New Tools Help Optimize C-Store Design

7/23/2012

By Gordon Wade, Category Management Association

Technology drives improvements in product adjacencies, store layout and traffic flow

For as long as I can remember, convenience store operators have fantasized about the perfect layout for the convenience store — one that would both optimize the transaction size and enhance the shopping experience. Over the years, many different approaches have been tried and some of the improvements gradually incorporated in new store designs.

Now, c-store management has new strategic challenges to address, such as:

  • The sharp decline in cigarette-related traffic, especially among young people and minorities;
  • The growth of the drug channel as a competitor for female convenience trips; and
  • The need to build foodservice traffic and improve the eating experience.

Inevitably, these new challenges bring design and layout issues to the forefront. Fortunately, new challenges often spur the development of new marketing tools and data to help solve the emerging problems. Here at the Category Management Association (CMA), we have recently been exposed to two new tools that speak directly to the c-store redesign challenge.

The first is VideoMining, which leverages a unique two-part technology. The system tapes every shopping trip, recording where the shopper goes and how the shopper behaves in the store. This is done with no intrusion into the shopping experience. Then, the company uses proprietary software to analyze where the shoppers go, what they buy, how long they take in each category, etc. It's fair to say that the c-store industry has never had such a comprehensive panoramic understanding of traffic as this tool provides. Keep in mind that this is not "claimed" behavior, nor is it behavior based on some digitally created faux experience.

Perhaps even more important, the technology will enable c-store strategists to test multiple layout and traffic flow options and get rapid results. In fact, they will be able to watch customers as they traverse a new layout or shop a redesigned food-service or financial services category. The speed, accuracy and breadth of the data capture are breathtaking. I have seen nothing equal to it since I stood in the data center at Catalina Marketing 10 years ago and watched in real-time the individual UPC-level transactions at register 10 in Kroger Hyde Park.

Another related tool from Retail Optimization Inc. — a total store space optimization company recently acquired by Revionics — reconfigures supermarket aisles and category adjacencies to optimize basket size for the total shopping trip. This tool could easily be adapted to the c-store channel and when combined with the learnings from VideoMining Corp., offer redesign opportunities never before available.

One advantage the c-store industry has compared to the grocery industry is that it's inherently simpler and less expensive to reconfigure 2,500 or 3,000 square feet of retail space than 50,000 square feet. Many grocery retailers know that a better aisle configuration exists, but they lack the financial flexibility and capital to make all the necessary changes rapidly.

Redesigning c-stores won't be free or even cheap, but the dynamics of the convenience industry will allow a more rapid response to the learnings from these new tools.

As someone once said, "I pray to live in exciting times." Well, these are exciting, rapidly changing and highly competitive times. Retailers need to use all the new tools to help them survive and thrive.

Gordon Wade, CEO of the Category Management Association, is one of the founders of the category management discipline. In 1991, along with Dr. Brian Harris and Bill Burns, he started The Partnering Group to improve collaboration between retailers and manufacturers. He is an alumnus of Procter & Gamble's marketing department and a graduate of Harvard University. Wade can be reached at [email protected].

Editor's Note: The opinions expressed in this column are the author's, and do not necessarily reflect the views of Convenience Store News.

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