October 5, 2022
Every corner of the retail universe is experiencing disruption, but for convenience stores, the change feels particularly acute.
Innovative startups and legacy giants are jumping in feet-first to meet a new kind of c-store consumer. They’re investing in cutting-edge technology, switching up their store formats, and doubling down on delivery options.
Recently we nabbed a front-row seat to some of GroceryShop’s most coveted c-store-focused sessions. Here are three big takeaways:
Gone are the days of the C-store as a daily stop during a customer’s commute. For one thing, remote work policies mean folks aren’t commuting that much anymore. Those that are either driving electric vehicles or embracing rideshares to combat rising gas prices. All this adds up to fewer stops at the pump.
Beyond fuel stops, c-stores have traditionally been a source of quick snacks and guilty pleasures: cigarettes, potato chips, and 32 ounces of Mountain Dew. But today’s health-conscious consumer cares more about their waistline and lifespan and is forgoing their “cokes and smokes” in favor of healthier, fresher alternatives.
So, how do you accommodate the new c-store customer?
Chris Edwards, Head of GetGo Technology at Giant Eagle believes that c-stores should offer more than just the expected necessities. “You have to create an experience,” he said, “and that’s not easy to do.”
Edwards cited one upside of the EV revolution: “It takes longer to charge an electric vehicle. How do you accommodate that type of shopper by increasing what you’re offering them?” New activations like laundry drop-off, Amazon pick-up lockers, and even ‘Red Bull bars’ are just some of the creative ways c-stores are looking to create memorable experiences for customers – and keep them in the store longer.
Not necessarily. With rising inflation, consumers are less likely to pay a premium for ultra-fast delivery. In fact, Fidji Simo, CEO of Instacart, went as far as to say she “[doesn’t] believe that the 15-minute grocery delivery model on its own is really a sustainable thing.”
Nonetheless, delivery options are table stakes in the new evolution of the c-store. 7-Eleven, in particular, has a lot of learnings. The brand recently launched it’s 7NOW app to meet evolving customer needs: Through 7NOW, over 3500 7-Eleven stores deliver snacks, alcohol, and fresh foods to customers in under 30 minutes.
Raghu Mahadevan, SVP and Chief Digital Officer at 7-Eleven, explained that the launch of 7NOW wasn’t a cure-all when it came to meeting customer needs. Ultra-fast delivery solves a subset of c-store customer use cases – the customer who forgot an item, the customer who is unable to leave the house – but not all of them. “You can’t sacrifice the in-store experience to optimize delivery,” he warned. “A walk-in customer’s experience should not be distrubed by delivery fulfillment.” With small footprints, c-stores lack the flexibility for fulfillment that larger grocery stores enjoy. Just one employee filling up a cart with delivery orders has the potential to seriously impede on a c-store’s walk-in customer experience.
Ultimately, successful c-stores won’t leap towards delivery at the expense of their brick and mortar locations. “When operations in-store are seamless, the rest will fall into place,” said Mahadevan.
90% of a typical customer’s grocery items are, well, purchased in a grocery store. That means the competition for that remaining 10% is downright fierce. A solid loyalty program can guarantee a c-store sees that extra traffic heading to their locations week after week.
As the lines between e-commerce, delivery, and QSR blur, Casey’s is a standout example of how c-stores can capitalize on all three to drive customer loyalty. Three years ago, the company re-launched its rewards program and mobile app, enabling customers to earn points on gas purchases that they can then use towards Casey’s (coveted) pizza. And vice-versa.
That “pizza halo effect” works. “We have over 5.5 million rewards members who spend 12% more per visit than non-members,” boasted Casey’s President & CEO, Darren Rebelez. What’s more, Casey’s rewards members can opt to spend their points on a more feel-good cause, turning them into “cash for classrooms” donations. In this way, Caseys not only gains loyal customers but breeds goodwill in the local communities they serve.
At Groceryshop, Foxtrot – an elevated c-store known for their highly curated brand selection – announced the re-launch of their new loyalty program. Aptly called Membership, the program gives customers early access to new products, free monthly drinks at Foxtrot’s cafes, and even perks like free popcorn after 4 p.m. As a bonus, Foxtrot’s loyalty program doubles as a highly effective customer research tool. Customers can purchase items in the store via the app, giving Foxtrot access to valuable buying behavior insights. “For instance, we know when a customer comes in, buys something for the first time, and then doesn’t come back to buy it again,” said Foxtrot Co-founder & CEO Michael LaVitola.
In the conference’s final keynote, Krystina Gustafson, SVP of Content at Groceryshop, said she believes that “convenience stores will be the next digital adopters,” leading the way in defining convenience through digitalization. We’re inclined to agree.
No longer simply roadside stops for refueling, c-stores are the center of the grocery revolution. Customers aren’t commuting, they’re eating healthier, they’re looking for (even more) convenience – and with all that disruption, c-stores have to change the way they sell their products. The ones that don’t, won’t survive.
The good news? C-stores lack the complexity of large-scale grocery stores – butcher counters, fresh produce sections, etc. – that require more specialized workforce management capabilities. C-stores don’t necessarily have to stand up their own e-commerce sites and can easily employ third-party providers (like DoorDash or Instacart) to fulfill their delivery capabilities. Without these concerns on their plate, c-stores have the resources and capital to invest in customer and employee-facing technology improvements.
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