7-Eleven’s Evolving Strategy Keeps Us Ahead Of The Game
No matter the industry, the business environment is always in flux. Companies that become too comfortable with their positions in an industry and rest upon their laurels soon find themselves struggling to catch up with the changing times and the changing needs of their customers, and before long they’re out of business. Just look at what happened to Xerox, IBM, and Kodak.
In order to become an industry leader and remain on top, companies must evolve and adjust to the times. 7-Eleven has always been a leader within the convenience store channel mainly because it is an innovator and has been able to quickly adapt to the shifting retail landscape and the changing needs of our customers. From a franchisee’s perspective, I feel pretty good that our company is proactive rather than reactive, and that 7-Eleven has its finger on the pulse of the retail market and is able to effectively forecast and adjust to changes.
One of the ways 7-Eleven is adjusting is by devoting considerable resources to find out more about our customers. Through extensive research we are learning how people shop, what they expect, what they react to, what gets their attention, and then we gear our marketing and our merchandising toward that, which is very innovative. This allows us to better serve our customers’ needs so they will come shop in our stores because we have more of what they want.
Take the increasing use of smart phones, for instance. These days, consumers are very technologically sophisticated and use their smart phones to quickly compare prices and deals while shopping. Given the current weak economy and rising gas prices, consumers are feeling the squeeze and are very careful about where they shop and what they buy. To appeal to these customers, 7-Eleven developed a smart phone app that informs them of our special promotions, provides coupons, and even has a store locator. I think this is a great step forward, and we should absolutely encourage our customers to download the app.
Another service that 7-Eleven is now offering in select test markets that definitely has the potential to attract more foot traffic is the Amazon Lockers program. Essentially, stores are being outfitted with lockers that customers can use to have the items they purchase on Amazon.com shipped to instead of their homes. Then, on their way home from work or wherever, they stop by their local 7-Eleven to pick up the package. I believe this service will go long way in helping us attract new—and more importantly, loyal—customers, especially those with busy lifestyles that are always on the go.
SEI’s research into the changing needs of our customers has also found that, although they are more price sensitive and are seeking more deals because of the tight financial times, they more often prefer to spend a little more to get that premium product. This is especially true when it comes to foodservice items. Right now, foodservice is the highest potential growth category—generating $640 billion in sales compared to $40 billion for cigarettes, which we have long relied on for incremental sales. Armed with this knowledge, 7-Eleven has been changing its approach to foodservice for the last several years to emphasize more high-quality fresh and hot food items priced competitively.
Part of this plan involves developing a distribution strategy to get more fresh foods into our stores quicker, and this includes expanding into more densely populated cities and towns. With this in mind, SEI has spent the last several years building a significant number of new stores and acquiring smaller chains. In the last year alone, our company has added 961 new stores to its roster—over 330 more than it had originally planned. The stores range from regular, stand-alone buildings to smaller urban locations, all to support a more efficient distribution strategy.
In the end, it comes down to how well a company can keep up with the changing times and market. So far, 7-Eleven’s evolving strategies have gotten us through the recession and the weak economy, and I am confident they will keep us ahead of the game.