Readying for Transportation Trends

Whether it’s horse-drawn wagons, gasoline-powered cars or electrical vehicles, there’s opportunity for convenience retailers to become part of the transportation movement trending at the time.

By Mark Radosevich

While driving through a small town near my office in Tennessee recently, I was surprised to see an Amish horse and wagon tied to a hitching post outside a local dollar store. On the way back, I pulled in to investigate some.

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The manager explained that they were experiencing a growing level of Amish customers and wanted to make it easier for them to stop and shop. Thus, they installed the hitching post to accommodate these new customer requirements. I stifled the urge to ask her if there’s an approved hitching post vendor list or if the installation process is now part of the chain’s official operations manual.

It did strike me that a national chain store was willing to accommodate a horse-drawn mode of transportation.

Last year, I wrote about the growth of the dollar store industry and the potential negative impact to the c-store business. Seeing the wagon and the accommodation that the store offered those customers got me thinking about the commonality of horse-drawn wagons and gasoline and electric cars. The answer is simple. They all have four wheels and are modes of transportation. All three are designed to move us from A to B and the fact that an electric car and a gasoline car look the same doesn’t make them the same.

HORSE POWERED
This fact has been lost on many of us in the retail petroleum business, as electric cars have as much an affinity for petroleum as horses and their wagons do. Yet many in our industry still delude themselves in thinking that as the electric vehicle industry expands, recharging said vehicles will naturally migrate to retail petroleum facilities.

Using the hitching post as an example, the dollar store was able to naturally accommodate a customer need as it arose. What’s to stop them, or another retail business with wide coverage to adjust their focus to accommodate the recharge needs of the electric motoring public?

As an aside, the words “motoring” or “motorist” actually better fit an electric vehicle, as it’s powered by a motor and not a combustion engine. Historically, the petroleum industry should have been referring to its customers as “engine-ists” to better align with a gas vehicle’s means of propulsion. Doesn’t seem to flow as well though, but I digress.

Ignore for a moment the current demographic differences between electric car owners and dollar store customers, and simply focus on the big picture. Capturing this growing market segment seems much easier for retail businesses that are not burdened by the baggage associated with c-stores in terms of underground storage tanks, fuel dispensers, piping and the related environmental and regulatory considerations.

REDDY OR NOT
Companies that have not taken the leap to fossil fuels like dollar stores, quick-service restaurants or maybe a new retail incarnation that I just came up with five minutes ago, the Redi-Watt Chargestop. This concept shouldn’t be confused with that little electric guy from the 1930’s, Reddy Kilowatt. He’s an old cartoon character and not a fast growing, potentially profitable electric charging business.

The infrastructure required to set up recharge centers is diverse and much less expensive than that of the oil business, and it is a fallacy to assume that the c-store industry can turn on a dime and capture this market when critical car-count mass is achieved. Many current retail sites will be constrained by facility layout, property size and other limitations.

For interested c-store operators, the first step is to conduct a comprehensive investigation to determine if this is a business worth getting into, and if so, where dollars should be invested using the 80/20 rule (80% of all electric vehicles will recharge at 20% of currently available sites).

I don’t believe that electric vehicles will overtake the combustion engine in our lifetime or that the traditional convenience store industry is going to be seriously challenged. I do believe that electric vehicles are here to stay—vehicle counts will grow and demographic adoption will diversify.

If traditional convenience store operators want to capture a significant share of the future recharge market, serious long term planning needs to take place including probable growth patterns (urban and suburban in the beginning), new facility designs, existing facility modeling to determine optimal candidates for retrofits, and a budgetary commitment to produce meaningful and sufficient scale.

Late last year, Ikea department stores had committed to installing charging centers at 355 stores in 30 markets. This is just a drop in the bucket, but is a clear indication that other non-petroleum retailers are beginning to grasp the seemingly untapped potential of shifting transportation trends. It probably won’t be long until larger non-petroleum regional or national chains leverage their coverage and strive to become recharge destinations of choice.

This is clearly a business model in flux where the exact retail solution is yet to be determined. But if the local dollar store is any indication, feel free to give me a call if you wish to license my Redi-Watt Chargestop concept or order a Made-in-America, Wild West Hitching Post kit.