Pioneering the Way to Differentiated Services

In December 2019, Global Views Monthly announced the results of its Service Force Evaluation. For the eleventh-year running, FamilyMart took the crown, attesting to the convenience store chain's commitment to continual improvement of its front-line service force and sensitivity to consumer needs. FamilyMart has also been restructuring its fresh food operations and introducing digital technology to lead the industry in differentiating services.

"FamilyMart is orienting towards healthier and safer goods and services. We also look forward to the ongoing partnership and friendship-based cooperation with THL to tap emerging opportunities in the health food sector."

Taiwan has more convenience stores for its size than any other country apart from South Korea. "Taiwan may not have the highest density of convenience stores, but we are definitely the strongest on 'functionality'," says FamilyMart Fresh Foods Operations Manager Huang Cheng-tien with pride.

In the new era of bricks and clicks retailing, FamilyMart has always been at the forefront in understanding consumer demand. The company has created a rich product mix to meet this demand, while also targeting quality-oriented customers to differentiate its services. In recent years FamilyMart has also advanced in the digital sphere with an industry-first digital membership system, technology concept stores, and a pre-order app. It is also leveraging big data and smart equipment to usher the convenience store industry to new ground.

"FamilyMart and THL cooperate closely and have partnered on a number of creative marketing plans," says Family Mart Product Department Manager Wu Ya-ching. Notable examples of this partnership include FamilyMart's recent limited release of Energizer battery cloud-shaped night lights, Tabasco-flavored popcorn, and cartoon-branded products.

"With 3,606 stores, FamilyMart may not be the biggest chain, but our image and reputation among consumers have been rising faster than our new store openings," says FamilyMart Fresh Foods Operations Manager Huang Cheng-tien. FamilyMart is committed to creating a new retail space and fresh food is an important battlefield. FamilyMart's fresh food operations have been especially notable in its the three hero product lines: "gold" (golden sweet potatoes), "black gold" (fresh-brewed coffee and tea), and "platinum" (bread, toast, sandwiches, and frozen desserts).

The key to this success is closely related to a recent restructuring of FamilyMart's fresh food business. Huang Cheng-tien, who went to Japan to study the chain store market there, says that Japan was early in restructuring its fresh food operations. Data from 2000 to 2015 show that the 100% revenue growth in Japan's convenience store industry during that time owed almost entirely to internal restructuring, with fresh food proving to be one of the most effective areas to differentiate.

In the pursuit of better tasting products, excellent ingredients, equipment, and partners are indispensable elements. "THL and FamilyMart are close partners. THL provides us with analyses of market trends and consumer purchasing behavior, as well as effective product development and plans," says Huang. Citing the example of Lee Kum Kee XO Sauce, he notes that THL not only provided raw materials, but also recipes and other information to accelerate product development when FamilyMart introduced its line of onigiri, sandwiches, risotto, and other fresh foods.

2018 April, FamilyMart and THL teamed up to take aim at the NT$50 billion fresh-brewed tea market with the launch of Let's Café × TWININGS. The cobranded tea venture with Twinings, a British supplier of tea to the royal family, was an instant hit. Sales boomed to over four million cups a year, or more than 10,000 cups a day on average.

Huang Cheng-tien is also impressed by THL's ability to respond proactively and efficiently to channel demands. "Sales of Twinings fruit teas exceeded expectations from the moment the line launched. Single store sales averaged a dozen or so cups and we were quickly selling over ten thousand cups a day. Fortunately, THL's team was quick on its feet and immediately ordered emergency deliveries from various channels. They even had supplies air and sea shipped to keep up with FamilyMart's demand. This was a truly impressive and admirable feat."

As to the road ahead for cooperation between the two sides, Huang Cheng-tien believes that increasingly health-conscious consumers will drive one of the most important trends in the food chain retail industry. In 2018, FamilyMart introduced the Clean Label system, first on its private label and later on extended to cover all fresh foods. It currently has more than 230 Clean Label certified products. Huang Cheng-tien says that FamilyMart is orienting towards healthier and safer goods and services. It also looks forward to an ongoing partnership and friendship-based cooperation with THL to tap the emerging opportunities in the health food sector.