When we think of innovative industries, sectors like tech and pharma, automotive and consumer packaged goods might come to mind first. Then there are the quieter, non-flashy industries that are so much a part of everyday life that we take them for granted, yet they, too, can and should benefit from strategic innovation.
Convenience and fuel retail is one such industry. It began in 1927, when the Southland Ice Company in Dallas, Texas, started selling essential groceries along with ice. This store eventually became what we now know as the 7-Eleven chain. Over time, the concept of the convenience store grew, expanding in terms of the variety of products offered and the number of locations, becoming a staple in American communities and the world over. Today, there are over 1 million convenience stores worldwide, with more than 152,000 in the United States alone.
Customer-centric approach
Consumer needs–and expectations!–change constantly. The old staples like gas pumps and cigarettes are giving way to EV charging stations and freshly prepared deli foods. The ability to respond to a changing market quickly is vital to any industry. All companies must react to trends or, better yet, anticipate them, to stay relevant and profitable. And every once in a while, there comes a market shock so powerful that the only way to stay afloat is to change how you operate at every level of the organization.
COVID-19 was a major shock to too many industries to list, and its effects varied on different industries. For convenience retail, the business—and life—disruptions brought on by the pandemic reinforced what NACS, the global trade association, was already trying to do for its members in more than fifty countries—to make strategic innovation a priority.
"We have to help our members think differently about what the changing market means to their business model and how they show up for their customers."
“The industry has evolved and the marketplace continues to demand new solutions. The options that consumers have today to access convenience are certainly changing,” says Stillman. “The topic of innovation is essential to the future of our industry.”
Innovative state of mind
Historically, it was the vendors who introduced new products to the stores—fuel companies, consumer packaged goods distributors, etc. But that sort of innovation by influence was not enough. NACS is committed to offering professional development resources to members across the association, so when they recognized the need for business innovation education, MIT Sloan was an obvious choice for NACS CEO Henry Armour. “MIT is clearly a world-recognized institution in the field of innovation,” he says, adding that “in our interviews with all prospective institutions, MIT Sloan was most interested and willing to craft a distinctly relevant program for our industry.”
Technology-driven business transformation
Don Rhoads is the President of The Convenience Group, a regional chain headquartered in Vancouver, Washington, and a former NACS Chairman. Don has been in the convenience retail industry for 30 years and he recognizes that technology and innovation are transforming the business. “I don't think we'll ever have a substitute for you and me behind the counter saying ‘hi’ and ‘goodbye’ and ‘how are your kids today’? But I think that what's really important to understand is that technology is driving much of the decision-making process that we have today.”
Executive education tailored to the industry's needs
For the last several years, NACS has been bringing people to the MIT campus to learn from our faculty and each other. Integrating technology into strategy, operations and marketing has been a key aspect of the program, with content changing every year to reflect current trends. “MIT gave us a roadmap that we didn't have before for implementing technology solutions,” says Rhoads. “Backroom systems, data collection, digital marketing, proprietary loyalty, a mobile app—all the new tools we have at our disposal now to make sure that my chances of getting you in my parking lot are better than the guy down the street.”
Despite all the technology-enabled efficiencies, at the heart of the industry are people, on both sides of the counter. Keeping customers happy is only possible if the employees are empowered to feel pride in their work. One of the key facets of the NACS program is sessions led by Dr. Zeynep Ton, the co-founder of the Good Jobs Institute, a non-profit with a mission to help companies thrive by creating good jobs and redefining what it means to run a successful business. NACS partnered with the Good Jobs Institute to offer its members an opportunity to integrate the Good Jobs Strategy into their business. The strategy is a system that combines investment in employees with operational choices that increase employee productivity and motivation to create engaged employees, happy customers, and better performance. Several NACS members are now implementing it in their organizations.
Rhoads attended the program twice, once in person and another time virtually during the pandemic when we switched all our programs to digital delivery. “I think the one thing that always comes back to me is the notion there really aren’t any boundaries when it comes to learning,” he says. “MIT does a really good job of saying, ‘Look, we're doing this a little bit differently than other institutions, and we're doing it for a reason. There isn't really one script here. We're here to help you develop your own script and use that script in a way where you can move the needle for anything you need to be moved. That's a really important takeaway for us. We want people to feel capable and empowered and inspired and excited and fired up.”
The convenience and fuel retail industry is highly varied, comprising large multinational chains like 7-Eleven or Circle K and regional and local chains operating a handful of stores, as well as mom-and-pop storefronts. It offers a great example of why sectors or companies that might be slow to change or don’t consider themselves on the cutting edge should invest in innovation. These organizations are experts in their industries, and may only need the right education partner to support them with the confidence and capability to be future-ready. Because you need to be ready when changing trends and market shocks collide.
Read more about the program’s outcomes for the participants and the association and contact us to see how a custom executive education engagement can spur innovation in your organization.