Kum & Go's Prized Prototype

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Kum & Go's Prized Prototype

By Renee M. Covino

Prototypes come and prototypes go, but recently, a low-budget Kum & Go remodel (awarded honorable mention in Convenience Store News' 2007 Store Design Contest) turned out be a real keeper.

It all began nearly two years ago, when the West Des Moines, Iowa-based chain, with the help of vendor and design partners, created three distinct prototypes. Ultimately, one would be chosen as a template for a more unified and profitable Kum & Go of the future.

"Our primary objectives were to increase sales, offer a consistent Kum & Go brand, simplify operations and differentiate ourselves with particular, proven products," maintained Kevin Krause, senior vice president of marketing.

The "test" site, located in Polk City, Iowa -- an existing store that was acquired by the chain 10 years ago and then recently remodeled -- was the clear winner.

"Probably its biggest success was the increase in average customer transaction," said Krause. "We increased it just under 10 percent."

In conjunction, the store's "gas only" customers went down by more than 10 percent. "This is a good thing," Krause offered. "We reduced the ratio of those people who were not coming into the store. There's more of an enticement now for them to come inside."

Much of the Polk City store's successfully tested merchandising and design strategies (as well as continual updates/tested improvements) are being replicated in newly constructed stores.

"We did this at the starting point of our construction phase," Krause explained. "Most of our growth previously had been through the process of acquisitions, but in 2007 we built 14 stores, which was a new organizational high. It almost equaled the new stores we had built in our 47 years prior to that."

For 2008, the expectation is to exceed 20 additional new-store builds "if the weather and everything else cooperates," according to Krause. And another record in newly constructed stores is anticipated for 2009.

The exercise of creating the new store templates, including, of course, the Polk City "winning" one, took the chain in the direction of focusing on building new stores rather than acquiring them.

"This has been a very good process for us moving forward," stated Krause. "We'll always be open to acquisition opportunities, but we needed to make sure we had parallel means of growth."

New Blueprint
The Polk City store has become the new blueprint of success. While the chain is "always hoping to continually monitor and improve this," said Krause, some key elements of change have proven their worth.

"We've had a variety of looks over the years, but today we're trying to focus on the [brand's] script within the red oval, both in the store and throughout all signage and printed material," said Krause.

Working with GFX International, a retail design firm in Grayslake, Ill., Kum & Go eliminated store clutter and created a consistent brand image through intentionally segregated and freshly signed zones.

The objective -- "to eliminate as much as we could in-store, except for the key areas or zones, and then build on those," stated Jim McLaughlin, senior vice president of sales and client services for GFX.

"We created new signs with GFX and really put emphasis where we didn't before," Krause stated.

They chose a rich color pallet to accent the core sections, such as the fountain area, coffee area, hot foods and frozen beverages "using vibrant colors that still fit within our red and black theme," said Krause.

For example, "bright red was used for the fountain area, cool blue for frozen beverages. We used orange in the fresh food area and we put a false brick design in front of the beer cooler," Krause maintained.

Spot and "ambiance" lighting was used throughout. "We specifically wanted to light up the new signage," said Krause. "The bright illumination and more upscale look has been inviting to customers."

Food Lessons
Consistency also extends to the updated Kum & Go hot food offering. The chain's "go fresh" market features Hot Stuff Foods on the go, with an emphasis on the fresh pizza program.

"We've given it unique, prominent placement," said Krause. "In fact, we feel that the pizza was one of the drivers behind increasing our average customer transaction."

After trial and error, Kum & Go concluded that the fresh pizza program would stand as the exclusive pizza offering.

"We did try a microwave/packaged pizza program, also affiliated with Hot Stuff, but we found out when you have fresh pizza, no one buys microwave pizza," Krause explained.

In addition to the microwave pizza lesson, trial and error taught the company more of what not to do with its food offering.

"We tried a full-service roller grill program that sat right on the counter, but we found customers wanted to take care of it themselves," Krause stated.

Instead, Kum & Go maintains a kitchen area open to customers "where they can prep their own food," said Krause.

Beyond the food, Kum & Go's new-store plan calls for the reduction of excess inventory, while at the same time, allowing for new and exciting SKUs.

"We looked at justifying the total number of SKUs we had in all areas of the store," Krause explained. "We also allocated space for featuring and showcasing new items & areas of opportunity we hadn't had before. We've re-configured this area towards the front."

Also newly highlighted is Kum & Go's private label program. "We're making a bigger deal of it," said Krause. "We've created value signage to show our customers the exact cost savings [as compared to the national brands]. We didn't have that before."