Phillips 66 Continues to Drive Retail Innovation

Phillips 66 Sign DayThe Houston-based energy company is piloting several test programs and rolling out new images to help its branded marketers boost sales and attract new business.

By John Lofstock, Editor

Phillips 66, which supplies more than 7,100 outlets under the Phillips 66, 76 and Conoco brands, continues to innovate. Through a strategic program called Experience 66, Phillips 66 is piloting several test concepts aimed at driving sales for its branded marketers, as well as introducing the new Phillips 66 Shield image and 76 Wave image at select locations.

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“Experience 66 leverages the three brands in our portfolio—Phillips 66, 76 and Conoco—each with a unique strategy and offerings,” said Jack Whalen, brand value manager for Phillips 66 Marketing.

Select Phillips 66 and 76 locations will receive a new image and test concepts during a pilot underway during 2014. “While we are currently focused on Phillips 66 and 76, Conoco is an important part of our portfolio of brands and we will maintain its commitment to being a strong, traditional brand with same competitive offering available today,” Whalen said.

Unveiling New Images
“On the Phillips 66 Shield image, we’ve left the classic shield logo in place,” Whalen explained. “But we’ve quite literally broken out of the box in our logo layout. In our new image, the top of the shield will extend up and over the canopy. On the main ID sign, you’ll see the top of the shield extending up above the rest of the sign, whereas in the past our image was within a box.”

The new 76 Wave image will return the brand to the legacy color palette, orange and blue, with a nod to the heritage 76 ball. Rooted in West Coast culture, the image features a bright LED wave rolling across the canopy. “We believe that this new image captures the essence of the iconic brand,” Whalen said.

Phillips 66 is brightening up both images. All of the stations will have LED lamps under their canopies and main ID signs, as well as internally illuminated valences above the dispensers.

Phillips 66 has 210 locations in the pilot program. By the end of fourth quarter 2014, 130 reimaged stores will be in the marketplace with a concentration in Los Angeles, Seattle and St. Louis. The balance of the pilot sites will be converted in the early part of 2015. Next year, Phillips 66 will begin offering the new images to additional locations.

Testing Signature Offerings
In addition to rolling out new images at select locations, Phillips 66 is testing signature offerings designed to help branded marketers remain competitive long-term. “We think of signature offerings as unique items that consumers will come to associate and anticipate at our branded locations,” Whalen said.

“We have five signature offerings that we are going to test in several different combinations throughout the pilot stores,” Whalen said. “Some stores will only get a new image and some will get one or two elements, others will get the image and all five elements. All are focused on what consumers told us was important to them in our research.”

• Fuel Island Vending: One test involves targeting busy fuel customers that may not want to run into the convenience store. Phillips 66 is piloting a program with Vendgogh, a provider of gas-island vending solutions to test beverage vending machines. Stores can choose which beverages they want to offer based on consumer demand.
• JambaGO: As healthy food choices become more important to the consumer, Phillips 66 is testing self-service smoothie machines, which dispense real fruit smoothies from Jamba Juice.
• Free Air: “About 90% of consumers surveyed said that free air was important to them,” Whalen said, “so we are testing the impact a free air offering will have for our customers.”
• Fast-Flow Pumps: Another innovation will be fast-flow pumps, which will include changing filters and submersibles in existing pumps to ensure gas goes into cars at the fastest speed allowed in the industry. Research showed that 77% of consumers interviewed said dispenser speed was important to them.
• Touchless Restrooms: The final offering to be tested is touchless fixtures and amenities throughout the restrooms, including faucets, hand dryers, soap dispensers, commodes, urinals and door access, for which foot or elbow plates will be provided.

“We are seeing the investment in the whole restroom just erupting industry-wide,” Whalen said. “Customers are literally starting to make stores a destination based on their restroom and know which ones have the good restrooms and which ones do not.”
The effect on sales driven by each of the innovative steps will be carefully evaluated.

“We are going to track what improves the performance of the site,” Whalen said. “If it produces an economic return for the customer, we will introduce it to the rest of the stores that qualify. If it doesn’t, no harm, no foul; we’ll come back and take the equipment out if they want us to, and we’ll move on down the line with something that does work for consumers.”

“We are studying the gasoline sales, inside sales and consumer feedback of the pilot stores,” Whalen said. “We’ll see which of the signature offerings drive consumer preference or increased purchase.” The Experience 66 elements that resonate with consumers will be rolled out to the rest of the network along with the new images.

“We believe that we have designed a pilot that, if successful, can be successful anywhere in the country,” Whalen said. “We think we’ve taken out the regional bias of a particular item, so we would look to introduce it throughout the country at the stores that qualify. Most importantly, we are developing a process for testing and learning quickly so we can continue to bring new and innovative things to our customers and their sites.”

Continued Commitment to Retail
These steps are only the latest in Phillip 66’s strategy of aggressively attacking the marketplace with forward-looking programs designed to build sales and market share.

In addition to committing to a comprehensive rewards program with KickBack Points, the company over the last several months has put a number of such initiatives into place. Among them:
• a new sponsorship with IMG Gonzaga where its signature KickBack Points cardholders will have new ways to earn loyalty points;
• launch of Brand Image Central, a program that lets customers shop for all image-related branding products through an easy-to-use Web portal; and
• the first Phillips 66 mobile app for the company’s fuels customers. The app allows customers to view fuel pricing information while on the go.

The company also signed a multi-year agreement with Synchrony Financial, previously GE Capital Retail Bank, to provide new private-label credit card programs for consumer and commercial customers nationwide.

“We are excited about trying new things to better respond to changing consumer expectations,” Whalen said. “We are building an innovative culture that we believe will allow us to continue to bring powerful new offerings to the market.”