RaceTrac Special Projects Case Study

Across the Street Team Members: Abby Jones, Chandler Gaddis, Chris Gray, Patrick Weiland, and Wilson Wood Project Coaches: Carly Trost and Amy Stewart Project Sponsor: Cory Hopkins

Overview

What can we do differently for our RaceTrac stores that are “across the street� from our top competition stores (QT/Wawa/7-Eleven) to make them more competitive?

Background

$

GAS PRICES

LOCATION

SIGNAGE

IN STORE

Background

KIOSKS

MOBILE ORDERING

DRIVE THRUS

Is there a low-cost, low-risk solution?

Background Background

SELF SERVICE, OUTDOOR VENDING

Target Customer

I guess the Y wore her out? So now I sit parked because this cranky girl will not be woken up by me!

Trac to Win

On Trac To Win. RaceTrac MAP STRATEGY

VISION We will be a great place to work and the store of choice for people on the go

OFFERS Inviting stores that capitalize on destination drivers and surprise and delight our Guests.

Decision Factors

What is outdoor vending solving?

Serves as a decision factor that attracts guests to our stores instead of our competition Exposes pump-only guests to in store offers without changing their habits

Fuel and Flee What percentage of RaceTrac guests are pump-only customers?

Fuel Guests 40% Inside Guests 60%

â…” of fuel guests are pump only

Pump-Only Statistics WHY AREN’T YOU ENTERING THE STORE TODAY? RaceTrac-Specific Survey 60% of guests indicated they do not go in the store, here’s their reasons why

No Customers Indicated ❖

No Services

❖

Store is dirty

❖

Unfriendly staff

Market Size

5,400 Pump-only guests PSPW

31% of pump-only Guests do not go inside because of time constraints or they have children with them

1,111 Target segment guests PSPW

Intercept Information

“I can’t go inside the store because my baby is in the backseat

40% of responses aligned with Krystyn’s predicament

“If I have time I’ll get a drink or snack

Benchmarking

WHO ELSE IS IMPLEMENTING THIS?

Benchmarking

VENDING MACHINES ON THE RISE No longer a big, bulky box

Benchmarking Refrigeration Touchscreen

Motion sensors that trigger sound

Inventory Management

Vinyl wraps

Digital Signage

Cashless Payments

Recommendation

Refrigeration Interactive Cashless/Cellular Payment Network Digital Signage Inventory Alerts Able to Hold Beverages

Risks & Considerations

OPERATIONS

SECURITY

RISKS

MARKET BASKET

REGULATIONS

POWER

VISIBILITY

CONSIDERATIONS

Solutions -Risks/Mitigation Risks/Barriers IMPACT ON OPERATIONS ❖ Safe restocking timeframe ❖ Restocking time cost: 7 min

CREDIT SECURITY ❖

❖

3rd party cellular network ➢ Data breach would not fall back on RT PCI DSS compliant

CANNIBALIZATION OF SALES ❖ Hand pick products with lower market baskets ❖ Consider only RaceTrac private label

Additional Solutions - Risks/Barriers Considerations MUNICIPAL REGULATIONS ❖ Varies by city

CONSTRUCTION & POWER ❖

Spare conduits available in remodels and 6Ks

VISIBILITY & MARKETING ❖ Promotional Signage ❖ Advertising & Push Notifications ❖ Word of mouth & return customers

Expected Margin EXPECTED MARGIN If Krystyn buys 1 bottle of Coca-Cola, then Racetrac makes $0.60.

Costs EXPECTED COST For Krystyn to keep access to her stockpile of beverages and snacks, the following costs are incurred: Buy DMVI Machines

$3,000 each

Annual Maintenance (10%)

$300

Monthly Service Fee

$14

Card Processing Fee

5.95% Per Swipe

*Reallocation of labor

(7 minutes)

Payback PROJECT PAYBACK â?– Looking at a single machine, if we keep on going with around a $0.60 margin:

Additional Benefits

SOFT BENEFITS

Pilot Plan Pilot Plan INSTALLATION 4 vending machines in 4 stores across the street from competitors GA Region Test Stores 2311 - Northlake 2359 - Bells Ferry 2351 - 129 & Ridge 2340 - Braselton

Strategy Top selling SKUs Private label

OPERATION Run for 3 months TEST INVESTMENT $48,000 for equipment $672 Total service charges

Placement STORE

ROAD

Key Metrics

$ FINANCIAL $200 PSPW

CANNIBALIZATION No more than 5%

SOCIAL MEDIA CALLOUTS 90 mentions

OPERATIONS 7 min restock, Safety

Plans for Rollout

❖

FL 6Ks and remodels with competitors directly across the street

PHASE 3

PHASE 2

PHASE 1 ❖

Install in all stores within FL market

❖

Rollout to entire fleet

Final Thoughts

QUESTIONS?

Appendix

Appendix

Appendix

External Factors ● Soda Tax ● Our technology becomes obsolete