How C-store Retailers Can Succeed in the Future
CHICAGO — To get ahead in the future, convenience store operators must learn to think differently.
Case in point: In just one year's time, the thought process in the fuels industry has changed, noted John Eichberger, executive director of the Fuels Institute, which is housed under NACS, the Association for Convenience & Fuel Retailing. Eichberger served one of the speakers on the final day of the 2016 NACS State of the Industry (SOI) Summit, which took place earlier this week.
“Last year, I said at this same event that electric vehicles (EVs) are not a threat. But electric’s sex appeal is growing,” he told attendees of the three-day event held at Chicago’s Hyatt Regency O’Hare hotel.
According to Eichberger, the sex appeal of EVs is growing all due to one man: Elon Musk, founder of Tesla Motors, whom some have called the real-life Tony Stark (aka Iron Man in comic books). The announcement that Tesla will introduce its Model 3, capable of traveling more than 300 miles on a single charge, with the ability to recharge at an 80-percent level in just 30 minutes, was met with 180,000 orders on the first day of pre-sales, even though it is not set to be manufactured until 2017.
This announcement is certainly a potential disruptive force for the c-store industry, but Eichberger did question how big the market for electric vehicles will truly become. “It is a game-changer for the electric vehicle market. [Musk] is more than tripling the market,” he said. “But I question if it’s a game-changer for the industry. Considering 17 million vehicles were sold last year, electric vehicles will still be a small portion of the overall U.S. market.”
Hydrogen fuel cell vehicles could also become a future game-changer in the U.S. fuels landscape, considering their standing as an environmentally friendly alternative to traditional petroleum, as well as their rapid three-to-five minute refueling times, Eichberger added. However, only about 15 gas stations currently offer hydrogen fuel, with most of these locations in California, and infrastructure costs are high for c-stores hoping to offer the renewable fuel.
“The jury is still out,” Eichberger said. “There is a steep road for hydrogen [before it can be considered a successful renewable fuel].”
BE AN IDEA GENERATOR
There is little convenience store retailers can do about the fuel market being changed by the Musks of the world, but there are many things they can do to ensure the future success of their own stores.
Future success will be driven by brainstorming new ideas, according to SOI Summit presenter David Schonthal, clinical assistant professor of innovation and entrepreneurship at Northwestern University’s Kellogg School of Management.
Retailers need to be “design thinkers,” he said, which involves three aspects: learning about the world; having ideas; and making ideas real.
To find the right ideas, c-store retailers should talk to customers and try to solve their problems. “How often do we consider what customers do before and after the visit?” Schonthal posed.
Retailers will find very few ideas inside an office environment, he stressed. “Everything is out there.”
Schonthal offered other tidbits of advice for any c-store retailer looking to find that next great idea:
- Be the customer by walking in their shoes.
- Go extreme. The best ideas rarely ever come from the mean; look at extreme examples.
- Defer judgement. Retailers need a large quantity of ideas before coming up with a great idea. Don’t automatically reject a wild idea that doesn’t sound feasible now. This is where some of the greatest ideas come from.
- Everyone will fail, but it’s much better to fail quickly so you can succeed sooner.
The 2016 NACS State of the Industry Summit took place April 11-13.