andy davis, bp europe

Growing sales - doing it differently

Andy DavisTrading Director - EuropeTrading Director Europe

The History - six years agoIs this you?Is this you?

• An oil company wanting to be a retailer

• A group of shops that are too big for the offerA group of shops that are too big for the offer

• Concerns around new legislation

• The risk of a tobacco ban

• Impulse sales flat or declining with few “significant” new products emerging in the market

Less car use• Less car use

• Reasons to shop beyond fuel

• No fresh food heritage and a weak fresh offer that is not reallyNo fresh food heritage and a weak fresh offer that is not really trusted by the customer

• Little expertise, employees with minimal “retail” experience

Our Journeyy

Zoning was introduced as a part of the accelerator programg p p g

Fast Lane

A Fast Lane was introduced to drive impulse sales

Category Signage

Category Signage introduced to help customers locate products..

Small adaptations - impulsep p

To maximise the opportunity:To maximise the opportunity:

Secondary units

Block chocolate attachmentBlock chocolate attachment

Battery unit

More prominent bulk-stackso e p o e t bu stac s

Belly baskets

External Mobile Car care unit

Newspaper unit

Small adaptations – Wild Bean Cafep

ISB power-wingp g

Single sided PDU

Introduction of a condiment unit to the WBC

…condiment unit introduced to make it easier for the customer….

Tobacco displaysp y

Gantry space was increased wherever there was ”free” space to use behind thetills. This moved displays from 1.8m to 3m. The benefit has been a more impactfuldisplay and more facings to help drive availability and sales.

New…

Previous…

Newspaper Standsp p

This equipment gives a highly visible display by the side of the store entrance.

Supported by strong brandsSupported by strong brands…

Strong, instantly recognisable brands add credibility - customers trust them. There may be the opportunity to receive branded equipment “free of charge”

Services

Encouraging customers to visit the store more often through providing better services g g g p gthan competitors. Services also provide an added revenue stream to supplement total shop sales.

But………….

• THIS WAS NOT ENOUGH

Why?

+

Competition will intensifyfrom fuel/grocer/coffee shopbrand mergers ….

So………….

We needed to affiliate, with the best…

What was in it for the two companies?p

• BP have great locations

• BP had 8,000 customers per week per store

• BP had three of the four key elements but not fresh

• BP had space to “give up” in most stores

• BP offered scale and operate in an attractive trade sector

• BP branded offer strengths compliment M&S

• There are few stores that will simply cannibalise sales for M&S

BP d i i l• BP were prepared to invest capital

Why M&S and BP?y

• M&S have high quality fresh food products that BP could never replicate

• M&S have sophisticated technical know how• M&S have sophisticated technical know how

• M&S have a tried and tested supply chain for short life fresh foods

• M&S had experience of similarM&S had experience of similar

arrangements

• M&S is a tried and trusted brandM&S is a tried and trusted brand

• Customers wanted access to an

M&S offer

• M&S provided a fantastic support

and training structure

What we both have

• Trust for each other

• Respect for each other

• Similar approaches to Health & Safety

• High ethical and moral standards

• Trusted companies and brands

• Acknowledged strengths

C it t t th t• Commitment to the customer

• Commitment to each other

• Respect for each others key aspirations• Respect for each others key aspirations

• Massive expectations for the offer

Assessing the possibility of an affiliation and what to look out forwhat to look out for..

• Know why you are pursuing this route

• Give an honest assessment of your own strengths and weaknesses

• Give an honest view on what you can offer another retailer

• Do not fool yourself regarding your own capabilities

• It will not rescue a business that is “dying”

• Are you trying to appeal to new and/or existing customers?

• Do not let “big company ego’s” get in the way - acknowledge each other’s strengths

• Are you committed to working with another retailer brand and on• Are you committed to working with another retailer brand - and on what basis?

• Understand what matters to the other partner

• Make sure your skills compliment those of your chosen partner

Assessing the possibility of an affiliation and what to look out forwhat to look out for..

• Do you offer scale in terms of space and the number of stores?number of stores?

• Is a new offer compatible with your Supply Chain ?

• Ensure that there is sufficient store space to deliver a combined offer

It d t b t i bl b i d l• It needs to be a sustainable business model

• Early in the process understand what the challenges are to such an affiliation, particularly g p yI.T./systems capabilities

Assessing the possibility of an affiliation and what to look out forwhat to look out for..

• Empower teams to work together

• Do not over complicate• Do not over complicate

• Manage expectations

• Understand what “success looks like”Understand what success looks like

• Share plans and rationale with key third party stakeholders

• Understand what any trial is trying to measure, remember any trial is a trialUnderstand what any trial is trying to measure, remember any trial is a trial

• Put in Best practise learnings into trial and roll out

• Be committed

• Never forget the customer in all your dealings

Connect refresh

• Zoning - This is evolving as customer behaviour changes and as g g gwe learn

Connect Refresh - Fast LaneConnect Refresh Fast Lane

• The fast lane is evolving through the requirement to meet changing customer needs• The fast lane is evolving through the requirement to meet changing customer needs

• Space is flexed according to category contribution and replenishment requirements.

• The new version helps BP get customers walking past more impulse products andThe new version helps BP get customers walking past more impulse products and therefore there is more opportunity for pick- up.

Connect Refresh – Lunch-time Offer

To Summarise:

• Six years ago BP retail had a whole host of challenges

• Improvements to the fast-lane were put in place

• We developed equipment to improve our stores, for example, the condiment unit in WBC, the cigarette display and the newspaper stands.

• We improved our services and made them more widely available

• ..but this wasn’t enough…

• We looked at the competitive landscape and began a trial with M&S

• This proved successful and we are still rolling out more stores

• …but again we need to think…”What Next?” to help drive profits and stay ahead of the competition.

What next?

Other insert ideas - pizza making, flowers eg Interflora, banks,

Thank youy

• Questions……………………