Circle K is rolling out its latest store concept across its nine markets in Europe (Denmark, Norway, Sweden, Estonia, Latvia, Lithuania, Russia, Poland and Ireland), focusing on the customer experience and adopting learnings from the Norwegian marketplace and trend toward electric vehicles.

Per Selin, Circle K’s director for format development and execution, convenience/merchandising Europe, reports on the progress to date. The new store concept was launched two and a half years ago with three pilot stores in Norway. “That was when we set up the concept, and we have made some adjustments along the way,” he said. “Last autumn, we extended the project with three stores in each of our markets for a test and increased the roll out in Norway.” Today, there are 40 new concept stores in Norway and 80 across Europe, but the target for the next financial year is to roll out a further 250 stores across Europe by the end of April 2020.

The test sites have been crucial in developing the format and offers for markets outside of Norway and learning how to execute the concept, Selin said. While there is a manual for the format, nothing beats bringing that manual to life with actual hands-on experience in the field, he maintained.

The new format stores are organized in three cluster groups:

• “A” sites are the top stores with the highest potential and feature the full concept offer with food.
• “B” cluster stores retain the same furniture and equipment for foodservice but don’t carry the entire food offer.
• “C” stores are the smallest cluster but account for almost half the network, and they feature the same store layout with less equipment and don’t have the whole extended food offer.

Customer centricity has been at the heart of the new concept, as Derek Murphy, food director at Circle K Europe, explained. “We’ve not compromised on the customer experience. Previously we started with the offer, but now we start with the customer experience—providing a nice seating area and Wi-Fi, etc. That’s the base point, and then we layer on top if there is more potential for other elements,” he said.

Previously we started with the offer, but now we start with the customer experience.

And customers will enjoy the same Circle K ambience and experience in all countries, although the food offer will be tailored to local markets and flavors, Selin added.

The new approach is grounded in a massive amount of research and consumer insights, but it’s been a push rather than pull approach. “We’ve changed our course, and it’s been really rewarding,” Murphy said. “One of the things the team championed at the start was to ask the customer what they wanted. However, the customer doesn’t always know what they want until they are offered it, or they want what they have seen elsewhere, but that would just be copying. Instead, we looked at the trends and got the best designers on board and then presented the new ideas and concepts. It’s best talking to the customer after the fact and then review,” Murphy said.

Norwegian Learning

The parallel strand to the new format development was drawing on Circle K’s considerable experience in Norway, where key competitor Deli de Luca has recently remodeled its stores on Esso forecourts. That, coupled with the trend to EVs in the Norwegian market—EVs now account for more than 50% of new personal car sales in Norway—drove Circle K to develop a different type of in-store offer to attract EV customers with good food and seating while they recharged their cars. “It was important to create more of a wow factor with an in-store interior that was more like a coffee shop or restaurant rather than a gas station,” Selin said.

Circle K wanted to take a lead position in this competitive space for being a good player for EV charging but equally providing the right kind of environment where customers could linger for 20 to 30 minutes. As charging and battery technology advances, however, that dwell time is being shortened. Super-high-speed charging, for example, reduces charge time to under 10 minutes. Ensuring the power infrastructure is present for reaching that goal is an ongoing process, Circle K added.

The Norwegian experience has, however, enabled Selin to work alongside a whole Circle K department that is dedicated to EV and to build on that knowledge to take to the retailer’s other European countries where EV rollout is still very much in its infancy.

Circle K envisions other national governments will take a cue from Norway, penalizing drivers of conventional vehicles and incentivizing those driving EVs. EV represents just 1-2% of total car ownership in other European markets, versus 50% of new personal car sales in Norway and just 8% of the personal car fleet (Q1). Still, it is expected to ramp up, especially when price parity is reached.

By then, as in Norway, governments will begin to normalize EVs, Selin said. “In Norway, the EV is a real option and much more part of the culture,” he said.

Food Offer

Circle K has redefined the food offer in its latest format but without taking its eyes off the main prize. “We’ve really focused on our core offer as well,” said Murphy. For Circle K that means hot dogs, burgers and sandwiches but also providing a best-in-class product in each category and with an improved display. “It’s always going to be the majority of our business for the medium term, so it’s about being better than everybody else and making sure people get a nice sandwich, for example, since they are not going to buy rubbish.”

Circle K also put the spotlight on its customer base to determine the customers it wished to serve and discover the customer groups it was not attracting—millennials, younger people and women. “If we were honest, we were not resonating with those groups,” said Murphy. In response, the retailer has launched the Cantina Mexican QSR concept, which is available at about six stores in Ireland. According to Selin, Circle K has used the learnings to create the Mexican offer for the new concept stores. “We are not using Cantina as a brand,” he said. “It’s only for some sites in Ireland, for now at least.”

Similarly, the retailer has worked to boost its credentials for offering healthier options in-store. Now Circle K is bridging that gap with salads, vegetarian choices and gluten-free options, plus products which are not simply low calorie but protein rich, for instance. “So many of our new customers are flexitarian or they like to eat healthily but indulge two days a week,” Murphy reported.

Crucially, Circle K recognizes it’s not the people who are different but that their individual need states change. “There are times when they want to be healthy, and at times they want to indulge,” he said. “We have definitely come a long way, and the feedback from customers has been fabulous. We want to be all things to everybody, which is a difficult place to be, but everybody with a car is a customer, so now we are focused on our core customer, but we also have options.”

Selin reported that Circle K is attracting more millennials and women as a result, and the feedback on the look and feel of the stores, seating area with Wi-Fi and product offer is very positive. “The feedback on the pilot stores was very good, but it’s then escalated,” he said. “We have created something that young people and women really like.”

But core customers have not been alienated either, Murphy added. “They prefer it, but the new customers were more disparaging of our offer before. Now we do not alienate anyone, and we are winning a double-digit increase in traffic as a result.”

Digital Solutions

Digital developments are still very much on the drawing board in terms of apps and ordering systems. “It’s something we are working on really hard right now,” Selin said.

Circle K recognizes it’s not the people who are different but that their individual need states change.

Digital menu boards have, however, been piloted in Sweden but applying the look and feel of the new store concept in a digital manner. “We’ve had lots of discussions in terms of the cost and look and feel versus printing premium signs,” he said. “We are now confident of the look and feel and how the menu boards are selling the product, but we still have to work on digital solutions to order and pay for food.”

Ticket-based systems are being tested in the Baltics, too, but Selin stressed it’s a trial and not a rollout.

The key is making the solutions easy to use and not a me-too, Murphy added. “We have seen solutions in the market that are making things more complicated. We are testing lots of different ideas and will deliver something really wow in the next couple of years in terms of how we engage with the customer. Changing the look and feel of store is not as difficult as changing different platforms,” he added.

“People don’t want to think about payment, and we want to it to be as easy and as frictionless as possible for customers,” he said.

Bright Future

Circle K is bullish. “We are confident for the future,” Murphy said. While sites will likely sell less fuel, they still provide a great parking lot, he added. Convenience and a healthy demand for food on the move are helping Circle K and its ilk outshine high street competitors. “We have a great benefit in the footprint of our stores and location wise, providing travel hubs that are always going to be needed,” he said.

Selin agreed. He envisages the forecourt of the future with more EV chargers and fewer fuel pumps. “If we were looking to build a new store in 10-15 years, the main part will be for EV charging and the smaller part for fuels and trucks. There will be an enhanced food offer but enabling people to move in and out with more service to help the customer and engage with them more too.”