In an exclusive interview, NightOwl Convenience Franchisor, Adam Adams talks to Convenience World about its new ‘Store of the Future’ model, the key trends defining the P&C markets and the future for the industry.
What are the key trends defining the P&C markets?
It’s a fierce and rapidly changing environment and its important to stay ahead of the trends in retail. The trend internationally is for a smaller footprint with a greater offer. Consumers are topping up their weekly shop more than twice a week on average in Australia, driving the need for a quality range.
The future challenge for our industry is to meet the many needs of consumers by stocking more lines and driving them into our stores. Average transactions are increasing, as is the average spend per customer, and we expect this to continue. There remains significant growth in traditional key categories such as tobacco and beverages, but also medicine, bread, take-home food, dairy and ambient beverages.
All of these areas have been a strong focus with our new ‘Store of the Future’ model. Our Store of the Future concept is an exciting development in the way we engage with customers and drive the performance of the business.
The stores will feature easy-to-navigate in-store digital technology and fresh gourmet food along with more traditional offerings. Gone are the days when a convenience store can rely on sheer convenience alone to prosper in today’s fast-moving, hyper-connected society.
NightOwl’s Store of the Future offerings are all about being in sync with new technology, consumer trends, current market forces and connection with our customers.
What are the main issues facing the market and how is NightOwl addressing them?
Competition is the main hurdle facing the industry. With big players like Coles and Woolworths decreasing their footprint, NightOwl plans to ensure that every square inch of our stores is utilised.
Our new Owl Café offering is a driving force behind our hot drink growth and, with premium coffee at an affordable price, we believe we have set a new benchmark within convenience.
We’ve partnered up with Tiger Coffee to create a unique ‘café within a store’ experience that feels more like your local Sunday coffee shop than a convenience store. Great quality beans, barista-style coffees in many styles … it’s all part of the broader in-store offering we are looking to provide for customers.
What new systems and innovations have NightOwl introduced?
NightOwl’s sister company, Coyote Software, began operations in 2011 and provides stores with the facilities to better serve customers and grow profitability through the use of reliable and affordable registers and point-of-sale software.
Unlike most modern point-of-sale options, Coyote is able to be operated without an internet connection, working offline until a connection is re-established. Coyote Software has formed strategic industry alliances with Fametech in Taiwan, Trax Retail, for our retail fuel outlets and Insight Cash for ATMs.
Again, our Store of the Future and Owl Café concepts are innovative from the point of view that customers will be engaged and connected through media in-store, and our coffee offering positions us around quality. Coffee isn’t an innovation in itself, but the quality of the product in the convenience store environment certainly is.
How does NightOwl remain competitive?
NightOwl is focusing on key areas that have seen consistent growth within convenience for quite some time, but focusing on quality, flavour and sustainability, rather than simply low cost. We are planning on taking the spaces traditionally used for convenience stores and we are making every square metre go further. Through the use of innovative storage and display methods, we are able to make optimal use of a store’s space constraints.
We are always looking overseas and within our teams to identify trends and opportunities to improve the way we develop our stores, our people and our products. Being in a position to recognise opportunity, evaluate its likely performance and implement a strategy is all about discipline and responsibility, and we take those requirements seriously.
What has made the biggest impact on the P&C industry in the past five years?
The huge level of competition across the industry. You will find the same deals and offerings in some form or another across all competitors. What differentiates a company now within P&C is building customer loyalty and brand recognition.
A quality tool of customer engagement and retention is to create a consistency throughout our stores for products and services we offer. Every time a customer walks into any of our stores, they need to know that the products are identical in quality and value, and we see that as one of the building blocks in building loyalty and commitment.
Leaving a lasting impression has become, arguably, the most effective way to stand out. Being first to market with the latest trends is also more important now than ever, as competition has tightened. Speed to market has become absolutely imperative.
What are your predictions for the P&C industry for the remainder of 2015?
It will continue to evolve and people will expect more and more from us. The emergence of more and more DINKS (double income, no kids) in densely populated urban areas presents a dire need for convenience stores. When they think of convenience and quality, we believe NightOwl should be front-of-mind for them.
People are paying for convenience and want to find their entire vitamin and supplement needs, healthy meal options and all the regular convenience categories. While the major supermarket chains battle it out over price, convenience stores retain loyal customer bases interested in more than cost alone.
Coupling the immediate and growing need for convenience with the improved use of store space, improved offerings and greater quality, we expect big results. It’s also important for us to understand our customers’ needs more intimately than ever, what their expectations are, how we can serve them better, what we can do to improve our offerings to meet those expectations. Also, being able to react if there are shifts in the way people use convenience stores, and implementing new strategies and plans to meet the changing market conditions.
What’s in store for NightOwl in the next 12 months?
The consumer is far more educated and knowledgeable about products these days, and that’s an important consideration in our strategy. While others focus on offering the cheapest coffee, confectionary, foodservice and more, we plan to offer the freshest fruit and veg, the healthiest and tastiest foodservice and café-quality coffee. All while offering convenience store favourites at affordable prices with unbeatable bundle deals.
For us, quality is a real focus. Society is beginning to favour healthy food options and there are political, financial, healthcare and moral reasons for this. We want to remain at the forefront of healthy food offerings in convenience.
It also creates an important point of difference for the business: convenience does need to come at the expense of quality.
Where do you see the P&C industry in the next three years?
The convenience industry will continue to evolve and people will expect more from us. The consumer has more choice and power than ever before, and the ability to connect with customers is easier through online media, but also more difficult because of how much competition platforms have created.
It’s our responsibility to be granular in our research, and committed to understanding more about customers and what a convenience store means to them. Then having the flexibility to adapt our model and strategies to remain competitive and continue to grow our businesses.