NACS Show 2014 Gets on a Roll
LAS VEGAS -- The convenience store industry descended upon Sin City Tuesday for opening day of the 2014 NACS Show where education and networking opportunities greeted showgoers.
Attendees had their choice of more than two dozen educational sessions addressing such varied topics as inventory matters, cybercrime, appealing to female customers and menu planning.
Here's a flavor of what was presented:
Any given c-store today probably has 10-15 percent excess inventory, according to David Bishop, managing partner at Balvor LLC, who moderated "Inventory Matters: Processes & Planograms." The session looked at how c-stores can manage and reduce excess inventory with low-tech, inexpensive approaches.
Ray Johnson, operations manager at 20-store chain Speedee Mart Inc. in Las Vegas, was presented as a trailblazing retailer who works with direct-store-delivery suppliers to come up with effective solutions, enabling him to carry electronic cigarettes imported from London in 2007 and craft beers two and a half years ago.
More recently, he saw a “less is more” opportunity in half-gallons of milk, doing away with milk by the gallon and thereby, some excess inventory. After observing the product from the field, he realized “we could not compete with Wal-Mart and grocery stores and dollar stores. So, they win. No more gallons for us.”
Instead, Johnson worked with his milk distributor to set the price of one half-gallon at regular price and then offer the second half-gallon for a buck — “exactly what we were previously selling the gallon for, but this way, my margin went from 10 [percent] to 30 [percent],” he stated.
Attention Female Shoppers
Retailers that want to appeal to women may have to do something surprising –- think like a man.
"In order to understand what women want, you need to know what men want," said Michelle DeLamielleure, global consumer insights senior manager for General Mills Inc.
Speaking during the "Appealing to Female Consumers" session, DeLamielleure and Christopher Quam, General Mills' global consumer insights manager, pointed out that women and men cite the same top 10 factors in choosing to shop at a c-store, but women view the factors differently in terms of importance.
The factors comprising the top five are convenient location, cleanliness, safety, prepackaged foods that are not out of date, and the ability to get in and out quickly. Because of these similarities, appealing to women will not alienate men, DeLamielleure explained.
"It ultimately boils down to six key factors that women view differently than men," Quam noted. To attract the female consumer, retailers should focus on appetizing treats; better-for-you offerings; child-friendly stores; deals and prices; experience and freshness, he said.
Food, Glorious Food
Foodservice is the name of the game for all convenience stores, but it's not enough to just implement a program and sit back.
"Never be satisfied where you are, because you are never where you could be," said Jerry Weiner, vice president of foodservice at Rutter's Farm Stores, adding that retailers need to keep evolving their foodservice menu year to year based on consumer demands, needs and wants
His insights came during the "Menu Planning: Serving Up Success" session with Keith Boston, director of prepared foods for The Cumberland Gulf Group.
According to Weiner, c-store retailers can always find ways to prove their food offering program. For example, they can improve sales, improve margins, improve labor efficiencies, and discover ways to better control spoilage and other costs.
"If you want to be in foodservice, cost accounting is important," Boston added.
Cybercrime is definitely the technology topic receiving the most press lately, and it is certainly on the minds of most convenience store retailers.
“Why are we here?” asked Phil Schwartz, manager of I/S, credit card systems and POS applications support at Valero Energy Corp., moderator of the “Cybercrime: Don’t Get Breached” session. “We want to avoid becoming a member of the ‘Breach of the Month Club.'"
Ninety-two percent of the 100,000 breach incidents studied by Verizon in the last 10 years have exhibited nine patterns, according to Kevin Thompson, risk intelligence researcher for Verizon’s risk team. They are point-of-sale intrusions, web app attacks, insider misuse, physical theft/loss, miscellaneous errors, crimeware, payment card skimming, denial of service and cyberespionage.
Big Ideas for Small Operators
Technology use is not only limited to the big c-store chains. The “Big Ideas in Technology for Small Operators” session featured two convenience store retailers that have recently made significant upgrades to their technology equipment.
Colette Blount, director of marketing at Gonzalez, Texas-based Tiger Tote Food Stores, spoke of how her company upgraded the point-of-sale system for all 22 stores in just six months and the results have been tremendous. “We added 1 percent to our profit margins,” she said.
Greg Smith, director, management information systems at Lassus Bros. Oil Co., discussed adding WiFi to the chain’s stores, using Verizon to implement 10 gigabytes of video the retailer’s 32 stores can share. The c-store chain uses the streaming video to gauge shopping habits and more.
The Value of Part-Timers
Even though part-time employees work fewer hours than full-time employees, that doesn't make them any less valuable or fundamental to the convenience industry, according to Cindi Summers, vice president of human resources at Casey's General Stores Inc.
In her operations track presentation, "Enhancing Part-Time Employee Expectations," Summers discussed how Casey's approaches its goal of attracting, retaining and optimizing part-time employees, who make up 63 percent of the company's workforce.
Retailers should start out with a clear understanding of what they're looking for in an employee, what the available application pool is like and what new employees will be trained to do —especially important in an industry where tasks can include pizza delivery and car wash operation along with working the cash register. "Our employees aren't just clerks anymore," Summers said.
C-store operators should also value consistency and treat part-time employees the same as those who work full time, she advised, while being mindful of the advantages they offer, such as cost effectiveness and flexible scheduling. Plus, they shouldn't assume part-time workers aren't interested in a career.
Golden State Spotlight
As the largest state in the United States, California is often on the forefront of regulations and hot-button issues, some of which affect the entire convenience store industry.
The latest California regulation to be signed into law is a ban on single-use plastic bags in convenience and grocery stores. The law goes into effect in grocery stores and superstores such as Walmart in July 2015 and in c-stores in 2016.
While that's the latest, it is not the only issue Golden State operators are facing. Other talked-about topics are new state toxic chemical risk guidelines; underground storage tank program extension; mandatory paid sick leave; and carbon reductions aimed at petroleum fuels, according to Jay McKeeman, vice president of government relations for the California Independent Oil Marketers Association.
During Tuesday's "Attention California Operators: Hot Topics From the Golden State" session, he advised all retailers to take a close look at all the provisions of any regulation –- especially as they change on not only the state level, but also the local level.
The 2014 NACS Show continues through Friday at the Las Vegas Convention Center.