Millennials Redefining How Speedway Does Business
ENON, Ohio — A new generation of consumers is edging Speedway LLC into a new direction.
Speaking at a breakfast meeting with the Dayton Chamber of Commerce, Speedway President Tony Kenney explained the convenience store chain is evolving as its customers — namely millennials — evolve.
As the Dayton Business Journal reported, the retailer formed its service model around Baby Boomers who had simpler service desires. However, that demographic makes up just 17.7 percent of Speedway's customers today.
Generation X, those 35 to 50, are 31.3 percent while millennials aged 18-34 are 42 percent.
"It's a different ball game with millennials, they all have smartphones and they're all connected, which allows more engagement, so we can connect with them through that mobile app," Kenney said. "It redefines how we think about marketing going forward."
The changing customer base led Speedway to focus less on fuel and more on other categories like foodservice, groceries and even wine. For example, the chain launched its Speedy Café concept in several dozen c-stores
In addition to category-focus shift, the chain is trying to drive consumers from the forecourt into the store with pump advertising and a rewards program focused on in-store items.
"The business is built around time, they want to get in and get out," he said. "If we have them come into the store they are there an average of three minutes, so if you want to sell, you have to sell fast."
While the c-store chain has embraced the future generation, Kenney noted he's less concerned with self-driving cars and alternative fuel as with the giants like Kroger "disrupting" the decentralized convenience store business.
"As I look at the business in the future there will be continued consolidation in the industry," he said. "The model is being challenged by technology."
With more than 154,000 convenience stores across the country, three times the number of supermarkets, Kenney said the industry has room to consolidate.
Roughly 67 percent of convenience stores nationally are single-store owners. And there are about 20 companies with a major market share of 500 or more, which have about 17 percent of the overall market. Among these are major brands like Shell, BP, Exxon Chevron and Marathon, according to the report.
The independent chains — like Circle K, 7-Eleven and Sheetz — will play a role in challenging the industry, as well as what he called "disruptors," big-box retailers like Kroger, Walmart and others that have built their own fueling station industry with lucrative rewards programs.
"It can be a pain in the you-know-what," he told the breakfast attendees. "They're leveraging the power of the big box to reduce fuel prices."
Enon-based Speedway, a Marathon Petroleum Corp. subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,770 convenience stores in 22 states.