Issues & Leaders With Don Longo: Greg Parker
MIAMI BEACH, Fla. -- Who are the authorities on the future of the convenience store industry, and what can you learn from them? In this series of exclusive one-on-one interviews with c-store industry leaders, started in 2010, Convenience Store News Editor-in-Chief Don Longo explores the most important trends and issues facing the convenience store industry.
This month, Longo interviews Greg Parker, president and CEO of Savannah, Ga.-based The Parker Cos., operator of 27 convenience stores in South Carolina and southeast Georgia. Despite its relatively small size, Parker's is one of the most innovative convenience store companies in the nation.
Among Parker's industry-leading programs are:
• Its PumpPal program, which gives customers up to 10 cents per gallon in savings every day. PumpPal allows customers who sign up for the chain's direct withdrawal debit program to receive fuel discounts through a loyalty card, and helps the chain avoid the huge transaction fees associated with traditional Visa and MasterCard debit and credit cards;
• Its use of the latest technology, including fuel price management software; and
• Its leadership in foodservice and attracting female customers to its stores.
In addition, Parker's is known for its community service activities, such as the chain's 1-Cent Wednesdays "Fueling the Community" program, which sets aside one cent of every gallon of gasoline sold on the first Wednesday of each month as a donation to local schools. Recently, Parker's presented donations from its Fueling the Community program to four Bluffton, S.C., schools totaling $2,500. It also presented a Fueling the Community donation to Savannah-Chatham County Public Schools totaling $2.500.
Parker is also active with the industry's trade association NACS and currently serves as chairman of the association's foodservice committee. He was recently a featured speaker at the annual NACS Leadership Forum.
Longo: Why is it important for a retailer to give back to the community through good works?
Parker: Giving back to the community is an important way to support our customer base. A retailer shouldn't just sit back in an ivory tower and take from customers. It's important to give as well. We are living in an age of empathy. The companies that give back are the companies consumers want to patronize and support. Be a paragon of virtue and customers will reward your efforts.
In the end, c-store retailers are going after the same customers and pretty much sell the same products. Our Fueling the Community program is a way to create stickiness and to cultivate brand loyalty by doing something valuable that benefits our customers and the communities to which we are connected.
Longo: How did Parker's Fueling the Community program come about, and what kind of results have you seen?
Parker: Our CFO Terri Heidmann learned about the overall concept for the Fueling Community program through a share group she is involved with. We refined the concept and made it our own. The "Fueling the Community" program is an important way to touch our customers on a local level. This is a way to reach our customers in a profound way.
Education is such an important cause to support. Education does so much more than meets the eye. It's about eradicating poverty, giving people opportunities, reducing crime and improving workforce development. It's about making a real difference in the communities where we do business.
Fueling the Community has received tremendous support from our PumpPal members and from Parker's customers. They recognize that Fueling the Community makes Parker's uniquely connected to the things that matter most to them in their own lives.
Longo: What do you consider to be the most important trends influencing retailing today?
Parker: Digital technology and loyalty. Social media and digital technology are changing the way we communicate with customers. From mobile apps and Facebook posts to e-blasts and bounce-back rewards, we have more opportunities than ever to communicate with customers.
At the same time, creating brand loyalty remains critical for retailers to succeed in today's market. It's not enough to sell products to customers; you have to encourage those customers to care enough about your brand to seek it out, recommend it to their friends and make it part of their daily routine.
Longo: Please comment on the most significant developments relating specifically to the convenience industry.
Parker: As the number of stores increases and the overall consumption of gas decreases, there is greater competition in our industry than ever before. Gas consumption has decreased by 4.5 percent as consumers drive more fuel-efficient vehicles and become more mindful of their driving habits in light of high gas prices. Everyone is fighting for a greater market share, which means everyone has to get better at what they do. To me, this is an inspiring development in our industry because it forces everyone to step up their game.
Longo: As a c-store retailer with a fairly advanced foodservice and gourmet store positioning, how important is it for c-store retailers to win more women shoppers? What are the most effective ways to do so?
Parker: Attracting more female shoppers has been key to our success at Parker's. We all know that Bubba is our No. 1 customer, but we focus our attention on the working mother. She's the lens through which we view everything we do because she's the most time-starved and most demanding customer. She wants stores that are safe, clean and well-lit. She's a discerning customer with high standards.
Don't ever lose sight of Bubba –-- he's still our bread and butter. But if you create retail environments that please women, you get everyone else in the process. The most-effective ways to do that are to streamline speed of transactions at the register, improve lighting in the store, offer clean bathrooms, make smart landscaping decisions, and keep store windows clean and trash cans emptied.
Longo: Could you update us on the latest developments at Parker's Convenience Stores? What are you expansion plans? What parts of the business are performing exceptionally well? Any parts lagging?
Parker: We launched our PumpPal customer loyalty club in March 2011, which has been a tremendous success by any measure. We currently have more than 44,000 members who have saved more than $1.3 million since the program's inception. That's real savings during tough economic times.
We also launched our Fueling the Community program in 2011 and have made generous donations to schools throughout coastal Georgia and South Carolina. Our PumpPal members can choose to support individual public or private schools, making these donations available to every child in every community where we do business.
As far as expansion plans, we have opened five new Parker's stores in the past 13 months. At Parker's, our goal is to open a new store every two months. We think it's a great time to build new stores. Money is cheap, land costs are declining, and construction and labor costs are low. We want to grow strategically now, while the economy is in a down cycle, so that we are well-positioned to reap the benefits when the economy bounces back.
At Parker's, the parts of our business that are performing exceptionally well include our PumpPal loyalty program, as well as OTP (other tobacco products) sales including snuff and chewing tobacco. One area that has been lagging is cigarette profits. That's because suppliers are diminishing opportunities for retailers to make a profit on cigarette sales. The pressure from suppliers, combined with decreasing overall demand for cigarettes, has caused cigarette profits to decline in recent years.
Longo: Please discuss the role suppliers play in today's convenience store industry and how the retailer-supplier relationship has evolved over the past five years? How is it likely to change in the next five years?
Parker: Suppliers are realizing that there is no one-size-fits-all option any more. In today's economic climate, suppliers have to customize offers to particular retailers. Nimbleness is more important than ever for suppliers. Successful suppliers are the ones who understand the needs of retailers and who create opportunities for retailers to profit. Suppliers who bully or try to strong-arm retailers will not succeed in the long run.
Longo: Switching gears, what are the foremost non-industry-specific retailing issues that are on your mind?
Parker: Social media is actively transforming nations, as well as the retail world. Social media served as a key conduit for the democratization of nations during the Arab Spring, but it also defines the relationship between retailers and customers in today's marketplace.
Loyalty is another critical retail issue. It's more important than ever to engender greater customer loyalty through strategic use of social media and by giving back to the community. The retail companies that give back are the ones that will be the champions of the consumer in the long run.