From run-of-the-mill convenience stores to the
most exciting, breakthrough concept to hit the
market in decades.

Background

• The idea of convenience stores, a quick and easy format for picking up the one or two items missed at the grocery store, quickly caught on and spread like wild fire across America during the 1960s and 70s.
  
  
• By the 1980s the market was completely saturated.
  
  
• During the recession of the early 90s, sales at convenience stores plummeted and some locations were forced to close.
  
  
• As it prepared to launch a new service-focused strategy for its service stations, Mobil wondered whether its convenience store business could be improved dramatically.

Diagnosis

• Convenience stores in general had become inconvenient. Parking was frequently a problem; product selection varied from week to week; checkout
  was often slow.
  
  
• Though prices had gone up, overall quality was down. Food products weren’t fresh; stores neglected basic upkeep such as changing light bulbs; cleanliness was a problem.
  
  
• Customer service was generally sub-par and unresponsive to customer needs.
  
  
• The primary customers were blue-collar men stopping by to buy cigarettes, a Mountain Dew, and lottery tickets.

Strategic Research

• A large-scale study was undertaken among a national sample of 1000 convenience store customers and prospects, as well as a study among convenience store managers and employees.
  
  
• The needs, problems, and motivations of each group were measured.
  
  
• In addition, a concept engineering study among 600 convenience store patrons was undertaken to identify the financially optimal configuration of name, service design, store layout, merchandising, product selection, and service.
  
  
• This was followed by simulation modeling to identify a financially optimal
  plan.

Strategic Options

• Mobil could get out of the convenience store business.
  
  
• Mobil could keep the stores it had and build more larger convenience store locations.
  
  
• Mobil could keep the stores it had and build more smaller, limited menu convenience store locations.
  
  
• Mobil could introduce an entirely new and different convenience store
  concept—a store that would transform the industry.

Strategic Choice

• Mobil chose the fourth option and created an entirely new convenience store concept called “On The Run.”
  
  
• The company decided to introduce stand alone stores that were separate from service stations in terms of visual and brand identity, name and color-scheme, and put the “convenience” back in convenience stores:
  
  
  • “Fast, Fresh, and Friendly”: Open, clean stores with fresh product selection and ready-to-eat items with fast check-out and helpful, friendly service.
    
  • “The convenience store where quality is the ultimate convenience.”

Performance Results

• On The Run quickly gained industry notoriety as a breakthrough concept.
  
  
• Along with industry accolades, overwhelmingly positive customer response prompted ExxonMobil to commit more than half-billion dollars over five years to expand On The Run to more Exxon and Mobil service stations.
  
  
• Same-store sales have consistently shown strong growth of more than 10 percent per year since 1998.
  
  
• There are now more than 1700 locations in 41 countries.