Challenges and opportunities at NACS Show in Las Vegas

Demand for convenience has never been stronger - a fact that presents both challenges and opportunities for convenience store retailers, according to Scott Hartman, outgoing chairman of the board of the National Association of Convenience Stores, as he addressed the opening session of the NACS Show 2006 in Las Vegas in October.
"Time is money, and time is really what we sell," he said. "But convenience is what virtually every other channel is now trying to replicate."
Hartman was referring to the fact that, as in the UK, traditional lines of retailing are blurring in the US. Drug stores market themselves as convenience stores; convenience stores have embraced new services to maximise one-stop shopping opportunities, such as foodservice, car care and banking; and larger retailers like hypermarkets are adding fuel retailing and convenience stores to their properties. The rate of hypermarket growth is also significant in the grocery channel.
"From the operating expertise that is evident in Asia, to the mastering of senses like food aroma and lighting at the retail level in France, to the sustained excellence of retailers in the US, I have seen new ways of doing business driven by changing consumer demands, and by technology," Hartman continued.
"Above all the fresh and healthy image is key to today's customer. All over the globe, the fresh presentation is the first thing customers see as they enter stores, especially in Europe."
He believes technology will play an ever-increasing role in c-stores - as it already is in Asia. "The cell phone you have today acts nothing like the ones they're using in Japan and Korea," he said. "Customers will receive offers on their phones, redeem electronic coupons with their phones, and web applications will allow them to find the lowest-priced products between them and their next destination - the in-car convenience store billboard is closer than you think."
Biggest battle
The biggest and toughest battle facing US c-store retailers is over credit card fees, says Sam Turner, NACS' incoming chairman. Turner compared the challenge to "walking up to King Kong and pulling a hair out of his chest". He revealed that last year the industry paid almost as much in credit card fees as it saw in profits, which he described as "absurd".
Rates average 2% compared with 0.7% in the UK. NACS is aggressively addressing the problem, having filed a lawsuit accusing Visa and MasterCard of price-fixing. A Senate investigation is also under way. In response, the card companies have not increased retailers' fees and plan to reveal their operating rules.
Another key message to retailers was the importance of global engagement - learning best practice
wherever they happen to be.

Global innovation


The supplier category of the Global Scholarship Competition was won by Australia, with an idea called M.O.T.H.E.R - Music on the Run - which focused on capturing the young consumer by providing a better way to download digital music. Canada won the retailer category, with a presentation called Piece Meals - a healthy, easy alternative to fast food. UK presentations were made by Lyana Doyle, trading manager of Musgrave Budgens Londis, on 'keeping hot spots hot'; and Victoria Burgess of Cadbury Trebor Bassett, on 'making convenience truly convenient'.

Teen spirit


As the industry's core customer retires, retailers need to develop a new generation of customers, Howard Stoeckel, the boss of major retailer Wawa, told attendees at a business session on marketing to teenagers. The company's research revealed that freshness and visibility for food and its preparation are paramount; customers love no-fee ATMS; males noticed dirtiness, while women noticed cleanliness. Teens love chewable ice, and although their cars and their rooms are awful, they're germophobic.

Convenience in Las Vegas


Las Vegas is said to have more convenience stores per square mile than any other place in the US - there are 990 in Nevada.
C-stores in Las Vegas do not rely heavily on tourists, but on the workers in the tourism industry who maintain the 24/7 city.
Because of tips, every day is payday for many workers who can shop on their way home, unlike other areas of the US where payday comes every two weeks.
The city's booming construction industry also provides a strong customer base.
Gaming is allowed in stores, adding a potential new profit centre for stores that must first go through a rigorous investigation before a gaming permit is offered.
While many of the casinos have convenience operations on their properties, workers visit c-stores for their lower-priced products and services.

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