In preparation for writing this issue’s cover story, “The Power of New Products,” I spent the better part of a week pouring over the results of our exclusive New Products Scorecard research looking for key similarities and differences in how the convenience store industry’s single-store owners tackle new products vs. their larger chain peers.
Among the similarities, both single stores and chains continue to up the number of new products carried each year. Both types of operators also use the same criteria to judge the success of new items: gross profit dollars and sales volume. And both independents and chains have found that the most effective way to promote new products is suggestive selling by store employees.
In the area of differences, chains (two or more stores) still add a greater number of new products annually than single stores. And once new products make it into the stores, the industry’s one-store operators are less patient in regards to giving the items time to prove themselves.
The most striking difference I uncovered in our research results, however, is how chains vs. single stores characterize their involvement with consumer product goods suppliers on new product development. This question, more than any other, showed a divide between chains and single stores. Three-quarters of single stores indicated they have absolutely no input in the process. Among chains, this percentage dropped significantly, to 47 percent.
Still, less than 7 percent of retailers industrywide described their contributions to new product development as a “close collaboration” with their suppliers. Imagine how the success rate of new products in the convenience channel could be improved if retailers and suppliers worked together more diligently to ensure the best outcome for both sides. And not just chain retailers, but the 90,000-plus single-store owners who operate nearly two-thirds of the nation’s c-stores.
The convenience store industry, like many other retail industries, has made great progress in recent years in improving the teamwork between suppliers and retailers, but more can be done to better innovate and execute together, leading to a stronger end result for everyone.
A perfect 10 will never be attained without true collaboration.