Janice Rudkowski is an assistant professor with Ted Rogers School of Retail Management at Ryerson University where she focuses on buying and merchandising, category management and innovations in retail. She developed and designed Retailer Perspectives in Category Management, the first undergraduate course in Canada with curriculum certified by the Category Management Association. As part of her vision, students partner with Petro-Canada, Red Bull Canada, Field Agent and NielsenIQ to examine current issues in the convenience and gas channel.
Tell me about the Category Management course at Ryerson University, and why you decided to focus on the convenience sector.
JR: I thought it was a great opportunity for the School of Retail Management to differentiate itself. When I got the course curriculum certified by the Category Management Association, I realized I needed industry partners so that I could have the students working on real projects. I reached out to somebody I knew at Red Bull and they said their biggest market is the convenience channel. I became really fascinated with this because, when I looked across our retail management curriculum, we didn't have anything focusing on convenience and it’s such a big channel. I reached out to Leslie Gordon at Petro-Canada, who was totally excited about this idea of working together. It started with the right people being really passionate about lending their expertise.
You launched this unique experiential learning course in 2018, what have you observed about the convenience channel since then?
JR: It's really been fascinating to focus in on convenience and one of the challenges that we've given the students is to consider the blurring of the channel with a project called “Channel Blurring and Changing Consumer Behaviours in the Beverage Aisle.” It’s an interesting issue that every channel is experiencing because of shopper behaviour. Shoppers aren't necessarily tied or really care about where they buy, for example, a beverage. They just want to be in a place that's convenient for them. So if they're waiting in line at Winners and they see that there's a fridge full of Red Bull, they're not going to say, oh, but this isn't right—it doesn't matter to them, they’re going to buy the product.
When it comes to in-store experiences, so much has changed in the last year: How is this shifting and shaping convenience?
JR: A lot has been driven by regulations in terms of which stores can open and how many people are allowed in the store. That’s changed shopper behaviour—there is less browsing and more, I have a list I have to get out of here fast’, which really affects that customer journey and shopper experience. There's not as much opportunity for entertainment anymore. The shopper doesn't necessarily want to be entertained in the same way because they're thinking I need to get what I want and get out of this store. Some of my research delves into how that convenience store customer journey is really changing.
What trends are you seeing and how is that shaping things on the category management side?
JR: I certainly think the relationship has changed. There is some recent research that shows just as smaller establishments had started to grow, we had the pandemic and shoppers were looking for more one-stop shop opportunities because they don't want to have to shop in multiple stores. That definitely challenged the convenience channel. With convenience, the challenge is picking just the right assortment and it really has to fit what the catchment area needs. Assortment needs to be rethought. First, it was what are the must-have items during the pandemic? But now it’s shifting again—there's a lot of exciting things happening in convenience. The big players are using technology and data to make decisions and innovate. The convenience chains have the capacity and the resources to leverage the data and category management really relies on data. If you're able to understand your performance versus the market, you're much better able to manage change.
What would you recommend to independents, who don’t necessarily have access to large amounts of data? What can they do to make decisions in a more informed way?
JR: You’re right, a small or independent retailer is going to have their own internal POS, but they're not going to have marketplace data when making pricing or promotion decisions. However, one of the advantages that the independents have over the chains is building one-to-one relationships: They can use data from the conversations they have with customers to help inform their assortments. One thing that is really interesting that independents do is that they often collaborate with other independents to increase their buying power. When you create a group there's an opportunity to start to share data. When you can gather more data points, you then have an opportunity to get a better lay of the land and make better decisions.
How do you see the convenience channel evolving?
JR: Independent operators still make up the bulk of the business, but that's shifting. I live in Midtown Toronto and our convenience stores are such an integral part of the main street shopping area that provides so much vitality to a community. With independents, there's this idea that they're stuck in the past, that the stores are a bit tired, but you have a lot of really interesting players coming in and turning the whole idea of a convenience store on its head and doing completely different innovative things. It speaks to the blurring of the channels and even questioning what is a convenience store? My local butcher shop is a very small store, but it's super modern and very cool looking and they've brought in all sorts of pantry items and they sell fresh bread, as well as a very curated assortment of fruits, vegetables and dairy. Are they a convenience store? People go in there and just pick up snacks. Their assortment represents things that regular convenience stores have, except that their brands are perhaps higher end.
They don't have lottery and tobacco, which some would consider to be defining categories for convenience stores—does that matter?
JR: It’s an interesting opportunity to rethink what convenience is. Every channel in retail right now is rethinking their identity because shopping behaviours are changing so quickly. The term convenience comes up in terms of one of the top needs of every shopper across every shopping experience, but we also have this whole channel called convenience. If everyone is trying to deliver convenience, what is the role that convenience plays? There are those defining categories, like lottery and tobacco, but then there are also so many other categories that have relevance, like beverages. Each of those categories shifts with changing consumer trends—a few years ago it was water, then it was ice tea and now it's kombucha and RTD coffee.
So how does convenience stay relevant?
JR: You can to an extent take a cookie cutter approach, but whenever it comes to being a neighbourhood store, you really have to know your people and what they're after. That's where the mom and pop convenience stores are so progressive. At my local convenience store, they know me and there are certain things that I like to buy there. He’ll say, “Come back on Tuesday. I promise I'll have your lactose free milk.” That’s powerful—building this type of relationship is really where the independents have that edge.
This article originally appeared in the May/June 2021 issue of Convenience Store News Canada.