Innovation–The Path To Prosperity

We all know the story of “Uncle Johnny” Thompson and the Southland Ice Co. and how he had the spark of creativity to sell simple grocery items to level out sales in off-peak months. This planted the seeds of what would become the modern day convenience store. We also can recite chapter and verse on the origins of Slurpee, Big Gulp and Big Bite. Those revolutionary innovations built and defined what 7-Eleven, Inc. (SEI) is today. Many of us chose to franchise with 7-Eleven precisely because of the unique offerings that competitors could only attempt to copy. My, how times have changed.

There is no dispute that SEI has invested untold millions in the Retail Information System (RIS), and I am not here today to debate the pros and cons of that system. Suffice to say that the entire capital investment focus of SEI over the last 20 years has been on information technology, distribution solutions and, more recently, acquisitions. What is missing? The two most obvious are capital spending on remodels and innovation.

Let’s look at innovation. For much of SEI’s history, its fabled growth was fueled by innovation. 7-Eleven was the first to be open from 7 a.m. to 11 p.m., first to offer hot coffee to go, first to offer fountain soda, hot dogs, phone cards… the list goes on. Those creative approaches on the cutting edge of an ever-growing expanding population allowed stores to grow at a fascinating pace. The other guy’s “Brand X” could at best only copy our successes because they weren’t us.

Today, with over 150,000 gas and convenience stores across the U.S., it is harder to always be at the leading edge of change. However, therein lies the opportunity—with thousands of stores spread across the land staffed with motivated and committed personnel, we have thousands of independent laboratories for innovation. It is time to unleash the giant within: the talents and gifts of the franchisees. Stop penalizing free thought, and encourage new products with less concern on distribution models and control. Franchisees know their customers’ needs and desires—let them be satisfied!

At the same time, SEI must commit to seeking more real competitive product innovation, by region if necessary, to reclaim our legacy. It makes no sense to this humble franchisee to have a rotating cadre of experts in Dallas who proclaim every few months, “At last, we have developed the ultimate widget!”, only to find that item on the delete list three months later and a new “expert” in the position. SEI must commit to developing processes that truly differentiate us in the market place. Some ideas along these lines would be to get scratch lottery tickets off our counters and into electronic dispensers. That would cut down on losses. Devise a system for gasoline purchasers who use cash to authorize at the pump without making multiple trips into the store. Quik Trip has done this for years. Make our stores Wi-Fi hot spots with killer apps to reclaim tech savvy millennials. Develop a real signature sandwich for each region, or market if necessary, but not a “one size fits all” product for every store across the country.

The competition in our chosen industry is worthy and fierce. I believe franchisees are willing to stand and fight, but not with each other and certainly not with our franchisor. Franchisees must realize that at times they must put aside their pet preferences and sacrifice to a greater good—the good of an entire system.

SEI must also realize that not every thought or idea that emanates from HQ is pure gold—often they are not. They must from time to time apologize for mistakes as a gesture of sincerity and as a way to regain credibility. Foremost, SEI must stop blaming franchisees for bad ideas that fail and penalizing them for not keeping their stores fresh food clean. Without the capital investment to bring all of the stores in parity to newly built stores, SEI and I will keep pointing fingers at each other. While we have made small strides in capturing some fresh food sales, we as a system have miles to go. These are my thoughts and I would love to hear yours!