What do horse drawn wagons, electric and gasoline cars all have in common?

03/14/18

 

What do horse drawn wagons, electric and gasoline cars all have in common?

By Mark Radosevich

 

While driving through a small town near my office the other day, I was surprised to see an Amish horse and wagon tied to a hitching post beside a dollar store.  On the way back, I pulled in to further investigate the situation.  The manager explained that they were experiencing a growing level of Amish customers arriving by horse drawn wagons and they wanted to make it easier for them to stop and shop.  Thus, they installed the hitching post to accommodate these new customer requirements.   I stifled the urge to ask her if there is an approved hitching post vendor list or if the installation process is now part of the chains official operations manual.  It did, however, get me thinking about the fact that a national chain store was willing to accommodate a horse drawn mode of transportation. 

 

Right now you may be thinking that Radosevich has finally lost it or in the least, has way too much time on my hands to be investigating why an Amish wagon was tied to a dollar store, but there’s a method to my madness…or at least I hope you think so by the end of this piece.  Anyway, last year I wrote an article about the growth of the dollar store industry and the potential negative impact to the c-store business.  Seeing the wagon and the accommodation that the store offered those customers got me thinking about the commonality of horse drawn wagons and gasoline and electric cars.  The answer is simple…they all have four wheels and are modes of transportation.  That’s it.  All three are designed to move our posteriors from A to B and the fact that an electric car and a gasoline car look the same doesn’t make them the same. 

 

This fact has been lost on many of us in the retail petroleum business, as electric cars have as much an affinity for petroleum as horses and their wagons do…none, zilch, nada.  Yet many in our industry still delude themselves in thinking that as the electric vehicle industry expands, recharging said vehicles will naturally migrate to retail petroleum facilities.  Using the hitching post as an example, the dollar store was able to naturally accommodate a customer need as it arose.  What’s to stop them, or another retail business with wide coverage to adjust their focus to accommodate the recharge needs of the electric motoring public?  As an aside, the words “motoring” or “motorist” actually better fits an electric vehicle, as it’s powered by a motor and not a combustion engine.  Historically, the petroleum industry should have been referring to its customers as “engine-ists” to better align with a gas vehicle’s means of propulsion.  Doesn’t seem to flow as well though…but I digress. 

 

Ignore for a moment the current demographic differences between electric car owners and dollar store customers, and simply focus on the big picture.  Capturing this growing market segment seems much easier for retail businesses that are not burdened by the baggage associated with c-stores in terms of underground storage tanks, fuel dispensers, piping and the related environmental and regulatory considerations.  Companies that have not taken the leap to fossil fuels like dollar stores, QSR’s or maybe a new retail incarnation that I just came up with five minutes ago, the Redi-Watt Chargestop.  Not to be confused by that little electric guy of the 1930’s, Reddy Killowat.  He’s an old cartoon character and not a fast growing, potentially profitable electric charging business… but I again digress.    

 

Here’s the point, the infrastructure required to set up recharge centers is diverse and much less expensive than that of the oil business, and it is a fallacy to assume that the c-store industry can turn on a dime and capture this market when critical car-count mass is achieved.  Many current retail sites will be constrained by facility layout, property size and other limitations.  For interested c-store operators, the first step is to conduct a comprehensive investigation to determine if this is a business worth getting into, and if so, where dollars should be invested using the 80/20 rule (80% of all electric vehicles will recharge at 20% of currently available sites). 

 

I don’t believe that electric vehicles will overtake the combustion engine in our lifetime or that the traditional convenience store industry is going to be seriously challenged.  I do believe that electric vehicles are here to stay, vehicle counts will grow and demographic adoption will diversify.  If traditional convenience store operators want to capture a significant share of the future recharge market, serious long term planning needs to take place including probable growth patterns (urban and suburban in the beginning), new facility designs, existing facility modeling to determine optimal candidates for retrofits, and a budgetary commitment to produce meaningful and sufficient scale. 

 

Late last year Ikea department stores committed to installing charging centers in 355 stores in 30 markets.  This is just a drop in the bucket but a clear indication that other non-petroleum retailers are beginning to grasp this untapped potential.  It probably won’t be long until larger non-petroleum regional or national chains leverage their coverage and strive to become recharge destinations of choice.   This is clearly a business model in flux where the exact retail solution is not yet determined.  And finally, for all my industry friends, give me a call if anyone wants to license my Redi-Watt Chargestop concept or order a Made-in-America Wild West Hitching Post kit.

 

Mark Radosevich is a strong industry advocate and recognized petroleum veteran, serving both oil companies and marketers over his long career.  He is president of PetroActive Real Estate Services, LLC, offering confidential mergers & acquisition consultation, representation and financing services exclusively to petroleum wholesalers.  Mark can be reached by email at mark@petroactive.net and directly by phone at 423-442-1327, his full professional bio can be found at www.petroactive.net.

 

(Visual caption):  Amish wagon visiting a dollar store in Englewood, Tennessee.