From private labeling to SNAP to getting to know your customers, the 2018 NACS show in Las Vegas is teaching retailers how to thrive.
The National Association of Convenience Stores kicked off the 2018 NACS Show Oct. 6 with a host of education sessions designed to inform convenience store owners and operators about the latest winds blowing across the U.S. retail landscape.
Kicking off one of the first sessions, George Hartnett, partner the Hudson-Leramo Beverage Group and moderator for Private Label 2.0, explained that more convenience retailers are innovating—from premium through budget private label—to meet shopper expectations.
A prime panelist who had an interesting success story to tell was Darrin Samaha, vice president and brand manager for BW Gas & Convenience, which does business as Yesway, headquartered in Des Moines, Iowa, Samaha has helped spearhead the retailer’s foray into private labeling, which has been a learning process, he acknowledges.
“You have to be realistic about your timeline,” for rolling out a private label, he said.
That timeline often covers a variety of considerations, from enlisting the right suppliers to developing a holistic marketing strategy. To make it first private label offering more straightforward, Yesway chose to go with a bottled water offering, which still turned out to be a complex venture.
Phase 1 of its private label initiative, Yesway in May 2018 launched Yesway Water. Available now in all Yesway stores, Yesway Water comes in spring, purified, and enhanced types in unique package designs in the following sizes – a 20-ounce bottle, a 700 ml enhanced water sport cap bottle, a 1 liter bottle, and a 24-pack of .5 liter bottles.
To provide the private label more momentum, Yesway partnered with Operation Homefront, a national nonprofit organization that works with military families. The chain donated five cents from the sale of every specially marked bottle of new Yesway-branded water, up to $25,000,
Brookwood Financial, a Massachusetts-based private equity investment firm specializing in acquiring and managing value-add commercial real estate and related businesses, launched Yesway with the acquisition of Country Stores, a 10-store portfolio in western Iowa, in December 2015. Now the convenience chain has grown—mainly through acquisition—to at least 150 sites.
Phase 2, which will begin rolling out soon, is a multi-category catalog that comprises private labeled salty snacks—including chips and nuts—loose bag non-chocolate candy and packaged bakery such as fried pies, donuts, muffins, Danish pastry and honey buns.
Samaha envisions a phase 3, where Yesway eventually features a premium position that might include meat snacks, chocolate candy and meat snacks.
He did emphasis that those type of selections are sensible rather than Yesway trying to introduce an energy drink, which is market dominated by a few big players like Monster.
SNAG UPDATE
Another session shed new light on the Supplemental Nutrition Assistance Program (SNAP), pertaining to new regulatory and legislative developments.
On Dec. 20, 2017, the U.S. Department of Agriculture (USDA) Food and Nutrition Service (FNS) issued national program guidance that gives SNAP state operators new flexibility to make their operations more efficient while improving customer service. This is good news for retailers, said Anna Ready, director of government relations at NACS, and Eva Rigamonti, an associate with the international law firm Steptoe & Johnson LLP.
Still, current regulatory requirements imposed on SNAP retailers and compliance pitfalls that loom large.
After protests from convenience retailers and input from the National Association of Convenience Stores (NACS), the FNS lessened eligibility requirements in the form of a final rule released Oct. 16 Among the changes the rule would require SNAP-authorized food retailers stock at least seven (up from three in years past) varieties of items in each of USDA’s four staple food categories—Meat, poultry or fish; bread or cereals; vegetables or fruits; and dairy products—to include one perishable item in three of those categories.
Another change in the final rule pertains to hot food service in c-stores and SNAP eligibility. Last year, the FNS had added in the proposed rule: retailers would be ineligible for the program if 15% of “total food sales” are items that are cooked or heated on site. The final rule changed this requirement, stating if 50% or more of a retailer’s total gross sales are of heated foods, that retailer is ineligible to be in the SNAP program.
Knowing the rules what constitutes heated food onsite is critical for retailers. This can extend to offering a simple sandwich where the bread is toasted by a store employee, making it a heated food offering.
“You run the risk of losing your SNAP license,” Rigamonti said.
To counter the risk, retailers can post signs explaining the SNAP policy or buy a Point of Sale (POS) system that can identify the correct SNAP items, Rigamonti said.
Know Your Competition
As the new senior vice president of merchandising and procurement for Yesway, industry veteran Derek Gaskins has plenty to share about customer service.
Gaskins earlier this year served as chief customer officer at Rutter’s. Gaskins spearheaded the VIP tier of the Rutter’s Rewards loyalty program in part to capture more information on consumer segments, buying behaviors, and category affinities. He said using such data to a retailer’s advantage only makes sense.
Gaskins headed an afternoon session, Know Your Competition… But Strategize for the Customer, explaining how to create a strategy based on what you do better than your competitors.
Prior to his tenure at Rutter’s, Gaskins served as senior vice president in marketing and merchandising with Mid-Atlantic Convenience Stores and as vice president of marketing with NACS.
Gaskins explained that c-stores must be intuitive when trying to meet customer expectations.
“You have to try to figure out where the consumer is going before he even knows,” Gaskins said.
In addition, c-stores can use social media, mobile devices and other means to effectively reach customers, he said. Other things retailers can do toward that end are define category roles, empower team members, partner with supply partners, and deliver compelling value through relevant offers.
