“If you are going to build a time machine why not do it with some style”
As part of a client engagement I have been researching the Australian Petrol & Convenience (P&C) channel.
In particular I have been looking at reports and articles published approximately 5 years ago, at a time when much of the planet breathed a deep sigh of relief as fears of global financial apocalypse abated.
The P&C channel in Australia was negatively impacted by the global financial crisis (GFC) but it managed to get through it all relatively unscathed compared to the pain being felt by other retail channels.
As we emerged from the GFC a new wave of optimism surfaced with markets well and truly leaving behind the uncertainty and austerity of the GFC period.
Well thats what many of the the reports and articles spoke of at the time. In reality since that time uncertainty not only remained, it got worse. P&C store operators and the retail industry in general faced a backdrop of deep political uncertainty, fast emerging and powerful online competitors, international competitive entrants to the market, a revolution in insight driven customer understanding, once core categories floundering, franchisee engagement challenges and margin pressures in a low inflationary market.
Looking back 5 years ago riding a wave of positive market sentiment and economic optimism the P&C channel was very well positioned to flourish. To do so it had to ensure thats its basic day to day execution was delivered well and its growth would be driven by:
- Innovation in the overall store offer with fine tuning and constant vigilance to stay relevant to a better informed and more demanding consumer.
- Improvements and efficiency in customer conversion with improved in store environments, theatre, merchandising, promotional tie in and enlivenment.
- Growing the food on the go offer and overcoming historical perceptions with vastly improved quality, variety and value.
- The capture and use of individual store level data and insights to generate efficient and effective decision making relating to range, pricing, promotional effectiveness and customer engagement.
Jump forward to the present day and the P&C channel faces unprecedented competitive, technological, administrative and operational challenges. The optimism of 5 years ago has been replaced with concerns about profitability, cost control and a rapidly changing retail landscape with seemingly every retail channel cannibalising the once exclusive 24/7 P&C domain.
So what can the P&C retailers learn from the past? What does looking back help us to understand about the future?
Certainly doing nothing very different is not an option, the GFC sorted those retailers out in other parts of the world and we see this momentum continuing today.
Looking back to the future Australian P&C retailers must look at where growth was projected to come from post the GFC. These drivers of growth are no less relevant and important today.
It must re-ignite its passion as the retail channel of innovation and excitement. It must be bold and passionate about delivering true points of difference in the customer retail experience. It must be a leader in food and be bold if its serious about changing customer perceptions to truly win hearts and minds. It must leverage its significant customer reach and category breadth into business building relevant insights that allow it to dominate the convenience shopping experience and not allow other channels to infiltrate at will.
There are of course great examples of Australian convenience retailers addressing some of these challenges with some world class retail outcomes. But its inconsistent and the depth of application is often questionable with short sighted and quick win opportunities being adopted rather than more profitable longer term sustainable and customer engaging outcomes.
In the classic Back To The Future movie Marty questions Doc on the sense of building a time machine out of DeLorean sports car. Doc replies “The way I see it, if you’re going to build a time machine into a car, why not do it with some style”
Lets take the guidance of Doc and if we are to build a world class convenience channel, do it with some style.
David Ginsberg is the founder and Managing Director of Retail Growth Concepts, a boutique management consultancy that aims to inspire retailers and their supplier partners to reach thier full potential. David has extensive experience working within the Petrol & Convenience channel having held senior operational and marketing roles in 7-Eleven Hong Kong & Macau, 7-Eleven Australia, Shell Asia Pacific & Middle East & BP Australia. David can be contacted on [email protected]