A new animal: Why foodvenience represents the future, by Joe Bona

If a biologist in the Amazon rainforest finds a new frog species, the next step is to give it a name. And since a new animal clearly has evolved in the convenience retail ecosystem, we might as well do the same. The animal in question is neither a full-blown QSR/fast-casual chain nor a traditional convenience store. Rather, it skillfully blends elements of these established concepts in ways that are both advantageous and new.

What to call this new creature? My vote is for the term foodvenience.

In the natural world, new species evolve in part because of changing environmental conditions. In the same way, foodvenience concepts are an adaptive response to significant shifts in the retail jungle—a kill-or-be-killed world in which finicky consumers increasingly expect higher quality and healthier foods (with customisable choices to boot) pretty much anywhere they go.

Today’s consumers are eating out more frequently and tilting toward premium offerings. They also crave something that is even more challenging for retail operators to provide—authenticity. This is not just a Millennial thing. These days, Gen Xers and baby boomers are just as likely as Millennials to shop at farmers markets, eat at “farm-to-table” restaurants or carefully scrutinise ingredient labels to avoid GMOs, added sugars or food allergens.

In nature, adaptations allow new species to out-compete older “models.” But in the retail world, do traditional c-stores selling mostly beer, cigarettes and lotto tickets truly represent where the industry is headed, or is the future better represented by the evolutionary efforts of Irish chains such as Topaz and Applegreen, or U.S. concepts like Sheetz and Wawa?

To be sure, thousands of traditional, no-frills c-stores will continue to exist. However, they will not be able to crawl onto dry land and exploit the new niche increasingly occupied by foodvenience concepts. While these next-generation stores do sell beer, cigarettes and lotto, they happen to be so focused on food and the customer experience that they can actually steal market share from both fast casual and QSR formats alike.

In years to come, the best foodvenience chains will give the likes of Pret A Manger, Itsu, Chipotle Mexican Grill, Five Guys Burgers and Fries, Shake Shack, Planet Organic and Leon a run for their collective money. More and more consumers will buy into the notion that they can get customised, high-quality tossed salads, pizzas or fresh-made sandwiches (not to mention some petrol) at stores that happen to be an easy stop on their way to work.

As foodvenience becomes more commonplace, players in this space will need to up the ante. The fast-casual arena offers a picture of what this will look like. Twenty years ago, a concept like Sweetgreen would have been viable in just a few “granola” college towns around the United States. Today, Sweetgreen has 51 locations across the country, with nine more on the way. Walk into a Sweetgreen and you’ll find a dizzying array of greens, grains, bases, proteins and dressings— all of it marked to indicate gluten-free or vegan, of course. Some customers buy readymade dishes such as “Rad Thai” or “Guacamole Greens,” while others build their own creations. Everything about Sweetgreen suggests a cut above. In marketing materials, Sweetgreen describes its cornerstones as “scratch cooking, transparency, sustainability, local sourcing and food safety.” It highlights store finishes that include “reclaimed hickory, barn board pine and bowling alley tables.” Not so long ago, all of this would have been unthinkable for a restaurant at this price point. But retail evolves.

Moreover, the appeal here is broad-based. When I was at a Sweetgreen location in New York City recently, I couldn’t help but chuckle at the hardhat-wearing construction workers standing in line alongside bearded Millennial hipsters and affluent moms in yoga pants. By offering healthier options, convenience-oriented food retailers are not just widening their appeal among women and younger people— all around the world, health-consciousness, choice and customisation are on the rise.

In the fast-casual space, some operators are seeking an edge by taking these trends even further. Oath Craft Pizza, a new U.S. fast-casual chain, strives to be much more than “the Chipotle of pizza,” as has been the goal for so many others in this particular category. With a brand rooted in an “oath” of quality and sustainability, Oath Craft Pizza offers high-quality ingredients, easy customisation and a 90-second cooking time. Thanks to the seriousness of its commitment, Oath Craft Pizza succeeds in conveying a greater sense of authenticity. And the pizza happens to be incredibly delicious.

Who would have thought that the likes of Oath Craft Pizza and Sweetgreen could ever represent competition for c-stores? In fact, they do. To remain competitive, the new foodvenience concepts must continually get better. In Boston, we recently helped Global Partners at its new Alltown Market modify the menu and up the ante on its ingredients. The goal was to offer more quality and customisation, precisely because of today’s competitive dynamics in convenience retailing.

Alltown also added touchscreen ordering, which highlights a potential competitive strategy for foodvenience concepts. The right technology, after all, can allow you to save on payroll costs even as you boost convenience. At the California concept Eatsa, people walk in and see no employees whatsoever—because the employees are literally behind the walls. The entire process, in fact, is automated, sort of like a 1950s-era automat. The four-store chain offers customisable bowls with names like “Yogurt Quinoa Parfait” or “Mediterranean Scramble,” along with fresh gourmet coffee and tea. You order and pay using a touchpad, then pick up your food at glass windows in the walls of the store. It is an easy and novel experience. In the years to come, count on evolving foodvenience retailers to tap tech solutions that boast similar advantages.

So what’s the formal definition of foodvenience? I’d say it’s any retail business that strives to give the public a highly convenient location; fast, efficient, takeout-ready foods at affordable prices; and a wide array of consumable products and services. Within this broad template, there’s plenty of room for creativity and growth. I can’t wait to see how foodvenience continues to evolve.

Joseph Bona is President of Franklin, Mass.-based MoseleyBona Retail, which specialises in elevating the convenience retail experience; info@moseleybonaretail.com

Source: Insight Global Convenience Store Focus

First Impressions

NACS, April 2016   |   by Pat Pape

When Rutter’s wanted to design a bigger, better version of its already successful convenience outlet, management sent Derek Gaskins, chief customer officer of the 62-store chain, to Las Vegas.

“They wanted me to see what leading edge retailers—and not just convenience store retailers—were doing with their stores and how they manage the contrast between day and night,” Gaskins said. “Las Vegas businesses look very different by day and by night by the way they use lights and motion to attract customers.”

That visit influenced the external design and lighting at Rutter’s two newest locations, one in Leola, Pennsylvania, and the other north of Gettysburg. “At night when the LEDs come on, they illuminate details you might not notice in the day,” he said.

Enhanced lighting is just one of several major transformations in new c-store design, and unlike in the past, the focus on lighting is less about security and more about enriching the customer’s store experience.

Lifestyle Design 

Once a 2,400-square-foot box positioned behind a few gas pumps, the convenience store of today is rapidly changing. Early formats were designed to sell fuel and move some snacks, beer and cigarettes. But thanks to the lifestyles of younger consumers and a revolution in the fast-food industry, today’s convenience stores must meet a wider range of new expectations from customers.

“It used to be about millennials, but we are at Gen Z already, the first generation that grew up with a smartphone in their hands,” said Michael Lawshe, president and CEO of Paragon Solutions, a retail design firm based in Fort Worth, Texas. “If you haven’t changed with it, you’re behind the times.”

What customers want today isn’t the same as even a few years ago. “Five years ago, there was a single entrance to every store and limited parking, but now parking is incredibly important,” Lawshe said. “Things are changing because customer preferences are changing. And to attract that next generation, the design of the store has to change.”

“Convenience stores became generic,” said Joe Bona, president of MoseleyBona Retail, a retail design firm in Franklin, Massachusetts. “You need to have something that people can identify with as being unique and different. You have to communicate and speak to people.”

Bona said c-stores have to think about QSRs and retail brands. “It’s not just the logo,” he said. “It’s the way they present themselves to the public. We’ve got to convince people that this is a place to buy food, and it starts with the exterior.” And once customers are inside, store layout becomes very important. “What is that first impression? You’ve made a promise on the outside to get them in the store, and now you must fulfill that promise,” Bona said.

Bigger, Better, More Parking 

Rutter’s newest stores in Gettysburg and Leola are 9,100 square feet and 7,200 square feet, respectively. The Gettysburg location is a hybrid, Gaskins said: “One part restaurant, one part convenience store and one part truck stop.”

Located right off U.S. 15, the store has a dedicated island for high-speed diesel and a separate store entrance for truckers, plus a 2,000-square-foot area with merchandise that truckers want and need when they’re on the road. A 40-seat restaurant features WiFi and a menu offers entrees such as crab cakes, beef ribs and dinner baskets.

“Seating used to be a big no-no,” Lawshe said. “Retailers didn’t want people to stick around because they didn’t have enough parking and they weren’t offering food. If you’re asking people to buy food, they want a place to sit. The competition has seats, so seating is very important now if you’re going to be in the foodservice business.”

With 50 employees ranging in age from 15 to 84, the store opened before Christmas and within days was one of Rutter’s top-performing locations. “We’re trying to meet the needs of multiple customer segments in an equitable manner,” Gaskins said. “We don’t want our convenience or restaurant customers to feel like they’re going into a truck stop or our truckers to feel like they’re going into some small c-store that doesn’t meet their needs.”

CST Brands owns 1,100 Corner Stores in the Southwest and 300 in Canada. The average store is about 2,800 square feet, but the company recently constructed five new locations in its headquarters city of San Antonio, Texas. Each is about 5,500 square feet, with more than 50 parking spaces for shoppers.

“The lot is bigger to accommodate the high fueling capacity of the site, as well as parking in front for the store customer,” said Hal Adams, president of retail operations, CST Brands. “Whether you’re a fuel customer or store customer, you don’t feel crowded or that you’re in somebody’s way.” All Corner Stores have outdoor seating, but the newest locations feature 20 in-store seats so customers can relax and enjoy the fresh-made food offerings.

In February, Kum & Go of Des Moines opened a 6,000-square-foot store in Johnston, Iowa. The new location is Kum & Go’s Marketplace concept and replaces an older store that was half the size and located on the same site. There are 22 parking spaces with room to add 11 more. “Our gas canopies have been very red, but this one incorporates some of the more natural materials used inside the store,” said Kristi Bell, communications director for Kum & Go. “It looks gorgeous at night.”

This is the chain’s first non-QSR location with indoor seats, plus a counter with eight stools and a charging strip so customers can plug in a laptop or recharge their cell phones. In addition, a covered outdoor patio has heaters in the ceiling and tables to accommodate 12 more diners. “If you have a made-to-order sandwich, you might not want to eat it in your car,” she said. “You might want a nice place to sit down.”

To embellish the store exterior, an 8-foot-tall sculpture shaped like the company’s signature ampersand features words and images that reflect the local area on one side. The opposite side displays the core values and culture of the chain. The unique artwork is a tribute to the company’s slogan, “Where & means more.”

“It’s a physical representation of our brand,” Bell said. “Between now and the end of 2016, we plan to build approximately 28 more Marketplace stores.”

More to Consider 

Bona believes that to be competitive with QSRs, convenience stores need to consider drive-thrus. “At many QSRs, 50% to 60% of sales come from drive-thrus,” he said. “Drive-thrus could be another tool that retailers may want to consider as they look for ways to be more convenient.”

“The fast feeders are reaching into our pockets,” Lawshe said. “McDonald’s and Sonic now sell bags of ice. Convenience stores should take the things we’re known for and start pushing [them] through the drive-thru.” It’s commonplace to see customers in cars checking their email while patiently waiting in line to order from a Starbucks drive-thru. “This next generation is very mobile, very social and willing to wait,” he said.

A decade ago you could build a 2,400-square-foot store with two pumps and put less than $400,000 into building it. “Now a typical store may be $150 a square foot for the building, and then you add your equipment, concrete and land costs,” he said. “Today stores are $2 million to $3 million. You better have multiple profit centers going in there.”

Both Bona and Lawshe believe technology will continue to enhance the shopping experience whether retailers offer touch-screen food ordering or a futuristic payment technology that requires minimal physical contact with the fuel pump.

“In the future, you may have a sticker on your license plate or window—like a toll-road pass—that will be able to communicate with the pump,” Bona said. “It will recognize you and your payment [for fuel] will be automatic. There will still be pumps with hoses, but technology will change the experience for most people.

“Convenience comes in all shapes and sizes and continues to drive our industry,” he added. “We serve people who need to eat several times a day and may shop two or three times a day. There are a lot of reasons for the store size getting bigger and changing in order to be as convenient as possible.”

Originally published in the April 2016 issue of NACS
 

 

6 Ways to Think Differently About Your Store

By Jennifer Bulat, Group Director of Editorial Production, CSP

DALLAS -- Forget the idea of making a better convenience store—just think about the store in a different way.

That’s how Joe Bona, co-founder and president of MoseleyBona Retail, began his session “Steal This Idea: Great Ideas from Retail and Restaurants” at CSP’s Convenience Retailing University.

Being better is not enough anymore, Bona said. You have to make your convenience stores a retail destination with an elevated experience. It has to be what he calls a CSR: convenience-store restaurant. It’s a blend of quick-service restaurant and c-store, nothing like old-time “g-stores” (gas stations/c-stores), he said.

Considering 43 cents of every dollar spent on food goes toward food away from home, Bona said, those dollars are waiting for the retailers who deliver restaurant-quality food and experiences, including custom-made beverages. And while most c-stores will probably never have seating for 100, “uncomfortable bar stools in the corner aren’t going to cut it,” Bona said.

To break down the process of thinking about the convenience store differently, Bona offered six steps to take:

  1. Don’t think like a c-store. If you’re making food in the store, create a work-flow process that decreases wait times and labor costs. For example, if it takes eight steps to make a certain breakfast sandwich, figure out a way to cut that process in half, Bona said. Make it easy for store employees to produce the food so the customer gets it quicker.
  2. Deliver better retail experiences and food appeal. Give people control over the menu with features such as touch-screen ordering. One concept that elevates the food experience comes from the Roche Bros. supermarket chain. Called Brothers Marketplace, it’s a 10,000-square-foot concept focused on perishables (www.brothers-marketplace.com). The store’s fresh food display in glass cases makes the proprietors “feel like real food professionals,” Bona said.
  3. Realize it’s all about customization and choice. “Empower customers to do what they want when they want,” he said. One Hy-Vee location has a fountain area with printed combinations near the spigots, with a header that says “Bring Out the Mixmaster in You!”
  4. Tap into the value of intellectual property. Hoagiefest is a big deal every year for Wawa. Of course 7-Eleven’s Slurpee is ubiquitous. Even SpeedPass was very successful for a while for Mobil.
  5. Consider adding a drive-thru. “If we want to compete more directly with fast casual and QSRs … you’ve got to be looking at how the fast feeders deliver their products to consumers,” Bona said.
  6. Create a 360-degree customer journey. How do you get customers off the street and onto your site? What’s the first thing the customer sees upon entering the store? Do something dramatic to give the customer something different from the perceptions of a ’70s convenience store.

Finally, Bona said, “Great design can’t save a bad idea.” What is it that you sell? How will you go to market? An offer alone won’t get you there. You need the staff, plus the right communication about your offer to the public. It’s a cross-functional effort, he said.

Originally published February 26, 2016 on CSPNet.com, CSP Daily News
Photo courtesy of W. Scott Mitchell