CSD Cover Story: Chevron Gets Fresh

Discussion
Oct 31, 2006

By John Lofstock


Through special arrangement, we present these opportunities to discuss the subjects of Convenience Store Decisions magazine’s monthly cover stories.


Amateurs work until they get it right. Professionals work until they can’t get it wrong. It’s this philosophy that is driving Chevron to display its professional prowess as it prepares for the nationwide rollout of its Image Refresh marketing program.


“Research shows that a key reason customers consider switching brands or gas stations is to try a new, more appealing site, so the Refresh Campaign offers a perfect opportunity to strengthen brand loyalty in existing customers as well as reintroduce Chevron to new customers,” said Shariq Yosufzai, president of Chevron Global Marketing.


“Image Refresh is about revitalizing our facilities and brand image by leveraging our new, more contemporary Chevron logo,” he said.


Image is Everything


The major new elements of the program consist of a multicolored blue and white canopy that features a lit fascia with blue downlighting for a greater visual impact at night along with other features that create a more open feeling.


Chevron also has a new pump design that is cleaner and free of clutter and unnecessary graphics, which fits in with the company’s overall plan to make the unit more inviting to women.


The lighting is another area that was overhauled with both cost and the female demographic in mind. The new units are much brighter – illuminating the entire lot – which makes the facility safer. Plus, utilizing new technology, only two florescent light bulbs are needed versus 72 in previous models.


Going the Extra Mile


If Image Refresh was the only thing Chevron was doing, it would probably be enough to stay competitive in the fight for fuel dollars. But the firm is already looking to take the program a step further.


Chevron plans to launch a package for small marketers in the one- to five-store range that will allow them to upgrade to a retailing solution that includes both Image Refresh and the company’s Extra Mile convenience store concept.


Extra Mile offers a host of upscale food items, a gourmet coffee bar and gives participants access to McLane Distributing for grocery and dry goods.


“It’s a powerful brand offering for an independent marketer, enabling them to compete effectively with other big brands in high-volume and rural markets,” said Danny Roden, vice president of marketing for Chevron.


One new section featured in Extra Mile that is turning out to be special is HydraZone, which is an open-air cooler stocked with bottled water, isotonics and energy drinks. It is located just inside the front doors facing the checkout counter, a few feet from the cash registers. It was developed strictly to capture customers’ attention when they walk in the store and boost impulse sales.


“Our first concern when we added HydraZone was that it would cannibalize cooler sales from the back of the store,” Roden said. “But tests showed no drop off at all in cooler sales. Instead, it increased sales of bottled water considerably.”


Chevron is bolstering its commitment to innovation at a good time, especially in California where retailing powerhouses Tesco and Japan’s Family Mart are growing convenience concepts. Family Mart now has about a half-dozen Famima stores in the Los Angeles suburbs and Tesco will launch its Fresh & Easy concept in the same market in early 2007.


“There is a danger that small operators are going to be become dinosaurs unable to compete with the likes of Tesco and Wal-Mart,” said Mr. Roden. “That’s one of the reason we think the combination of Extra Mile and Image Refresh can give small marketers some ammunition to fight back not only with a powerful brand offering, but also with a solid credit card base and considerable company support.”


Discussion Questions: Are Chevron’s Image Fresh and Extra Mile programs the right response for small operators looking to meet both the current and impending
competitive challenges their businesses will face? What are the keys to success?


Chevron plans to measure the progress being made with its Image Fresh and Extra Mile programs. The company has contracted a third party to test every program
store monthly and grade on 120 different points ranging from store cleanliness and service to how well stores receive deliveries.

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7 Comments on "CSD Cover Story: Chevron Gets Fresh"


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Odonna Mathews
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Odonna Mathews
15 years 6 months ago
Consumers care more about price, convenience and cleanliness than a logo for a gas station. They just can’t be bothered unless they really find a difference from one chain to another. A new pump design is appealing (as I found the current one a bit confusing from others I have tried) and lighting is important. New drinks and coffee are a plus (if you’re thirsty.) How about clean and accessible restrooms? Two summers ago I was in Germany and was amazed at how immaculate their gas station rest stops were. Not only were they consistently spotless, but they also offered really good food and often tables and chairs to enjoy the meal, as well as a variety of convenience items, and even showers. Now maybe that model won’t work here, but it does show you can differentiate your company in many ways unheard of in the U.S. Consumer surveys are important, but they must be measured regularly by management and utilized in performance appraisals of managers or they don’t make a difference in the long… Read more »
Robert Leppan
Guest
Robert Leppan
15 years 6 months ago
Chevron’s decision to give their C-stores a face lift, improve lighting and to add new items is not exactly revolutionary. It’s necessary in order to try to stay ahead of competition. Assuming the price of gas at the pump is competitive maybe they can attract new customers and keep the regulars. I like the 3rd party, unbiased tracking to assess how stores measure up to pre-set criteria, linked to some type of performance incentive for managers. However, on the customer service side, you’re still going to have the minimum-wage counter help – who probably don’t care a lot if the gas pump’s not working right, the coffee has been on the burner for 2hrs or the washroom is a disaster zone. Staying power and corporate commitment is another issue. Chevron tried an Hispanic initiative called Chevron Si! a few years ago to capitalize on high Hispanic traffic with a special kiosk/store set but pulled the plug after a short period of time. However, on the whole I commend Chevron for trying to be innovative and… Read more »
Philip Granger
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Philip Granger
15 years 6 months ago

The thought that Chevron is going to attract more customers just by boosting their image is preposterous. If Chevron wants to boost customer loyalty and image, the first place they should visit is the price at the pumps. Several store chains in the Atlanta area have already increased lighting and started serving premium coffee; some even have fast food restaurants inside (McDonald’s, Subway). Chevron is years behind some competitors in brand loyalty. In my travels throughout the Southeast, Chevron is $.10 to $.20 cents higher per gallon of gas than other competition. My brand loyalty is with the competition that can save me $30 to $40 on the total gas purchases per month over Chevron.

Phil Masiello
Guest
Phil Masiello
15 years 6 months ago
The retail landscape is changing dramatically for every player. C-Stores are no exception. The Mass and Club stores are taking share from the grocery industry. Drug companies are taking share from the grocery segment and everyone is trying to get into the fuel category to increase customer trips and offer value. Everyone wants to own convenience. C-stores are vulnerable to all of these competitors because the primary profit drivers of Fuel, Cigarettes and beverages are constantly under competitive, and in the case of cigarettes, legislative pressure. Given that 66% of the U.S. Population has shopped in a convenience store in the last 30 days, making 2 stops per week and 84.1% making that stop because of convenient location, this growth should be accelerated with the correct products and programs. The industry is reinventing itself to compete in the morning; afternoon and evening day part with a different offering. C-stores are better positioned to take advantage of this channel blurring by focusing on their strengths: -Locations — positioned to capture consumers on the way to and… Read more »
Ryan Mathews
Guest
15 years 6 months ago

Let’s see…putting impulse items by the cash register for customers running in just to buy gas, lottery tickets or cigarettes…amazing! Improving lighting so that “women” will be more comfortable (confirmation that men generally operate in the dark?)…ground breaking! Stocking better food and a higher grade of coffee…astounding! Assuming some underpaid worker is regularly pouring out the old and making the new. A competitive answer to operators like Famima who offer (among other things) organic coffee, sushi, dim sum and entrees like Chicken Korma — a chicken curry dish made with cashews and basmati rice? I’m doubting it.

Mark Lilien
Guest
15 years 6 months ago

The third-party testing is only mentioned briefly by Chevron, yet it might be the most powerful service improvement tool. Mystery shopping programs, implemented skillfully, can be powerful drivers for staff performance. If Chevron’s third-party testers are merely looking at the physical facilities, and if their schedule and identities are known in advance, their impact won’t be maximized. Best thing about mystery shopping programs: the lead time and expense are a lot less than a store renovation, yet the sales leverage can be excellent.

Ian Percy
Guest
15 years 6 months ago
An “Image Refresh” program? Sounds like PR language for “We’re finally going to clean up the filthy place.” And what was the ‘image’ that they are now making fresh again? You can’t ‘re-‘ something that you didn’t have in the first place. Am I against helping the little guy, buying gas at a place where I don’t have to worry about what I’m stepping in and where I can get a bottle of water if I need one? Of course not. But this belief that all you have to do is put in new awnings and pumps and POS coolers and people will flock to your door is just nuts. There’s no service anymore so we’re down to the price of the gas. Notice that there’s not one word in this article about people. Even the “Extra Mile” program – which you’d think would be based on the biblical principle of service to others – is all about where to place the cooler. This is like thinking your teenager will clean up his room because… Read more »
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