Retailer-Supplier Partnerships Equal Success
ATLANTA — Convenience store operators and product suppliers are not just two sides of the same retail coin. They're individual units that can come together to improve the overall outcome and create success on both sides, according to the "Partnership Success Stories" educational session held at the 2016 NACS Show, taking place in Atlanta this week.
"We can be better by understanding the dynamics of partnerships," said moderator Michelle Davis, senior director of sales for f'real foods.
Retailer panel members were Derek Gaskins, chief customer officer for Rutter's Farm Stores; Greg Lorance, dispensed beverages category manager for Cumberland Farms Inc.; Joey Hobson, executive director of category management for Maverik Inc.; and Terry Roesler, procurement manager for Kwik Trip Inc.
The panelists shared ways their companies partnered with manufacturers, what tools and resources they used to optimize those partnerships, and provided insight on the impact to the company in terms of morale, revenue and sales.
When Lorance was put in charge of Cumberland Farms' coffee program in 2008, he needed to work with a vendor partner to learn more about the segment and utilize the vendor's efficiencies, skills and understanding. In the face of strong competition and five years of declining hot beverage sales, the c-store chain partnered with Sara Lee to create a "market-eye study."
The biggest problem was that customers simply didn't like the coffee. To fix this, Cumberland Farms started over and tested more than 200 varieties of new coffee blends and sampled them to see what customers liked, not what company officials liked. "The customer has to tell you that," Lorance said.
The chain then worked with an advertising partner to identify what consumers liked and didn't like and promote accordingly. Coffee quality was the primary focus, with the low price secondary, and Cumberland Farms invested in "Free Fridays" for coffee.
As a result, the chain reversed the segment's downward trend, saw major category growth, and even developed an incremental iced coffee program.
Kwik Trip partnered with f'real foods to find a win-win solution when the old f'real milkshake blender was going out of support. The chain negotiated to push back the delivery date of the new equipment and provided its own warranty service, which allowed f'real to spread out its production and use Kwik Trip as a forecasting tool. Meanwhile, when machines needed service, Kwik Trip had a faster response time and greater operating time.
Roesler suggested to audience members that they schedule routine conversations with equipment vendors to help them understand the retail end and challenge them to add value.
"How is it that we learn about innovation?" he asked.
When Rutter's designed its Summer of Freedom sweepstakes, it took a broader approach by working with multiple key suppliers during this peak selling season, aligning products and promotions to amplify the sweepstakes' impact. The chain used a currency that was desirable to customers, Rutter's Rewards VIP Club points, and gave away a variety of c-store products and free gas for a year.
By positioning products regularly found in c-stores as prizes, the chain combated the perception that no one really wins c-store contests. This made the sweepstakes exciting, scalable and repeatable. This was particularly important, as in order to be a true retailer-vendor partnership, the sweepstakes was "not about brand switching," Gaskins said. Rutter's wanted to grow sweepstakes participation and sales and increase loyalty program enrollment, which it did.
Rutter's also used consumer information to target prizes, ensuring that, for example, a regular consumer of energy drinks might receive a free Red Bull as a prize, rather than giving out products with no regard for what winners would enjoy receiving.
"We have taken our summer program to the ultimate heights," Gaskins said.
Maverik also found success through a product partnership, but a particular one. When The Hershey Co. was preparing to launch Reese's Stuffed With Pieces peanut butter cups, Maverik "decided we wanted to be the first and the best at launching this particular product," Hobson said.
Maverik and Hershey put their brand and creative teams together to decide on how to get the best speed to market on the product, and came up with a full marketing program that included e-mail blasts, TV and radio advertising, and in-store reminders.
Researching Hershey's past product launches also provided some insight into best practices. Maverik advertised Reese's Stuffed as "coming soon," prompting customers to make a mental note that they would be able to find it at Maverik. A TV spot that was a modern take on the original Reese's commercial was also released.
The ensuing significant growth of Maverik's candy category was "based in large part on this launch" and outdid the growth of competitors, Hobson said. "One launch was halo to our entire candy category."
The 2016 NACS Show, hosted by NACS, the Association for Convenience & Fuel Retailing, wraps up Oct. 21 at Atlanta's Georgia World Congress Center.