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Wawa: Rethinking the Convenience Store Experience

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What is Wawa? Technically speaking, Wawa is a privately-owned chain of gas station convenience stores. However, ask the average Pennsylvanian, and you’ll hear something along the lines of “best place in the world.” Wawa has become an iconic stop-and-shop destination for Pennsylvanians that is often cited for its excellent service, high-quality products, and fair prices. Wawa is the perfect example of a company that has been able to drive successful alignment and adaptability of its operations and business models to capture value in an underserved industry.

History

Wawa Inc. was founded in 1803 as an iron foundry in New Jersey. After almost a century of operations, the company entered a completely new industry by opening its first milk processing plant, Wawa Dairy, in 1902. Wawa Dairy soon garnered a reputation as a high-quality dairy producer, delivering products directly to homes throughout the Philadelphia area. In the 1960s, the dairy industry experienced declines in home deliveries. The company reacted by opening its first Wawa Food Market in 1964 as a dairy outlet. This store served as the basis of the existing Wawa stores today.

Business Model

Wawa convenience stores today offer made-to-order food and drinks, freshly brewed coffee, fuel services, surcharge-free ATMs, and 24-hr service 365 days a year. They own 645 stores in Pennsylvania, New Jersey, Delaware, Maryland, Virginia, and Central Florida. What differentiates Wawa from the traditional convenience store is its high-quality convenience store experience. The company has received multiple “Best of Philly” awards for its coffee and deli. It has also received top honors in Master Dairy’s Quality Product Awards. The company has created value by emphasizing quality and customer satisfaction in an industry where these elements were traditionally ignored, the convenience store industry. Traditional convenience stores relied on a customer’s need for gasoline or grab-and-go food as a pull system to bring customers to its stores, leveraging the fact that there was little differentiation in the gas station store experience. Customers chose stores mainly due to the most convenient location and/or lowest gas prices. Wawa flipped this power dynamic by focusing on the convenience store experience. Today, people choose to drive further just to go to a Wawa for their gas or food on-the-go needs.

Operating Model

Wawa has been able to achieve their business model success through the following operating model factors: emphasis on quality, continuous improvement, and the use of technology.

Emphasis on Quality

Wawa’s main competitive advantage is the quality of its products and services. In addition to traditional convenience store brands and product offerings, Wawa has created its own line of branded food and beverage products. Every Wawa store has a separate deli station where customers can get made-to-order sandwiches, drinks, and snacks. Ingredients are fresh and food is prepared at the deli station so that the customer may watch the prep operations and progress of their order.  Employees strive for customer satisfaction, and complementary items are given at the discretion of store employees in the event of an incorrect order or long wait time. The store is cleaned and restocked often throughout the day to ensure an orderly appearance and low customer wait times for products. Three of the six store’s corporate values (Value People, Delight Customers, and Do Things Right) emphasize this focus on the customer experience and taking pride in the products and services that they offer. Stores are open 24 hours a day, 365 days a year, making it a reliable go-to destination for consumers.

Continuous Improvement

Wawa’s adaptability and ability to evolve the business and operating models have been key to its ability to remain competitive. The store’s corporate values of Embrace Change and Passion for Winning reflect the company’s commitment to continuous improvement. Since the company’s beginnings, the organization has had an ability to view industry trends and react appropriately. The Wawa Food Market has evolved immensely over the years, starting with the introduction of pre-made hoagies and coffee in 1975. The company separated its deli station from its checkout counters in 1982 as a way to reduce customer service times. Camp Wawa and Wawa University were employee educational programs that were initiated to improve employee trainings. ATMs and fuel stations were incorporated in stores to further serve the target “people on the go” customer base. Product offerings have continued to evolve into breakfast options, bakery goods, and now specialty drinks (smoothies, cappuccinos, etc.)

Technology

Wawa has most notably brought technology into a seemingly tech-less industry. It is one of the first convenience stores to offer touch screen ordering of their made-to-go products, which allows for a just-in-time deli work stream. The company has also invested in network infrastructure for collecting data and tracking key performance indicators throughout the organization. The company utilizes this data to manage its day-to-day operations and identify opportunities to cut costs or further improve upon its processes.

Sources:

https://www.wawa.com/Faqs.aspx

http://www.phillymag.com/articles/wawa-world/

http://www.vykon.com/library/Wawa_Convenience_Stores.pdf

http://www.penskelogistics.com/insights/case-studies/wawa/

 

4 thoughts on “Wawa: Rethinking the Convenience Store Experience

  1. I completely agree with you about the quality products and service that Wawa delivers. To expand on your point, I think one of the most important ways that Wawa is able to ensure consistency of its products and services is that Wawa employees feel strongly that their success is closely tied to that of the company, in large part because employee owns stock in the enterprise.
    Wawa meatball subs all the way!

  2. Great explanation of how Wawa has managed to take a sector where customers typically lack brand-loyalty and gain an active support base. They certainly have differentiated themselves from competitors on product quality, but I wonder what the financial implications are of these higher than typical investments on labor and technology. Specifically, I would be really interested to see what effect the technological investments such as touch-screen ordering have had on Wawa’s basic productivity indicators such as cycle time for orders and capacity.

  3. Great submission, Sasha! As a Pennsylvanian, I absolutely loved your post! Based on my own personal experience, you did a fantastic job outlining Wawa’s operating model. What resonated with me the most was Wawa’s emphasis on quality, and specifically its operations that focus on delighting the consumer. Wawa’s key differentiating factor for me (vs. going to 711 or other similar convenient stores in the Pennsylvania area) were its employees and their focus on customer personalization and satisfaction. I knew most of the employees names at my nearest Wawa and they always went out of their way to accommodate any requests. Additionally, the quality of Wawa’s products, especially its coffee, was evident in the taste. Wawa’s convenient and quick service was also a key point of differentiation, especially given each store’s multiple POS and ordering stations. I am curious to see how Wawa adapts to new technologies (e.g. preordering on apps, etc) and how it will maintain its personal community culture as it scales.

  4. Never have I ever been happy about being in a gas station convenience store. I’m excited to stop at Wawa on my next east coast road trip. Do they plan to expand west? I also wonder if they’ve considered expanding into electric car charging. From the description above, I could see people happily waiting inside for 30 minutes for their car to charge!

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