While You Were Sleeping...

While You Were Sleeping...

Published in CSP Magazine October 2012

If you are a lawyer, at some point you probably get used to the hundreds of jokes out there about the legal profession. (How many lawyers does it take to change a light bulb? How many can you afford?)

Or if you are a banker today, you are increasingly keen to the sharp-tongued and mean-spirited jokes people now have about the banking industry. (Why don’t sharks attack bankers? Professional courtesy.)

Convenience stores, deservedly or not, also suffer certain stereotypes that are long-held truths, such as stale coffee. (Where do construction workers go if they run out of mortar? A c-store for coffee.)

What makes these jokes so funny? Well, certainly there may be a little bit of truth and retaliation in the jokes. They are one way to put some of these guys in their place and maybe knock them off their pedestals.

But the other side of the joke is that most of us have formed a deep impression about these professions or places and their predictable patterns of behavior—stereotypes that admittedly are hard to shake. Well, I am an architect. And yes, I am aware of a few stereotypes my profession has garnered. Fortunately, we are generally not hated by the public. But people do sometimes think of us as effervescent characters who drive pink Mercedes while wearing funky watches, basket weave shoes, bow ties and perhaps even a cape. (Get out of the way—an architect is coming!)

But after working in the design field for more than 25 years, I have to admit that some of the architect jokes are probably well deserved. Many of my design colleagues are less concerned about the bottom line than about straight lines. And we are sometimes rightly perceived as a bit lofty, esoteric, unrealistic and “out there.” Because of these perceptions, designers are generally not taken as seriously in the business world as they should. That’s unfortunate because, in my experience, one valuable thing architects can contribute is reading the tea leaves of society. Architects tend to see what’s going on in society and anticipate trends long before most people do, mostly because they have trained their eyes to observe and imagine things that most people don’t.

While this skill of reading society is valuable, designers admittedly run the risk of sometimes being too far ahead of the curve for the business world. Conversely, retailers are often too far behind the times and entrenched in their well-worn formulas. Many retailers out there lack the right apparatus, antennae, cultural curiosity and observational systems necessary to sense the subtle yet pivotal movements of society. They often overlook, dismiss or just plain miss the critical signs that point to where things are headed.

Grocery Stores and Change

I have spent my entire design career working in retail, particularly food retail. Some of my oldest clients have been the major regional grocery chains throughout the United States.

I remember distinctly back in the 1990s when my grocery store clients were all dismissing, and in some cases even laughing about, newfangled concepts such as Whole Foods Market, Trader Joe’s, Costco and yes, if you can believe it, Walmart. Even though their focus group reports kept coming back with repeated mentions about the interest and appeal of these stores, my clients would often tell me—with the confidence of a reigning champ—that nobody cares about formats such as that of Trader Joe’s (“It’s for Volvo-driving professors”) or Whole Foods (“a bunch of bean-stringing, bark eating liberals”). In their minds, these concepts were just too far left of center or on the radical fringe to be taken seriously as a threat. Walmart and Costco seemed like shrewd operators, but that style of shopping “would never catch on” with their loyal customers, at least not anytime soon. “Not to worry,” they said. “Let’s just keep our eye on the ball, and you help us do the same thing we’ve done for generations, but just make it better.”

Revenues and profits for the traditional grocery store channel were strong back then, and some chains were making money hand over fist. You didn’t necessarily have to be cutting edge, on trend or even particularly innovative to succeed. According to the “reigning champs,” it was a pretty simple formula: clean stores, lots of wide aisles, ample shelving, good quality lighting, the standard stock of popular CPG brands and a high level of friendly customer service. That is what the customer wants, or so went conventional wisdom.

We as retail designers sensed something happening in the food world. Something new was emerging in consumer culture—value—and the “extreme” players were onto it. While varied in approach, these retailers focused on a core audience and provided them a value they could not find elsewhere.

Meanwhile, sad to say, the traditional grocery store is in trouble today. As shocking as it may seem to some, the conventional grocery-store format seems to be on the verge of becoming an endangered species, a relic of the past that is increasingly approaching irrelevance for the contemporary shopper.

Most forecasters and industry analysts predict that the dollar share of traditional supermarkets will continue to shrink over the next several years. Nobody at grocery is laughing anymore about the nontraditional, formerly fringe formats such as Whole Foods, Trader Joe’s, Costco or Walmart. In fact, most grocery store chains are now trying desperately to figure out how they can replicate the success of one or more of those brands (or, better yet, get their resume over to the right people there). But trying to copy the new industry leaders doesn’t really work, despite repeated attempts, for a number of reasons.

The Adaptation Formula

If there is anything I have learned in my career, it is that nothing ever stays the same in retail or food. New consumer trends emerge every day, and the way we live keeps evolving. The pace of this social change is only accelerating. At the same time, new retailers and retail approaches are emerging with near equal speed (just look at the latest Target or Walgreens for examples).

Traditionally excellent retailers are extraordinarily talented at identifying, supplementing, upgrading and implementing operational systems that benefit financial bottom lines. They are experts at turning routine processes into exceedingly efficient procedures, eking every penny out of a supply chain to increase profits, for instance.

Where traditionally excellent retailers are often quite vulnerable is in the relationship between their internal operation formulas and their external approaches to understanding consumer behavior, trends and the overall customer experience. Consumers are not static. They are constantly on the move and constantly changing their mind. This fluidity creates problems for organizations too heavily focused on internal, efficiency-driven formulas. At the same time, these consumer shifts create opportunities for retailers who recognize them and then design experiences and offer products or services to best respond.

Convenience stores are just beginning to offer new food choices, but I fear these new choices aren’t  nearly ambitious enough.

Companies such as Apple, Whole Foods, Costco, Trader Joe’s and Starbucks are not only masters at operations—the internal formula is the foundation for retail success, after all—but they have also created their own proprietary adaptation formulas to respond to the consumer. The adaptation formula is a process, but not a static operational process. By constantly reading and adapting to the consumer and competitive environment, these brands stay relevant and keep shifting away from their potential stereotype niches. They joke about themselves before they can become the butt of any jokes! As retailers, the key point to remember is that while you are sleeping, things keep changing out there—both among consumers and competition. This is simply the nature of retail markets and consumer demand.

What About the C-Store?

In recent years, I have started working on a number of convenience store projects. As different as convenience and grocery are, I see some of the same fixed attitudes, beliefs and self-confidence in the convenience store industry today as I saw in the grocery industry back in the 1990s.

For decades, convenience stores have been able to succeed with a highly utilitarian, functional and overtly literal formula: a simple box, the signature hot dog roller grill, refrigerated doors with beverages in the back, snacks, general merchandise and cigarettes behind the counter. This model has worked well for the industry for many decades and, admittedly, it’s hard to find fault with a formula that keeps paying dividends. So why shouldn’t we just keep doing the same thing?

 If you look closely at the convenience store space, as my researchers and I have, you cannot help but notice many outside players—including smaller-format grocery stores, fast-food chains, quickservice restaurants, dollar stores and drug stores—actively looking at your business model and seeking a piece of your action and market share. While none of these outsiders has emerged as a major threat yet—in fact, some have failed—they will keep coming and improving their game. They are not going to compete with you in the same way other c-store brands competed with you in the past. They are coming at this market with an admittedly new and fresh perspective, a unique approach and a different food and retail philosophy. They are looking for missed opportunities and holes in your strategy, and they aim to exploit them. They will try to do all those things you say you won’t do or that can’t be done, whether that means creating merchandising desire at the storefront, offering healthy and delicious food options, developing comfortable cafe-style seating areas or finding exaggerative ways to attract female audiences (even if that means alienating some men).

Designers admittedly run the risk of sometimes being too far ahead of the curve for the business world. Conversely, retailers are often too far behind the times and entrenched in their well-worn formulas.

I am pleased to say some in the c-store channel (yes, I saw CSP ’s cover story on Wawa last month) are embracing change. But I would respectfully submit that the traditional convenience store model may be fast approaching its own peak. The telltale signs are there: Too many convenience stores are rigidly fixed on their highly efficient formats and formulas, and seem unwilling to consider changing food options and store experiences if it even minimally affects their profit margins/efficiency models. Interestingly enough, many convenience store executives we speak to can even see the changes taking place in society. Yet the industry, despite modest product and design improvement, has still barely moved from its  stereotypical form, shape, model, product mix, merchandising approach, meaning and overall experience.

That Joke Isn’t Funny Anymore

Let’s face it: If we’re all really honest with ourselves, we’d probably have to admit that many convenience stores out there have become a cliché. And that gives rise to the jokes. For ample evidence of this, just look at the way convenience stores have been portrayed in films (as far back as “Bill & Ted’s Excellent Adventure”), TV shows (“The Simpsons”) or talk shows (“Dr. Oz”). Hearing the joke is one thing; understanding what it means, why it is happening and what to do about it is something else altogether. It’s time to tear down the stereotypes.

A stereotype is society’s way of sending you a message. Most people struggle to digest these messages, because they’re actually indirect. But if we’re not attentive, we as a channel risk becoming not only the continued butt of people’s jokes, but also something far worse: irrelevant.

While it would it be difficult in one article to describe every relevant social movement taking shape in consumer society today, I can broadly highlight four key areas I believe will affect the convenience industry for the next several years.

1. The Experience:  When we were kids, the idea of being able to enjoy a well-designed experience was something usually reserved for the privileged and the better off. Today, we all want the “good life” and expect it, from places such as Panera Bread, Starbucks, Target, IKEA and the Apple store. Even discount-priced hotel chains such as Holiday Inn, Fairfield Inn and Motel 6 are getting in on the game of highly designed experiences.

Not all retailers have gotten this memo. Many—such as Subway, Best Buy, Sears and Radio Shack—have been standing on the sidelines, waiting for their pragmatic, functional, price-driven consumers to return. Given the choice, today’s consumer prefers to shop at places offering a better experience (even
Walmart is concerned about this). Everywhere you look—from toothbrushes to refrigerators, phones to pickup trucks—brands have used design to substantially improve their experience, making them more attractive, seductive and engaging.

Far too many c-stores have resisted  creating new kinds of experience, either dismissing them as unnecessary or unconvinced in their ROI. Many instead prefer to “decorate” their box with what they hope are more aesthetically pleasing colors, stripes and banners. Today’s consumer expects something much
deeper, more profound and often more radical than just dressing up the traditional c-store experience. Consumers are looking for something that breaks the stereotypical mold and speaks to a better idea of what “convenience” really means.

2. The Meaning:  For a long time, fast food enjoyed an incredibly prosperous ride upwards. But in recent years, we’ve seen many traditional fast-food concepts peak, and even begin to show signs of fatigue or potential decline. For better or worse, consumers started forming strong opinions, ideas and associations about fast food, egged on by movies (such as “Fast Food Nation”), media figures (Dr. Oz) and books (Michael Pollan’s “Food Rules”) that are highly unflattering to the industry. Scientific studies and policy reports are constantly in the news today, suggesting links between fast food and adverse health. Once-loyal fast-food consumers are now considering migrating to alternatives.

To break free from their stereotype, McDonald’s has gone to great lengths to change its meaning. While “meaning” sounds like a lofty word, it actually has a specific business purpose. By meaning, I am talking about the symbols a retailer communicates and the categorical buckets we place them in. Shifting perceptions didn’t happen overnight for McDonald’s; it has taken many years of effort, experimentation and, yes, I dare say, mistakes. After its adaptation efforts, which included new menu items and store redesigns, McDonald’s has finally been able to pull itself out of the typical category of “fast food.”

McDonald’s has shifted its brand’s meaning, leaving behind competitive operators such as Burger King, Jack in the Box, Taco Bell and Wendy’s. And most important, it has won back a highly critical audience of mothers, who can now see some healthy options there. Meanwhile, the stereotypical fast-food competitors—originally skeptical of McDonald’s efforts—find themselves late to the dance and trying to play catch-up. Some of these brands have resorted to courting their only remaining loyal audience: irreverent juvenile men. But even this audience is showing signs of flight for, believe it or not, more healthy options.

When an industry, brand or concept becomes a stereotype, consumers stop thinking about it. They know exactly what to expect. This is not only problematic for the category of “fast food,” but for convenience stores, too. Increasingly, many groups of people—especially women, children and professionals—would never even consider c-stores as an option for certain products. The stereotypical images they carry with them, formed over many years, don’t allow them to see the c-store in another way.

Changing meaning begins with tangible change, such as reworking the typical box, redesigning standardized interiors and rethinking product choices. While some of you have embraced this change, there remains incredible resistance within much of the c-store industry, in large part because change requires altering the tried-and-true operational formulas convenience stores have always relied on.

3. The Choices:  In the past, if you traveled by airplane and got hungry on your layover, there weren’t many options for eating at the airport. If you actually liked Saran-wrapped ham sandwiches with condensation on the inside turning your bread into a soggy mess, you were in luck. But if you didn’t eat meat or were on some kind of healthy diet, you were out of luck. Today, airports rival high-end shopping mall food courts and, in some cases, restaurant row. And in general, our choices for places to eat are more abundant and of higher quality, too. Society has demanded it. The same higher-quality options found at airports today are also found at college cafeterias, some fast-food restaurants, theme parks and even movie theaters.

Too many convenience stores are rigidly fixed on their highly efficient formats and formulas and seem unwilling to consider changing.

 For generations, c-stores have succeeded by offering a limited assortment of expected products to a relatively reliable stream of customers. While many c-stores are just beginning to offer new food choices, I fear most new offerings aren’t nearly ambitious enough. In short, c-stores aren’t vanquishing their stereotypes. They are instead just back to tweaking or slightly improving the old game.

Consumers today are seeking more control of their food choices. What once seemed like the radical fringe (e.g., gluten-free, vegetarian or Paleo diets) is fast becoming the norm. More and more people are using food to feel better, look better and live longer, healthier lives. Regular people are increasingly disenfranchised by the worlds of economics and politics, but one advantage of our modern age is that you can always take control of your personal health and live better by eating better. Unfortunately, many convenience stores are so far behind this new consciousness that I sometimes worry they may never catch up.

4. The Conversation:  Chipotle should  be considered a fast-food joint. But amazingly, consumers don’t stereotype the brand with this less-than-flattering label. Why not?

Part of the reason Chipotle has been able to categorize itself outside of “fast food” is because it has tapped into a highly relevant social conversation about food that is in line with the values of its targeted audience. While Chipotle is concerned with profit and efficiency, it also devotes time and energy talking about food sources, food networks and food policies. More important, it finds compelling ways to tell consumers about its beliefs and practices. In other words, Chipotle takes a stand on certain issues and puts its values out there for review—and potential criticism. Despite the risk, consumers end up supporting and admiring Chipotle for standing up for what it believes in.

What is your value proposition? What conversation are you having with your customers? How are you positioning yourself as not just a merchant of stuff, but an enterprise with a mission, purpose and relevance?

While my comments about the c-store industry may sound incredibly harsh, my interest is to engage in a conversation and to buoy our channel so that we don’t suffer the setbacks the grocery channel is experiencing. Convenience stores own a legacy of success, and the present is a critical moment to adapt to a new world of consumer tastes. Grocery stores missed the boat, but you don’t have to.


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