Roy is the President of CMSI and has been heavily involved in the fuel and convenience industry having served on the membership committee, convention committee, board of directors and the executive board of the National Association of Convenience Stores (NACS), the legislative committee of the Society of Independent Gasoline Marketers of America (SIGMA), and participating in The Coca-Cola Research Committee, The Consumer Goods Forum (formerly CIES), and the National Association of Real Estate Investment Trusts (NAREIT).Additionally, Roy has had the opportunity to address dozens of conferences on six continents as an expert in convenience retailing and the retail industry. Roy has also participated on, or moderated, many expert panels of industry leaders helping to identify new consumer and retail trends.
As we’ve expanded our operations over the last few months (we are currently operating sites in 9 states), I’ve been reminded how consistent training is so important to a successful operation and an engaged team. It’s a topic that I keep coming back to on a regular basis – as you can see from my previous postings – and I believe that it is the cornerstone of what we are doing.
A fully implemented training program allows store personnel to feel confident in their job performance, provide a higher level of customer service, and reduces staff turnover. When someone feels that they know what they are doing they are more adept at providing innovative solutions to problems and issues that arise on an occasional or a regular basis. More importantly, the solutions are usually within the framework of what we are trying to accomplish as a team rather than being a one-off solution.
Our goal at CMSI is to have a highly trained staff that is competent in day to day operations and are equipped to handle new situations. In a perfect world, a team member can be transferred from one store to another and easily feel at home. The routines and procedures are the same at both places allowing them to be effective immediately and reducing the transition and retraining time. Greater flexibility also means more opportunities for our team members as we add and lose stores over time. They can move from a store that is going away to one that we’ve just taken over. CMSI wins as we get to keep our best folks. The client wins because we have a trained and dedicated staff immediately available. The employee wins as we can provide further job opportunities.
Everything begins with putting a coherent program in place. Training should reflect the work as it is – not as it might be hoped. Providing the training equivalent of a Phillips screwdriver isn’t helpful when the world is full of flat head screws. When someone has to break training to deal with an issue it creates an anxiety about breaking the rules and opens the door to additional changes and modifications.
At CMSI we have developed a training program over the last thirty years that has been codified in our training manuals and materials. We update the content regularly to reflect changes in laws, technology, and retail practices. We have a systemic program of tracking and evaluating team members as they go through their training making sure that everyone has completed all of the component.
To do this we have a dedicated training staff that is responsible for the training content and delivering in the field. There is a direct responsibility to make sure that our fellow employees receive the training that they need. Refresher courses and evaluations are conducted over time to make sure that everyone stays up to date with the latest developments.
I would like to thank our trainers and training managers who help us be the best operating company we can be. Without their dedication, we would not be a successful as we are.
Everyone knows that theft is a major issue in the convenience store industry. The general public hears about robberies in the media all of the time. Convenience stores are caricatured as easy places to rob. Many of our stores are open 24 hours a day giving people with bad intent places to go late at night like moths to a light bulb.
To an extent, this perception creates a self-fulfilling prophecy: c-stores are robbed because we think c-stores are robbed. The cycle starts and then continues, spiraling ever downwards.
This is the public perception. The truth, though, is very different. There are actually very few convenience store robberies and, on a per event basis, the largest number of thefts is of items from the store and not money.
NACS has long been the leader in theft prevention and has a very good toolbox of robbery prevention items, literature, and education. I highly recommend it.
The CMSI golden rule is that if a robbery is occurring – it doesn’t matter if it is shoplifting or a robbery – our team members are not to confront the perpetrator and is to comply with whatever is asked of them. As we constantly tell out team: we can replace product and money but we can’t replace them.
What I want to focus on is the greatest theft prevention device that we have –customer service. By greeting and acknowledging each of our customers as they enter the store our staff are showing the customer that they are an individual and not some anonymous person going unnoticed in the store. By saying hello, our staff takes away the cloak of invisibility that criminals need to have. With that “hello”, there is usually eye contact. Sometimes there is even a response. Once that happens, the chances of a robbery taking place decline greatly.
As an example, let me tell you about a store that we recently took over. The site is in a rough part of town. The previous operator told us that they only kept the door open for a few hours every day because people would come in and walk out with items without paying for them.
Having visited the site prior to our taking it over, I noticed that the cashier didn’t acknowledge me when I entered the store, didn’t try to establish eye contact, and didn’t really even care that I was in the store. I felt like I didn’t exist.
When we first opened the doors we had problems with people from the neighborhood just walking in and taking what they wanted. We didn’t want to close the doors and lose what sales we did have.
In talking with our team we came up with a strategy of showering our customers with attention. Our staff started being louder in welcoming customers into the shop. Our managers emphasized being on the sales floor fronting shelves rather than being in the office or behind the register. (By the way, fronting shelves is also an excellent passive theft deterrent. When an item is removed the gap in the shelf is very evident.)
Over the next week our inventory loss went down substantially. There were “customers” who didn’t come back to the store but we also had customers that we had suspected of taking a five finger discount who came back and became good customers.
As they say, you get more done with honey than vinegar.
There is not a more analog job than driving a long haul truck. In this profession, everything is rooted in the real world. The trucks, trailers, and cargo exist. They are tangible. And they go from one place to another in real time through real space in the real world.
This week I am attending the DAS Travel Center Show as an invited guest. Visiting the expo and talking to the attendees reinforces how complicated it is to move something from one place to another. The professionals who drive transports for a living have a set of needs and requirements that differ greatly from the average motorist on our roads. The travel center industry has developed and evolved to meet those needs. We all know about the amenities that you can find at your average truck stop: showers, cafes, lounges, and laundries in addition to fuel.
CMSI operates, and has a history of operating, truck stops around the country. Meeting the daily demands of the folk who spend their life on the road requires us to be the best site operator that we can be and, fortunately, our team always rises to the challenge.
This week’s expo reminded me of how even this most analog of industries has a digital component. As store operators, we are always searching for the items that our customers want and need. Surprisingly, the percentage of our SKUs dedicated to trucker related digital items continues to grow.
Of course, truckers are like everyone else – they have cell phones and computers-and we are stocking items to meet those realities. Phone chargers, connectors, cables, holders, dashboard mounts, cases, and hands free equipment multiply on our shelves. There is a whole universe of electrical products out there: in-cabin TV, DISH satellite dishes for the top of the cab, wireless speakers, crock pots, refrigerators, and coolers. I even saw an electric frying pan and an oven that can be used to cook food in the truck cabin. (As a side note, where would we be as a civilization if the 12v cigarette plug had not been invented? It’s probably the most important thing to come out of the use of tobacco.)
My point is that just because we see a customer segment one way (trucking is old technology) doesn’t mean that the customer hasn’t evolved and developed like other segments (a trucker is as much of a digital native as someone who works in the tech industry). As retailers, we have to predict their needs and determine how we are going to meet them.
A few weeks ago I attended the NACS Leadership Assembly in Miami (which I highly recommend, by the way, if you can get an invitation). One of the objectives of the LA is to look over the horizon to see threats to the c-store business of the future.
The main topics of this year’s session dealt with the Internet and the new businesses that it is enabling – online shopping, next day or same day delivery, and grocery ordering. Admittedly, the Internet is allowing people to have faster access to a wider array of goods and services. You can buy almost anything online today and have it delivered tomorrow – or even this afternoon. There is no doubt that retailing has been forever changed.
My contention, though, is that online shopping is a red herring as far as the convenience industry goes. I don’t think that it will have a significant or long-term impact on our section of the industry.
Almost by its very nature, online shopping appeals to people who plan and think ahead or have mobility issues (either through a disability or lack of transportation alternatives or a babysitter). They realize what they need, figure out where to find it, take the time to order it (usually in conjunction with must have items such as household staples or one-off items or gifts), and plan for its delivery time and place. Those who think ahead get the most out of the online experience.
Alternatively, the core convenience store shopper is driven by typically by two things – the need for gasoline products and impulse/immediate gratification motivation.
The fuel customer component is pretty obvious. Aside from a few very limited attempts to do at home refueling (which is still illegal in most jurisdictions due to fire safety issues), being able to order gasoline online is still pretty far off in the future. For the overwhelming majority of fuel customers, the only place to buy gasoline will be at a real world gas station. The advent of the all electric car may be a cause for concern but we are at least a decade away from there being a sufficient number of cars to have a measurable impact.
On the other hand, the impulse/immediate gratification customer is on the move and wants their item of desire NOW! There is no time for ordering online and sorting out the delivery issues. It may be that they are driving and can’t operate their phone while they drive so they can’t order. If they are walking they don’t want to wait until they get to their destination to pick up their delivery. The best solution is to just pop into the local convenience store and pick up what they want.
The real casualty of online shopping will be the traditional grocery store. Consumers will want to save time and money by ordering their weekly grocery store order online and having it delivered to their homes. It will save them money (lower prices and transportation costs) and time (transportation and shopping at the store). It also will eliminate the need to carry the groceries to the car and into the house or walk your shopping bags home from the store. The larger average grocery shopping trip is much more suitable for disruption than the stop by the local c-store.
As long as humans have immediate gratification needs and act on impulse, the convenience store has a re
My apologies for my absence from the site over the last few months.
2015 was a very busy year for us. We expanded our business by including more sites into our program through handling several “distressed” sites during foreclosures and receiverships and by adding more long-term sites with owners who want to own and control the retail business but don’t want the hassle and headaches of operating it.
We’ve brought on new staff, have updated many of our policies and procedures related to site operations, and have expanded the amount of information that we are able to provide to our clients. The overall result is that our program is even more robust and transparent than it was in the past.
In addition, we’ve been working on a new software project which we hope to be unveiling later in the year. The program is based upon work that we already do internally at CMSI and that we want to make available to the small format retail industry. It has been a huge benefit to us and we think that it will provide a lot of benefit through cost reduction, time efficiency, and better control of your business. Stay tuned for more details!
On top of all of that, I’ve was on the road a lot visiting clients, inspecting sites, and attending industry functions to keep us at the leading edge of the best industry standards and practices. Most importantly, I’ve had the chance to spend time with our team members and colleagues in the field to get their feedback on how we are doing and to gather their ideas on what we can do to make our company more responsive to our employees and more effective for our clients.
All in all, everything we’ve done over the last year has helped us continue to build a better CMSI.
I’m looking forward to getting back to putting up some posts sharing my thoughts and comments on the industry, presenting new ideas and products, and providing a bit of insight into the world of small format retail operations. Although I’m still going to be on the road quite a bit, I’m hoping to be more disciplined in posting from the road.
Thanks for taking the time to visit our site and be sure to let me know what comments and questions you might have.
Over the last few posts we’ve been exploring the idea of being competitive in today’s retail market. One of the ways be being competitive is to create or introduce new products and services to help your customers. So the question became – where do we get the ideas we need to stay competitive? I’ve suggested that there are three groups that as stakeholders we need to listen to so that we understand the market and our customer’s needs. The first is the customer herself and the second group is our store staff.
Probably the most unlikely group that we need to listen to is our competitors. For most retailers, the rival companies vying for the same customer is the last entity that they want to enter into a dialogue with.
Don’t worry. That is not necessarily what I’m suggesting.
I think that there are two ways that we can learn from our competition. The first is by observing what they are doing and how they are doing it. We often talk about “knowing” our competition in the market. But do we really know them?
The best way to understand the competition is to shop with them. You need to wander the aisles, see the products, and interact with their staff. By doing these things, you can listen for the competitive heartbeat of the store. What is working for them? What isn’t working? Where are the gaps and vulnerabilities in their offer that can be exploited in your market?
Everything that you can glean from visiting the store can be used in your own business. Copy and improve the ideas that work and figure out what doesn’t work and why and apply those lessons to your own stores.
The second way of listening to your competition is to talk to retailers who would be your competition except for the fact that they are located in another market. The best way to do this is to join your state or national industry associations (for the convenience store industry it is NACS). The networking and idea sharing that is available to you at these events is worth far more than the cost of membership.
An additional bonus is if you can visit a “competitor’s” store in a different market. I always find it fascinating how convenience is defined in other markets. The product and service offerings are sometimes radically different from what we do in our home market. Or it may be the same products and services but offered in a different way or in a unique context. Of course, some ideas don’t always translate well (selling road salt in Texas comes to mind) but every observation can be the catalyst for a new idea or an incremental improvement to an existing one.
So, in summary – to be a viable business in today’s world your business must be constantly moving forward. Remember: Compete is a verb. And the best way to stay competitive is to listen to your customers, your staff, and your competition.
If you are not moving forward you are falling behind.
We are in the middle of a set of posts that talk about how listening can help a retailer stay competitive in today’s market place. I think that there are three distinct groups that we need to listen to. The first is the customer. We need to try to learn what they want from us.
The second group is our employees. The input from this group is often overlooked when a company is putting together a marketing plan. Traditionally, most merchandising and marketing decisions are made from the top down. This actually makes a lot of sense as the folks in the “head office” usually have a good overview of the industry, have been informed by suppliers of new products that are going to be introduced, and review the category and item sales data that is generated at the store level.
But your employees are the folks who are closest to your customers. They are the ones who hear the questions like “do you have…” and “you know what would be a good idea?” They see what customers buy, when they buy it, and what they have in their shopping bag. The staff who are really good know their customers by name, know something about their background, and can anticipate what they are going to buy when they walk through the door.
And, most importantly, the staff often live in the same area as your customer. They know what is going on in the neighborhood, what the new trends are, and the nuances of the ethnic differences in products and their promotion.
It almost like having a spy in the consumer’s camp.
But how do we get that information from the sales counter to the marketing office? My first suggestion is that the marketing personnel need to be out in the stores on a very regular basis not only to look at what is selling and what is not selling but to spend time with the store staff to get ideas and insights as to what is really happening at the store. One on one casual conversations can go a long way to getting an insight into the local market.
A second suggestion is having frequent focus group meetings with staff with an agenda item of discussing new products and opportunities. This is a more formalized system of getting feedback from the stores and should be consistently implemented and acted upon.
(This is also a great way to get feedback about what is not working at the store. The staff, especially the store mangers should be able to tell you why various programs didn’t work, what items don’t sell, what job tasks are the most irritating, etc. At first, it is a painful experience but, if it is consistently done and problems are solved then it becomes very positive and collaborative.)
The final idea is some type of suggestion box or similar system. New ideas and product suggestions can be submitted online and reviewed by the marketing department. Contests can be held to reward staff for the best or most valuable idea. I don’t think that this method is as good as personal interaction but it can act as a supplement to the first two methods.
The one overriding rule in regards to all three methods is that if you gather feedback you need to do something with it. Asking for ideas but not visibly acting upon them kills the motivation to participate. The staff ask “why should I make the effort when they are not going to listen to me?” There doesn’t even have to be a financial gain to the staff for making the recommendation. Usually, just the acknowledgement that someone listened and acted is rewarding in itself. People want to have an impact.
During this cycle of posts I’ve been writing about the need to stay competitive to survive in the retail world. In the last post I started on the need to listen to a specific group of constituents - customers, employees, and competitors – to determine what you need to do to stay competitive. We’ve started on listening to customers and I’ve posited that there are two ways to do this. The first was asking them what they want and listening to the answer.
The second method to determine what your customer wants is to listen to what they are actually buying. Surprisingly, customers don’t always buy what they say they are going into the store to buy. There are a couple of reasons for this. The first is that customers will tell you what they think that you want to hear. That, obviously, doesn’t do us any good in trying to meet their needs. We need to know what they really want. The second reason is that buying decisions are heavily influence at the moment of selection by various factors – promotions, color, flavor offering, and other impulse reactions. Therefore, the bag of things that the customer leaves the store with is very different from the mental shopping list that they went into the store with (as a side note – people are much more likely to buy what they thought they were going to buy when working from a printed shopping list rather than a mental one. You may want to keep this in mind the next time you go to the grocery store and find yourself impulsively staring at the ice cream freezer door.).
The best observation tool is to see what the customer actually bought. You can do this through customer intercepts after the purchase or by reviewing sales transaction information if you scan sales at the register. By looking at the actual purchase you can see what items the customers want and what they combine the purchases with. For example, a purchase of milk and chocolate sauce might present an opportunity for chocolate milk. Purchases of fruit or vegetables could lead to a wider selection of those types of products. Selling high-end craft beers? Maybe you should look at putting in a growler station (draft beer).
The purchase basket can give you an insight into demographics such as economics, ethnic, and cultural trends. However, the key is that you act upon the information that you glean. Once you have found some opportunities you need to come up with a trial promotion. Source the product you need, get the best value product that you can, and put it into an introductory promotion.
And just putting the product on the shelf is not enough. You need to publicize it with signage. Plus sell it at the register. Offer coupons. You can even try a sampling program to introduce it to your customers. After all, who can resist a free sample?
Finally, you need to track the sales information to see if there is truly an opportunity. Did the product sell? Does it look like it cannibalized the sale of another product in the category? Did it add enough new sales dollars to make it a permanent part of your offer? If it did – great! Add it in. If it didn’t – no worries. See if you can figure out why it wasn’t successful and what changes you would need to tweak to make it successful.
In either case, start the experiment over so that you are constantly looking for the next thing.
In my last post I wrote about how “compete is a verb” is one of my favorite business sayings. The bottom line is that if you are not competing every day your business is going to be left behind.
So how do we find out what we need to do to stay competitive? My answer is that we need to listen to three groups – our customers, our employees, and our competition.
Our customers will tell us what they want. Strangely enough, they won’t always be able to tell you what they want when you ask them. Don’t get me wrong, asking customers questions is important and can be done through surveys, interviews, and suggestion forums. But if you ask someone “What do you want us to do for you?” the chances are that you won’t get a valid answer because the customer doesn’t know what you are able to do for them. In most cases, it is like asking someone who has never had a pizza to describe one to you.
I think that there are two good ways of finding out what customers want. The first way is to offer them options to consider. For example, you observe that the customer has bought a widget. You ask “what do you think is the better idea? Widget plus X or widget plus Y? What else would you add to the widget?”
By positioning the question in this manner you provide a context for the customer to create and visualize alternatives. This is a much better approach to getting useful information than asking open-ended questions. The customer can evaluate the options in front of him and then extrapolate options.
Something that I would always recommend is to have determined the retail price of the widget plus X or Y before you start the interview process so you can ask the customer whether they would pay that kind of money for the product. There are a lot of things people think are cool and would like to have but would not be willing to pay what it costs to obtain it. It doesn’t do you, or the customer, any good to develop and carry a product that no one is willing to pay money for.
The downside to this approach is that it usually focuses only on incremental changes. You are taking a basic product and adding a component or tweaking a feature to create something that is gradually transformed. This methodology won’t help you to introduce products that are a completely new innovative. The best example of this that I can think of is the Apple iPad. The customer said that they didn’t see a need for another personal computing device that was bigger than a phone and less functional than a laptop computer. That was over 200 million iPads ago.
Having said that, incremental improvements to product and service offerings tend to be a better way to go. The risks are not as high as with a transformative product launch (think: adding a day spa to a c-store) whereas incremental changes can generate an ongoing cycle of promotions and excitement in a store (think: new coffee combo offerings). A cycle of offerings keeps the store’s offer fresh and customers coming back to see what is new.
Next post I’ll discuss the second type of customer listening.