Ideas 2 CITGO - My CITGO Store

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CITGO bythe Numbers1 vs. 6,000The number of concept stores plannedvs. the number of stores it supplies.0 vs. 48The number of terminals most oilcompanies own today vs. how manyCITGO retains.2,500 vs. 4,500The amount of square footage a typicalCITGO retailer store has vs.the Concept Center.16; 102 feetby 30 feetThe number of fueling positions at theConcept Center and the dimensionsof its canopy.2 acresThe amount of land the Concept Centeris built on, enough to expand withconcepts such as car washes, officials say.$461 millionThe record dividend CITGO paid to itsparent company in the first quarter of 2013.With the capacity to produce 17 milliongallons of gasoline per day through threeU.S. refineries, CITGO, supplier of about6,000 sites East of the Rockies, posted arecord quarterly dividend of $461 millionto its parent, Petróleos de Venezuela S.A.(PDVSA), in the first quarter of 2013.“We keep innovating to fuel ourgrowth smartly,” Flagg says. For CITGO,that means a 27-state distribution footprint,charting southeast Texas, movingnorth through Chicago and into Wisconsin,jumping to New England andthen South again with densities in theCarolinas, Georgia and Florida. Amidthat broad landscape, he sees growth withnew-to-the-market customers, currentmarketers seeking to expand, operatorsready to switch brands and former customersreturning to CITGO.The Retail Concept Center is a steptoward that larger promise. It’s a nod tothe networks of independent retailersthat CITGO’s lineup of wholesale marketersmust keep vital. It’s an acknowledgmentthat the c-store channel ischanging quickly, leaving no room forthe idle or uninspired. It’s an exclamationthat for a company leashed exclusively tofuel marketers, this major oil must focusnot only on forecourt and marketing programs,but also on backcourt conceptsand solutions.“In the last two to three years, a bigpart of our message to marketers to taketo retailers is that we have to elevate ourperformance,” Flagg says. “The industryhas done a great job of raising consumerexpectations. If we’re going to play, wehave to elevate [our locations].”Sparking IdeasIf elevating an entire network is the goal,CITGO’s hands-off, supply-only modelcreates a challenge. The oil company can’tforce one definitive path, or even pushbest practices down through the chain. Ithas to convince distributors who in turnmust inspire retailers one, two or threestores at a time.Put simply, this impressive store inHouston is a true one of a kind, unlikelyto be replicated. Unlike ExxonMobil’sOn the Run or Chevron’s ExtraMileretail concepts, this store will not bestamped across CITGO’s markets.CITGO is emphatic it will not dictate
to its fuel marketers the cloning of itsgroundbreaking concept.Rather, the Concept Center is CIT-GO’s path of least resistance: an unbiased,in-the-trenches laboratory for new andemerging products, concepts and tactics.And that is because, unlike its Big Oilbrethren, CITGO has no interest in owningor operating stores, or giving ordersto its field of fuel marketers and dealerson how they should run their sites.With that premise in mind, CITGOproject developers, including Jim Cox,manager of retail development andoperations, and Jonathan Watson, managerof business services and paymentcards, set an agenda of specific conceptsto test in the store’s initial incarnationand another set of near-term projects.Here’s a quick rundown based on threestore-level functions:▶ Operations. These include productgondolas on wheels, store tablets foremployee applications, Web-based trainingand Web-hosted time cards.▶ Merchandising. Finding optimalpricing spreads for retail fuel postings,two-tiered pricing, commissary deli itemsand white wine sales from the beer andwine cave.▶ Marketing. A recycle center, hightechupselling and electronic signage setup to drive sales.Future projects include mobile cashregisters, day-part fuel pricing, productvending at the pump, mobile apps andsocial media.“We don’t have all the answers,” Watsonsays. “But we’ve created a forum, acatalyst for discussion and the sharing oflessons learned.”More than a dozen marketers havetoured the facility since its opening inthe spring, Watson and Cox say, with theformat sparking valuable insights.Cox freely admits that some of theirbetter ideas were unintentional. Forinstance, the wheels on all the shelvinggondolas were fitted so CITGO couldeasily move displays—partly to test newmerchandising strategies, but also for thesimple logistics of easily switching thingsaround. A marketer offered Cox therevelation that the wheels would makecleaning tile floors easier, potentially savingthe marketer hundreds in quarterlymaintenance. (Indeed, on the day of our“The challenge is ... thatyou become one of thewinners. What do youhave to do to put yourselfin that category?”visit, CSP editors changed the positioningof the store’s healthy snacks to give thearea a stronger facing from the checkoutqueue.)The store is also an opportunity formarketers and retailers to test things theycouldn’t afford to pilot otherwise. Forexample, the technology for upsellingat the site can cost $2,500 per register.“Here,” Watson says, “we can test it inan unbiased way and offer our opinion,without a retailer having to pay.”Store TourThere’s something to be said about havinga hands-on environment in whichto watch and learn. As ordinary customerscasually walk about the store, visitingmarketers and retailers can observebehavior, see state-of-the-art technologyin action, listen to concept designers andbounce around ideas.And unlike the myriad retail formats
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Ideas 2 CITGO - My CITGO Store

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