Increase Sales at Your Truckstop With A Strong Retail Program
All truckstop and travel plaza operators are working to get customers in the door and to the cash register, and a well-planned retail strategy can do just that. Yet all too often, business owners are trying to be everything to everybody, which can do more harm than good.
“There is usually a very big disconnect from the reality of an operator’s actual store and the type of customers shopping there versus their actual merchandising strategy and tactics,” said Darren Schulte, vice president of membership at NATSO.
To increase their success, top operators should have plans and processes in place to help them manage the fundamentals on a daily basis and craft a retail strategy based on the key customer group locations are trying to attract.
“You can have the best price on cigarettes in town or the coldest beer or the best smoothies, but whatever you decide as your strategy should be based on who you’re trying to attract and then you have to support the strategy,” Schulte said.
Know Your Customers
Crafting the right merchandising strategy always starts with knowing your customers, Schulte said. “I’m always stating that you first have to know who your customer is or who you’re trying to get,” Schulte said. “If your merchandising strategy is to offer the latest and greatest electronic gadgets but you have a customer base of female customers that aren’t into CBs, your strategy and your tactics to support that strategy are probably going to fail because that isn’t your customer.”
Herb Hargraves, director of fuel and retail sales at Cash Magic, which operates 10 locations in Louisiana, visits stores and solicits feedback from the managers and associates by region to find out what customers are looking for in each of the stores and the needs for an area.
“We are spread out across Louisiana and we try to target the certain demographic by region as each can be vastly different,” Hargraves said. “I have found that what sells in North Louisiana will not always sell in South Louisiana.”
Cash Magic sells a premium quality sportsman cooler in South Louisiana that sells well, but in East Louisiana in the Baton Rouge market, it doesn’t. “Another example is with sporting teams, such as the Saints versus the Cowboys. We sell a lot of Cowboys products in North Louisiana and barely any Saints, which is just the opposite in South Louisiana.”
Ed Leddy, a retail expert and a featured speaker at The 黑料社区Show 2016, said that customers today are after speed. “Speed is very, very important,” he said, adding that anything operators can do to meet that need will help spur sales.
Examine Trends Within Categories
Looking at the overall industry trends, particularly as they relate to certain categories, can also help operators determine the areas they want to emphasize in their stores, Leddy said.
“Tobacco is a dramatically dropping category,” Leddy said. “Cell phones have become a multi-million dollar business. There is a bigger and bigger offering of the food service portion.”
Healthier offerings are trending as well. “Every single year the number on the healthy side is creeping up. People really are putting their money where their mouth is. Those things we tried 15 years ago that wouldn’t sell, they are selling now,” Leddy said.
The amount of cooler space in a store has grown as well. “In 1975 there was one beverage we offered. We sold cans of Coca-Cola. Today, when it comes to dispensed beverages—coffee, hot drinks or fountain drinks—the customer loves to customize their offering. The more the customer likes it, the more they will tell their friends,” Leddy said.
Decide on Strategy
Once operators understand who their key customers are or who they want them to be, they can decide on the categories they want to be known for. “From there, develop promotional and pricing strategies based on what you’re trying to accomplish,” Schulte said. “If you’re going to have a wide selection of craft sodas, your signage should say that and you should be communicating it in the store and in your social media.”
Create the Right Flow
Placing products in the right location will drive profitability. Mike Lawshe, president of Paragon Solutions, suggests operators look at the layout of their store and ask themselves what customers can do next once they complete their primary objective. “Destination is first. Impulse is second,” Lawshe said. “If all you are doing is getting them in and out of there and you position your products that way, you have short-cycled their trip. You haven’t sold more product.”
Placing restrooms at the back of the store can draw customers in. “What you put in as they go to the restroom is going to be critical for driving sales,” Schulte said, adding that operators should place items that attract a range of customers in those areas. “If you’re only putting stuff in the front or key walk areas that only makes sense to one type of your customer, you’re running the risk of never fully developing your sales.”
Lawshe said end caps are an operator’s single greatest opportunity to sell. In addition, the sales counter is the last chance operators have to make an impulse sell. “As you’re exiting, you’ve already done your planned shopping,” he said.
Because the checkout counter is prime real estate, Lawshe suggests operators put a lot of thought into the merchandise they place in the space. “Consider putting seasonal things on the counter and having custom-built or cascading racks,” he said.
Schulte recommends operators place items people routinely forget, such as cellphone chargers and sunglasses, by the cash register, and said they should be careful not to fill the counter “with a lot of junk.” He said, “Don’t make it difficult to buy something, Give your customers room to move around and space to shop.”
The space customers desire extends to different areas within the store, Leddy said. “If you notice when you go to Starbucks, they hand you the cup of coffee right up at the counter and if you want cream and sugar you go far away. They do that on purpose,” he said, adding that giving customers the appearance of more space where they order can spur sales.
Fifteen years ago, Leddy worked within an operation that moved condiments away from the coffee and he increased sales by 500 cups a week. “It had nothing to do with better brewing or training of the people. It was about freeing up the space,” he said.
To help give the appearance of space, Leddy suggests operators stick with shelving that is 54 inches or less. “Today’s customer likes friendly, open and fast,” he said. “They want to be able to see across the store. Once you go above line of sight, the person sees this item but you’re blocking visibility through the store.”
Create Promotions to Support Your Key Categories
Part of a merchandising strategy is to think about pricing, promotional structure and timing. Schulte said, “Whatever your strategy is, are you following standard operating procedures with the rest of the world? If you’re in apparel, are you bringing in shorts with the rest of the retail world in February or March? Are you trying to sell Christmas merchandise in February when it should have been cleared the first week in January?”
Schulte said vendors can help operators create their retail strategy. “You should be looking at a calendar with your vendor. A single store operator doesn’t have the benefit of having a category management team. They have to employ the systems out there with their vendor,” he said.
The relationship should be collaborative and truly focus on a strategy. “It doesn’t mean the vendor just drops off a pallet of 12 packs and puts a sign on it. That isn’t a merchandising strategy,” Schulte said.
Tropiceel Products Inc. frequently works with customers and sets up meetings at the beginning or end of the year to review the year ahead. “We know there are certain times of year our products sell more—holidays, gift giving seasons. We set it up on a calendar so we can be prepared,” said Becky Jean Horace, a spokeswoman for the company.
Tropiceel also works with operators on a free-sample program so locations can give drivers a sample with each shower. The program has spurred sales for locations that have followed the plan and can help locations connect with customers. “It makes them feel special at that shop. It is a nice addition to the whole experience,” Horrace said.
When it comes to connecting with customers, Schulte said operators can use discounts, but it is important they identify the best sellers and promote them heavily rather than placing everything on promotion. “We can identify things that make a difference. Snickers is the number one candy bar. If you promote that, you’ll change the value perception without having to change the price on every candy bar. In the cooler—Mt. Dew is the best seller, so highlighting Mt. Dew periodically will drive the value perception,” Schulte said.
Remove Redundant Products
Schulte said some operators end up carrying the same type of products from different vendors, which takes up space and, in some cases, gives customers too many options. Schulte said that sometimes additions evolve over time, and eventually an operator can end up with 12 different types of locks, for example, from 12 different companies.
“I visited one location that had the exact same light bulb but in different packages and at different price points because one came from a grocery vendor and one came from a truck supply vendor,” Schulte said.
That type of redundancy can crate confusion and frustration for customers as well as the management of the store. Schulte said, “A lot of the times these products are the same UPCs, so how are you managing that?”
Differentiate Yourself
Creating a theme within the location can help make it memorable and increase return customers, said Keith Wade, manager of Dodge City Petro. Wade recommends operators try to take 20 percent of their store and make it their own.
Dodge City Petro has gone with a western theme drawing on the local surroundings. “If you theme your site, then I will remember it. You’re creating yourself as a destination site,” Wade said. “We have a western looking outhouse inside of the location. We have had to fix it eight times because it got damaged from people taking photos in there.”
To find unique products that he can use to differentiate the location, Wade attends gift shows. “My favorite is in Gatlinburg, Tennessee. There are 3,000 vendors. I am looking for margin and to theme this thing,” he said.
Bill Decker, manager of Davis Travel Centers in Stony Creek, Virginia, spends a lot of time looking for the next big item and keeps his eyes open when shopping at Walmart and Best Buy. “A lot of time, Walmart will be the first out with new product in the snack area. I will buy enough to spread throughout the store and monitor it. Then we will ask our grocery company to bring it in after we had success with it,” he said.
Hargraves uses a combination of trade social media, publications and suggestions from vendors to make decisions on what to carry. “Sometimes I try new things by just going by what I am seeing as a consumer in the market,” he said. “I have implemented a few items that just did not work in our environment and other outside-of-the-box items that have been very successful.”
When it comes to adding new products, Hargraves typically tests the items in larger stores and evaluates the success after three to four months. “If the product has successfully sold, I will launch in the remainder of the stores,” he said.
After another three to four months, he evaluates sales again and visits stores that aren’t performing as well to solicit feedback and may eventually pull the product.
Create a Markdown Strategy
Sometimes operators are faced with moving out product that just isn’t selling, and Schulte suggests operators identify their markdown strategy. Schulte said operators can often opt for guaranteed merchandise, which means the vendor would take it back if it doesn’t sell, but in some cases, guaranteed merchandise isn’t the best option.
“In my past we were more interested in maximizing the profitably. We would rather do markdown cadences rather than be able to return,” Schulte said, adding that with guaranteed product, an operator may be paying 20 to 30 percent more on an item to cover the guarantee. “Look at what you might be loosing if you sell through it.”
Take Time to Upsell
Some locations embrace suggestive selling, also called upselling, as a part of their retail strategy. Cash Magic has increased its sales through suggestive selling, and Hargraves attributes the company’s ability to continue to growing c-store sales year over year to its suggestive selling program.
“Upselling is a lost art that not very many retailers take advantage of,” Hargraves said. “We have found that by offering a specific program with easily sold items—those that retail below $2.00—and, most importantly, rewarding the front line associates actually suggestive selling to be a great way to grow incremental sales.”
Schulte said locations that embrace suggestive selling as a strategy have to support the program. He asked, “Are you helping to support the cashiers at the counter? Do you hold your cashiers accountable if they aren’t suggesting selling? If your goal is to have a strong apparel program, are you supporting it? If someone forgets to place an order, how are you holding them accountable?”
To encourage employees, Hargraves offers rewards and prizes to employees, including the front-line employees and managers. “We have a competition and we have teams based on monthly volumes. We break them into buckets based on store volume and you can also look at store traffic,” he said, adding that he sends out a weekly email updating teams about where they stand in the competition.
Photo Credit: Jules Clifford/NATSO
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