How Small Operators Can Adapt to Today's Competitive Convenience Landscape

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How Small Operators Can Adapt to Today's Competitive Convenience Landscape

By Danielle Romano - 11/06/2017
Meiners' Market mobile app
Meiners' Market allows mobile payment inside the store.

CHICAGO — According to NACS figures, 67 percent of the 154,000-plus convenience stores in the United States are run by small operators (defined as operating one to 10 retail locations), and 63 percent are single-store operators (defined as operating one retail location).

Today’s small operators and single-store operators face consolidation, cross-channel competition, government legislation, the acceleration of technology, and much more. 

What are they doing to adapt and thrive in this rapidly changing and more competitive retail landscape?

During a NACS Show educational session titled “Where Is the Industry Going and What Does It Mean for the Small Retailer?” moderator Bill Hanifin, chief operating officer for Wise Marketer Group LLC, sat down with three small operators to find out what they’ve done to adapt, and what key advice they can offer fellow small operators.

As a convenience store retailer in Missouri, Mary Braddock, owner of Meiners’ Market, is keeping herself abreast of the latest government legislation. Right now, the state has 20 liquid laws that are threatening to put an excess tax on beverages and other products. She advises small operators to know how existing and new legislation will affect their business.

Braddock is also watching how the fueling and filling-up landscape is changing as more drivers turn to alternative fuels and electric vehicles (EV). In hopes of being an early adopter of EV, Braddock put six electric charging station spots in the parking lot of one Meiners’ Market. According to the owner, all six spots remain empty on a daily basis.

“The only car I might see parked there on any given day belongs to a frequent customer who I know for a fact isn’t driving an electric vehicle and who I know is using that spot while he shops the store,” she noted, adding that the challenge for her is “figuring out which alternative fuels will last and how to incorporate them.”

Fellow panelist Rick Levitan, owner of Convenience Retailing LLC, assured Braddock and other small operators that while EV may seem like an inevitable switch from traditional fuel, and the change will happen in the near future, “it’s not going to happen any time soon.”

“I’m not saying that it isn’t going to happen, but just be vigilant that it may come,” he expressed.

All three retailers on the panel agreed that customization remains key to keeping a competitive advantage over large c-store retailers who may be quicker to adapt to changing legislation or technological advancements.

For example, Braddock made the decision to add live bait to the product mix at one of her two Meiners’ Market locations, recognizing that it is situated near a river that is a popular fishing spot. By adding live bait to her merchandise, Braddock drew in non-customers who were adding a beverage, sandwich or ice to their basket in addition to bait. Eventually, these new shoppers came in frequently for non-fishing needs.

In another example, during the recent Solar Eclipse, Braddock’s brother told her local news stations were referencing locally owned stores as carriers for the special solar eclipse sunglasses. He went ahead and ordered dozens of boxes of the sunglasses. Upon putting them on her shelves, Braddock sold out of them instantly and gained an unexpected profit from an unexpected product.

“By customizing locally, we were able to sell out of those solar eclipse sunglasses. Bigger competitors would have been slower to roll out a good idea like that,” the Meiners’ Market owner explained.

The three retailers also agreed that small operators shouldn’t be afraid of technology and there is in fact a sweet spot for it among this kind of convenience retailer.

For Levitan and Convenience Retailing, which operates Auto Stream Car Care Centers alongside its five convenience stores, the service center is completely paper-free. Everything is done by iPad at the service bays and customers are sent before and after texts that show exactly what has been worked on and what has changed.

At Meiners’ Market, Braddock installed cameras at the register, which has significantly cut back on costs associated with employee theft, she said. She also implemented mobile payment inside the store.

Robert Razowsky, CEO of Rmarts LLC, which operates across Chicago and Milwaukee, keeps the business' back-office systems up to date with the latest technology and also uses the Excentus loyalty program.

“Take advantage of the opportunities,” he said.

In addition to customization and embracing technology, Razowsky offered these six key pieces of advice for small operators:

  1. Adapt quickly to contemporary trends.
  2. Take advantage of your size and nimbleness.
  3. Leverage suppliers and wholesalers’ knowledge.
  4. Plan accordingly and reset often.
  5. Seek out new profit generators, like customization and new products.
  6. Get involved locally. “Do what big retailers may or may not be able to do,” he advised.
     

The 2017 NACS Show took place Oct. 17-20 at Chicago’s McCormick Place.