Convenience is Kicking Back'
Inside sales rebound slightly, but competition forcing change
SCOTTSDALE, Ariz. -- Convenience stores may be rebounding from an unprecedented first-half of the year, if late second- and third-quarter figures are to be believed, according to one research firm. Trip frequency is up slightly in the second and third quarters for c-stores after declines in the first quarter, according to Kurt Orr, vice president of consulting and innovation with the Chicago-based Information Resources Inc. (IRI), who spoke exclusively to retailers at the CSP Consumer Insights Forum in Scottsdale, Ariz., earlier this week.
"Convenience is kicking back," [image-nocss] Orr told about 50 retailers and suppliers at the annual session. "That's great news, but they're still competing with other retailers-drug stores, grocery and super centers. The competition for the convenience dollar is on the rise."
In a study separate from its c-store based scanning data, IRI also collected data from 1,150 c-store consumers recently, finding that not only do 75% of respondents expect to pay more at c-stores but only a third are willing to pay more because the location is close to home.
"Convenience isn't enough to sustain meaningful differentiation," Orr said.
Though more c-store consumers in the study (35%) still claim to visit c-stores with gas for a "fast purchase," supercenters came in second with 21% and small grocery stores came in third at 16%.
Convenience is not the only factor in consumers' shopping decisions, he said, noting that cleanliness, price and quality of service ranked just as high as proximity for respondents.
Orr suggested c-stores focus on innovation to help the industry continue to differentiate itself from nontraditional competitors. He developed a brief list inclusive of the following: Drive-through windows. Increased foodservice. Innovative architecture. Technological solutions to store-level challenges such as food ordering. Shopping "pods" or display islands designed to "decompress" the shopper, provide focus and enhance the in-store experience. Vending options. Niche category opportunities. New products. Distinct changes in shopping patterns are occurring from not only the low-income demographic but even those consumers in the $100,000-plus per year households, he said, noting that retailers must begin to better understand consumer behavior and react accordingly.