“The credit crunch” It seems that while “the credit crunch” currently manifests itself into our everyday use of language, the players in the convenience market once more ask themselves how the expected recession, declining consumer confidence and decreasing purchasing power will affect sales at petrol stations & co. It is not the first difficult time this sector is going through and certainly it won’t be the last. Also, it is not the first time that we all ask ourselves what the best ways might be for steering the business safely through the credit crunch. But every time, finding the answer presents itself to become another insurmountable challenge.
Panacea for the crisis? There certainly is no silver bullet, no panacea that could be declared to be generally valid and successfully applied simultaneously to all crises that there are to come. On the contrary, there are many variables, from store location through to marketing, which must be considered in order to strengthen ones business in times of a crisis. And the findings from previous booms and busts can help to gain knowledge for making the right decision to also successfully steer through this credit crunch. 11 variables for convenience retail The specific variables that have to be adjusted in order to maximize success are highly individual and can only be determined outlet by outlet. The variables for convenience stores that need to be taken into account have already been identified: the “11 variables for convenience retail” which I posted in an earlier post, ranging from location via opening hours to customer service. Self-analysis builds the basis for good decisions in times of crisis
To create actionable tasks from the variables for c-retail it needs a detailed outlet analysis. It is necessary to collect all relevant sales data, top-flop-lists and information on the respective immediate store competition. This detailed information of one’s own business and all related factors form the inevitable basis for undertaking such an analysis. But this already is where it fails in many cases. Although the standard top-flop-lists are available from almost all cash-register-systems, few store operators really deal in detail with the information on competitive situation, ask their customers regularly about their satisfaction or invest their time in the analysis of the video recordings of the security cameras to optimize store layout and to find the best placement for the offer of the month. And these are not only the basics of good analysis, but also all in all pretty easy to set up and easy accessible measures. Retailers that do use these measures and therefore do have a good picture of the in-store-paths of the customers, do know about the customers’ requests and suggestions and know what items are slow-moving; these retailers are leading the race for a “safe control of the crisis”. Only if you know your business in detail, you can identify and troubleshoot potentials and threats.
Benchmarking – I’m doing bad or maybe good. But others may be better … A lot of valuable information can be pulled from the analysis of a retailer’s own data, but quickly they will be faced with another challenge. The knowledge about where optimization potentials and customer requirements are, leads only to one part of the solution to optimize the business sustainably. In the second step, benchmarking, comparing one’s own situation and development with the market is crucial. Maybe everything looks quite good from an internal view, but maybe the others do even better … the only solution is an active exchange of information. Platforms such as the convenience Academy, media such as the ATG or market researchers provide active support for the convenience sector.
Continuity
As mentioned before, unfortunately not every store operator has yet uncovered the power of analyzing the data that is readily available from their own business. And even fewer have enrolled in benchmarking schemes offered by industry organizations or researchers.
But even for those who do all that: own data analysis, store analysis, customer survey and benchmarking with the industry, let’s not forget that effective actions only remain effective if they are continuously reviewed and updated. For this purpose, it is important to set up a continuous, regular process of analyzing the business as well as provide a stable and continuous data base for benchmarking.
And a solid continuous analysis will help to identify potential and will help to prepare the business to safely navigate through the credit crunch (and all other upcoming crises).
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