chain, Atlanta is not as stringent as other markets in regards to permitting, so it gives the chain an opportunity to find the right location and build rapidly. Currently it takes the chain three months to build a new store from the construction start date.

As of CSNews' visit, between 20-30 RaceTrac stores sported the new design shown as part of this Virtual Store Tour, while another 30 were under construction and when complete, would feature the design, according to Reese, who also noted the chain is continually improving and refining the design as stores are constructed. Remodels are also being conducted at the bottom 15 percent of the chain's stores, where older buildings are seeing investments to bring them up to the current brand standard, he said.