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By Don Longo
LAS VEGAS -- Knowledge, connections and advocacy will be the three pillars of a new strategic plan currently under development by NACS. At the opening general session of the 2006 NACS Show yesterday morning, outgoing NACS chairman of the board Scott Hartman of Rutter's, York, Penn., and NACS president and CEO Hank Armour outlined the critical areas that the trade association will focus upon in the years ahead.
Hartman described the past 12 months as a yearlong study tour of convenience retailing around the world. What did he learn? "Customers want it fresh. They want it customized, and they want it to simplify their lives," he said. "The fresh and healthy image is the first thing customers want." (For full coverage of the 2006 NACS Show, don't forget to check out the CSNews At the Trade Show micro-site at www.csnewsattheshow.com.
As for customization, Burger King had the right idea with its "Have It Your Way" campaign, Hartman continued, noting that retailers need to allow individuals to customize everything for their own needs. And, as for simplification, Hartman related how all consumers want "short cuts" to improve their lives.
Hartman's travels also revealed to him how technology will play an ever-increasing role in retailing. "The cell phone you use here today acts nothing like the cell phones used in Japan and Korea. They are price scanners, navigation systems and even payment devices in place of credit cards," he said. Indeed, he predicted the day of the in-car convenience store billboard is not too far off. "Cars of the future will have programmed into them the location of the nearest gas station and c-store."
Simply put, the demand for convenience has never been stronger, according to Hartman. "Time is what we sell." But, every other channel also wants in on this trend. "They all want our customers. We have to be proactive, not reactive."
Still, his advice to retailers is "Know your competition, but put your real focus on your customers. Study them, engage them and change for them," he concluded, and "give back to your communities. You'll certainly get more back in return."
Armour, who became the third NACS president in its history, elaborated on the strategic planning efforts undertaken under Hartman's leadership. Noting that the association had grown beyond a national association and beyond traditional retail formats, he introduced a new positioning for the association as "NACS: The Association for Convenience and Petroleum Retailing." The new positioning, he said, recognizes that the association spans national borders, as well as narrowly-defined channels of trade.
With the new positioning, said Armour, the association will continue to focus on being an advocate for the industry. "Government relations doesn't make us any money, but they are critical to ensure that you make money," he said. "It's the reason we exist. We are the most powerful, creditable and trusted advocates for our industry."
As proof of the association's advocacy, Armour spotlighted efforts to combat the astronomical rise in credit card fees. "This is the most important issue that the industry has addressed in decades," he said. The convenience store industry paid $5.4 billion in credit card fees in 2005, a 42 percent increase over the year before. "The credit card fees we pay are outrageous. The interchange fees we pay are outrageous. The chargebacks are outrageous," he said to near-unanimous applause from the audience.
A year ago, NACS filed a lawsuit charging VISA, MasterCard and their banks with price fixing and this year testified on Capitol Hill, charging the credit card companies with violating federal antitrust law. Armour noted that "we are a long ways from solving the problem, but for the first time, both VISA and MasterCard did not increase credit card fees for convenience stores for three consecutive rate periods. In addition, they announced caps on fees for purchases over $50 and agreed to make visible their secret interchange fee rules."
Armour also feels the association must increase its engagement on the international front. NACS must identify and share global best practices. He cited the increase in multi-country operators in the industry, including Japan-based Famima, U.K.-based Tesco, Canada-based Alimentation Couche-Tard. "And, 7-Eleven, which started the convenience store industry in 1927, is today a Japanese-owned company," he added.
"It's more than bringing international people to the show -- and attendees from abroad continue to be the fastest-growing part of the show's overall attendance. It means going to where new ideas are, wherever they happen to be."
Finally, he wants the association to be a leader in identifying and researching emerging customers, such as the important tweens, teens and twenty-somethings demographic groups. In Las Vegas, two interactive panels of teens will make their picks of the coolest products on the show floor, and a Wednesday morning session sponsored by Coca-Cola will offer insight on marketing to teenagers.