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Era of Disruption: Reflect

Personalizing inventory and amenities to keep up with the times
Illustration by Guy Shield

CHICAGO — Faster and better-operated stores are always optimal, but speed is only one factor in the fast-changing world of retail. “The consumer expectation of the in-store experience has changed quite a bit,” says Donna Hood Crecca, principal of CSP sister data firm Technomic.

But uncertainty remains despite action from chains to change with the times: Eighty percent of brands surveyed said they are concerned about their organization’s ability to ensure their stores will be relevant to customers five years from now.

Some stores are working to personalize their inventory and amenities to keep up with the times.

“Being more relevant [means] expanding your offerings and getting into more segments—having more of what everybody needs in the store,” writes one retailer participant. “You can’t be a supercenter, but you have to have what your customers need. [Stores] can’t be one size fits all—can’t do the same thing in every store.”

Crecca points to industry competitors, especially dollar stores, as another factor pushing convenience to better understand their customers to more effectively fulfill their needs. Now that dollar stores have cracked the code of catering to lower-income consumers, they are starting to attract high-income consumers looking for deals, she says.

Another existential threat to the industry is declining fuel demand as consumers drive less and in more fuel-efficient vehicles. And labor costs continue to rise in a tight labor market with plenty of competition for jobs. “The biggest threat is an increase in cost of labor,” writes one small-chain respondent. “We cannot take on a 50% increase in labor [costs] and still deliver on the customer experience.”

Improving the in-store experience with labor-saving food-ordering kiosks, mobile ordering and other tech amenities is one path forward, but it might not come cheap. “The elevation of tech is obvious, which rolls right back into the implications for cost,” Crecca says. The transition from the gas, Cokes and smokes model might require stores to be built with wireless connectivity in mind. Stores might need different electrical systems to handle an influx of internet of things devices. Some parking lots and layouts might need to be built to accommodate delivery or curbside pickup.

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Numbers add up to more than 100% due to rounding

Both consumer sentiment and consumer-facing tech are already changing, Crecca says, and that’s not stopping anytime soon. “E-commerce is not a trend, it’s the norm. Gen Z isn’t coming— they’re here now. Immediacy is a part of their consumer psyche,” she says, and retailers both offline and online are moving to meet that consumer-driven need for immediacy.

The Federal Aviation Administration has already issued a certificate giving Amazon Prime Air—Amazon’s plane-delivery arm—permission to operate unmanned aerial drones. The drones will be built to fly 15 miles to complete 30-minute deliveries of small packages weighing no more than 5 pounds. Amazon could launch the flying drones “within months,” according to a recent Amazon blog post. This initiative and others like it could change the norms of e-commerce all over again, and more innovation is sure to follow.

Crecca says c-store retailers need to consider their business through a long-term lens and ask if they will be relevant next year—and in 15 years. “From now on,” she says, "the only constant is disruption.”

Return to full Era of Disruption report.

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