The latest senior executive hire at Caltex says a lot about the company’s ambitions to transform from refiner to retailer.

Chief executive Julian Segal has poached his new chief information officer from a Hong Kong-based retail giant with almost 13,000 pharmacy and beauty stores in Asia and Europe.

Segal is a big fan of the Asian convenience store experience and he was looking for someone with digital experience to oversee the implementation of the technology platforms needed to support his plan to build a network of convenience stores around Australia.

Caltex told staff on Friday it had appointed Viv Da Ros to the new strategic role to build  “capability in the customer-facing digital environment”.  Da Ros currently works as the group technology and process director for retailer A.S. Watson Group, which has 13 retail brands selling products to 28 million people each week in physical stores and online.

The appointment is significant for Caltex because it signals how serious Segal is about the company’s new direction. Caltex also needs executives with supply chain, merchandising and retail distribution capabilities.

All about convenience

Segal’s mantra is “convenience”. He has a vision on a national network of a new breed of convenience stores offering everything from fresh food to dry-cleaning services. Oh, and petrol of course.

The transformation will happen slowly, though. Segal is not trying to reinvent the company so much as invent a new growth stream, and he wants to avoid the mistakes Woolworths made when it opened too many Masters stores at once.

The former chemical engineer’s interest in the customer stems from running Caltex’s 650 existing sites. Segal is worried about the public’s perception of Caltex. Do they associate the brand with convenience or a Texan oil company (through former major shareholder Chevron). Focus groups have told Caltex that Australians have an issue buying food from a petrol company.

His idea has not been tried anywhere else in the world. The idea is to take the best of the best from global success stories such as 7-Eleven and Boots in the UK with Marks & Spencer-style ready-meals thrown in, along with services such as parcel delivery and dry-cleaning.

In his vision, the customers of the future will log in to their Caltex app, arrange to pick up the dry-cleaning and select something for dinner. They then drive into the Caltex site and an attendant will come to the car with everything the customer has ordered – including their favourite coffee.

Caltex needs to invest in technology to achieve all this. One model is shopping mall giant Westfield, which uses data to register customers as they walk into the store.

The initial plan is to have 10 to 20 pilot sites over the next 18 months. Segal is also thinking hard about how to brand the new venture. It probably won’t retain the StarMart brand.

The business case makes sense when you consider that what Australians per capita spend on convenience is one-sixth of what is spent in the UK.

Caltex has 650 sites but only half to two-thirds of those will be suitable for the convenience version. Caltex can always acquire more sites –  something it is considering with the potential $1.5 billion acquisition of Woolworths’ fuel outlets.

Extracted from the Australian Financial Review.