New Mexico c-store aims to expand customers' worlds.
Brown spent 25 years with Sapp Brothers Truck Stop under the tutelage of Sapp before leaving in 2008 with the intention of starting a c-store of his own. The recession crimped his plan and Brown bided his time consulting for two years until financing came through in 2010. That’s when Brown set out to create a new store, applying Sapp’s wisdom.
“Bill Sapp taught me to be conservative,” Brown says. “We won’t ever be the biggest, and we don’t want to be the biggest. We just want to grow conservatively.”
Latitudes, Brown’s convenience creation, opened in January, located where Albuquerque connects to suburb Rio Rancho. To say the least, it’s not a bad location. It sits across the street from an Intel chip manufacturing plant that employs 6,000 people, at an intersection that sees more than 70,000 cars a day. According to CNN Money, Rio Rancho is one of 2010’s top 100 places to live in America, and it’s growing fast.
“We have lots of high-paid engineers passing through and a brand new Presbyterian hospital nearby,” Brown says. “In order for our upscale convenience concept to work, there has to be certain income and traffic levels.”
This “upscale convenience concept” was inspired by Brown’s truckstop background. “Truckstops make a lot of money, because they have a lot of profit centers from within,” he says. “We knew we wanted that.”
He also knew he wanted his store to align with the desires and lifestyles of his target customers. He held focus groups to inform every decision from the ground up, and when 85% of the females in the group reported that they never set foot in a c-store unless they needed an emergency bathroom stop, he knew he needed to listen to women most of all.
“The ladies designed our building,” he says. “They told us what they wanted and we made it happen.”
To be sure, this is not your ordinary convenience store. The 15,000-square-foot building is “about the size of a Trader Joe’s,” says Brown. Its warehouse feel has what Brown describes as a “Scottsdale look to it.” Latitudes is an artwork of stucco, textures and angled rooftops. It features porcelain tiling made to look like wood underfoot and oversized chrome ceiling fans (15 feet in diameter) from Big Ass Fan Co. overhead. Its black ceilings with exposed aluminum ductwork stretch to 19 feet throughout most of the store.
And for the customer, Latitudes has a cozy lounge area with a two-way stone fireplace, four large TVs, a charging bar for up to 10 phones and laptops, free Wi-Fi, and leather couches that finish off its “Starbucks-like” look. “We can seat up to 34 people in that area,” Brown says. “We’re hoping it becomes a place for study groups and church circle meetings.”
Outside, there are 24 fuel pumps and a big brick patio connected to the store, with four large glass doors Brown opens on cool nights when the bugs aren’t bad. It seats up to 40, designed to accommodate customers who want to dine in and watch the sunset over the mountains as they enjoy food from the Latitudes bistro.
Designer Dream Team
Monica Christofferson of Carristo, a Web design and creative consulting company, took Brown’s vision by the horns. “I’m your demographic,” she told Brown. “Let me design this for you.”
Christofferson built the Latitudes branding around a logo produced by local advertising company Three Advertising. “She just nailed it,” Brown says.
After interviewing several architects, Brown decided on Devin Cannady from Cannady Architect Studio.
“There are architects out there who just kind of build square boxes and just want to crank them out,” Brown says. But Cannady wasn’t one of them. “He really sat and listened and put in a lot of time and effort.”
Zach Snyder, project manager from contracting company Brycon Construction, bought into Cannady’s innovative concept from the start. Together, the three brought Brown’s masterpiece to life.
“We tried to go with younger people, and we think that’s paying off for us,” Brown says of Cannady and Snyder, who are both under 40. Along with Christofferson, the two understood what the target demographic, also under 40, was looking for. They listened and internalized feedback from the focus groups, especially their feedback about restrooms. Natural light, private stalls with floor- length doors, granite countertops and stainless-steel sinks—they spared no expense. “We actually found that granite countertops weren’t that much more expensive, plus they last longer and look more upscale,” Brown says.
The bathrooms are also a great example of the energy efficiencies at Latitudes. They use solar powered sinks and soap dispensers. In the kitchen, the refrigeration rack recovers heat that’s used to preheat water for cooking, which is a great way to save on energy costs. The structure includes lots of small “daylight” windows around the upper perimeter of the building so interior lights don’t have to run all the time; when they do, they’re powered by energy-efficient LED bulbs.
Not surprisingly, foodservice is a key traffic driver. Brown hired a chef from Hard Rock Cafe to prepare quality sandwiches, pizzas, pastas, salads and rotisserie chickens for eat in and takeout.
“Ladies in the focus group kept talking about dual-income families,” Brown says. “Between Bobby having piano practice and Suzie having soccer practice, they get tired of feeding their kids fast food.”
Latitude’s baked ziti, lasagna and chicken fried steak are available in to-go hot boxes that can be reheated at home. So far, customer response to affordable take-home meal replacements has been good, and the restaurant’s breakfast crowd has been growing. News of the site’s pancakes, omelets and cinnamon rolls has already spread through word of mouth—and stomach.
“People are coming and saying, ‘Oh, this is different. I can get real good food here, not just slapped-together heat-and-serve stuff,’ ” Brown says. “It’s just so far from what they’ve expected.”
The product offering inside is also unexpected. Brown pulls his groceries through a grocery wholesaler rather than a convenience wholesaler, allowing him to be priced more reasonably. Two large produce tables, shopping carts and a conveyor belt sit at the checkout.
“Another thing the ladies in the focus group said was that it was inconvenient to go the grocery store to pick up one or two items during the week,” Brown says. “We don’t want to compete with the once-a-week big trip to the grocery store, but we do want to attract people who have to pick up a tomato or a gallon of milk.”
Latitudes still offers convenience items, but such fare does not define the store. Only two of its 27 cooler doors are filled with conventional sodas. The rest have ice teas, fruit drinks, lemonades, coconut waters, drinkable yogurts and milk. Latitudes’ 1,100-square-foot beer vault, called the Ice Box, is decorated with old distressed barn wood and filled with craft and imported beers.
“Once we get people inside the door,” Brown says, “they go, ‘Wow! This isn’t what I thought it would be!’ ”
Brown built the store for volume, and if the inside of the store doesn’t show it, the outside surely does. The 24 fuel pumps span a quarter of an acre, powered by a 6-horsepower variable speed motor so that even if all the dispensers are occupied, they can still pump up to nine gallons per minute.
What fueled that innovation? “Our focus group said, ‘Get me in and get me out,’ ” Brown says. He built his fuel islands wider and longer than usual so that with four cars fueling in a single bay, a pickup can still drive down the middle. The canopy is 18 feet tall, allowing for better light dispersion on the property at night. The ladies in the focus group also said that it scares them when semi-trucks pull onto the site beside them.
“It took truckstop experience to know how to make sure that other customers never even see semi-trucks fueling,” Brown says. “Here there’s no maneuvering around them. They fill up in a designated area around the back of the building.”
Another part of Brown’s fuel strategy is working off inventory rather than dealing with complex fueling contracts. “Our volume is just not going to justify us getting the discounts and contracts chains have,” he says.
His solution? Stock up.
“Putting a 20,000-gallon-tank in the ground isn’t that much more expensive than putting a 10,000-gallon-tank in the ground,” says Brown, who has a total of 80,000 gallons of storage on site. “When fuel prices are bad, we run off our inventory. It gives us more flexibility.”
He also installed a full-blown 5-horsepower air compressor to attract diesel pickups. “It doesn’t cost them anything, but it keeps them coming to us,” Brown says. “It’s been a huge selling point for us, believe it or not—free air.”
Staff and Stuff
Latitudes is a big place that’s open around the clock, and it needs a big staff. Right now, Brown employs 45 people on site, all hired through an innovative system developed by local company SolutionWerx.
“I’ve always wished I could just find one perfect employee and clone them,” Brown says. And that’s essentially what SolutionWerx seeks to do. Brown went to employees he had worked with in the past—good and bad—and asked them to complete an online test, checking boxes of words that describe them.
“It measures how proactive they are, how dominant they are, how fun they are, etc.,” Brown says. “We took our favorite old bookkeepers, cashiers, ship managers, line cooks and janitors and ran them against people we wouldn’t rehire.”
He compared those results to the same tests completed through the store’s website by 1,500 applicants, then interviewed only the top 8%. He still does background checks, but the SolutionWerx personality test helped Brown find the “right amount of leadership and autonomy” he was looking for.
The Web has done more for Brown than help with hiring. It’s also been a big part of his marketing efforts so far. “We’ve learned that social marketing isn’t like a Web page,” Brown says. “You have to be on it every day. We decided we can’t be on everything.”
So far, Facebook has been the social marketing medium he has focused on. Gas price change notifications are posted on Facebook. Brown has a goal of building up to 1,000 “likes”—from the current total of almost 400—and to do more notices about specials.
“We’re neophytes,” Brown says, “but are convinced that social media is the quickest way to reach people and get attention to drive sales. We just need to learn more about it.”
There are other things Latitudes is doing to drive sales, including offering debit and cash discounts at the pumps to save money on credit-card fees. The store offers a 2-cents-per-gallon discount for debit and 4 cents for cash. Out front, a sign flashes both cash and credit pricing. The strategy appears to be working, because cash and debit account for 70% of pump transactions.
A Latitudes rewards card earn customers an additional 2-cents-per-gallon discount, saving them a total discount of 6 cents per gallon if they use a loyalty card and pay cash. Originally Brown wanted to own and control his own loyalty system, but after researching, he determined that Pinnacle’s loyalty systems were actually the best solution for his business.
“It’s almost as robust as the Kroger card,” he says. “Inside the store we give cents off or a percentage off on everything customers use it on.”
Latitudes’ unique group of stockholders echoes the innovation and variety you’ll find there. Investors include members of the board of directors of JetBlue, a local car dealership owner, and a member of the University of New Mexico Board of Regents. (See sidebar on p. 30.)
Brown’s ability to rally support and enthusiasm from so many innovators breeds confidence in the future of his young business. He’s holding onto the “conservative growth mindset” he inherited from Sapp, but the road ahead looks bright.
The name Latitudes was selected to celebrate the newness, the substance, the spirit of adventure Brown wanted his store to embody. He wanted it to conjure up images of a globe, of travel, of the world beyond New Mexico.
Just like traveling the world, stepping into the store broadens your horizons. It challenges your preconceived notions of what a gas station is and expands the possibilities of what a c-store can be.
Latitudes’ board of advisers is full of impressive people. Ann Rhoades is one of them. Her resume includes being one of JetBlue’s founding executives; chief people officer for Southwest Airlines; executive vice president of team services for Doubletree and Promus Hotel corporations; president of consulting company People Ink, whose clients have included P.F. Chang’s and Restoration Hardware—and that’s just the beginning. Her book “Built on Values” was published last year and includes a forward by Stephen Covey. The principles it outlines are the same principles she continually advises Ron Brown, whom she’s known since his childhood, to implement at Latitudes.
“Ron has used my model of company culture and service for years in the truckstop business,” Ann says. “With Latitudes, he’s just implementing it and perfecting it from the ground up. When you walk in his store, you feel that it’s different.”
Ann’s husband, Russ Rhoades, is also on the Latitudes board. His background as a regional Environmental Protection Agency director brings a totally different knowledge base to the table.
“Honestly, it’s the best kind of board,” Ann says. “To have somebody from marketing, someone with people/ culture skills, someone from legal, finance, environmental and so on, you have an amazing combination of talents. Smaller employers like Latitudes typically don’t get that kind of expertise. It’s a real advantage.”