NATIONAL HARBOR, Md.-- An imperiled economy, gloomy consumer confidence and a weak U.S. dollar are not ideal business conditions by any American's measure. But all that be damned. The next six months offer convenience retailers the greatest opportunity for growth in the industry's history, according to Thom Blischok, president of consulting and innovation for Information Resources Inc. (IRI), Chicago.
"Seize the moment," Blischok told retailers during an 2008 Outlook Leadership session titled "Rewiring Convenience." He said, "This is a great time.… It's a bold opportunity to reinvent [image-nocss] and rethink the role of the c-store."
He suggested the world has entered a period of "global realignment," marked at home by "a transformative economy" of rising prices, remarkable volatility and newspaper headlines few prefer to see. While these and other factors may be conspiring to create new hurdles for retailers already dealing with unwanted shifts in consumer shopping patterns, they are also giving retailers the chance to grow the value of their businesses.
"The economy is changing the daily rites and rituals each of us go through," Blischok said. For starters, high gas prices have led to American consumers driving 1 billion fewer miles per month. Also, lower-priced private-label products in many c-store categories have become "an acceptable choice" for consumers, especially those with lower incomes.
The presentation was peppered with video footage from c-store shoppers of all ages and income groups talking about how and why their shopping patterns have changed in recent months. Some admitted to spending less on essentials such as groceries, meat and milk, while others said they ate out less often or bought "less of everything."
Blischok suggested the higher costs of essentials have had the greatest effect on lower-income consumers, who have had to "redefine life's basics." At the same time, middle-income consumers are making selective changes and higher-income consumers are doing "simple prioritizing" in extending their lifestyle at a lower cost. As a result consumers now look to c-stores for assortment at reasonable prices; they also place a high priority on coupons and reward programs, or what Blischok called "bribery."
"The consumer is not willing to pay for ultra-convenience," he said.
Paired with the video footage were highlights from IRI's recent survey of 1,150 distinct c-store shoppers throughout the United States. While the survey suggested many consumers had made some changes in what and where they buy—"close to home or on the way home," said Blischok—they reported no shifts in what they buy, with staples such as carbonated beverages, candy and salty snacks leading the way.
Blischok also highlighted some trends he saw as possessing great potential within c-stores: drive-thru windows and drive-thru-only stores; innovative "pod" merchandisers to shape categories into in-store destinations; vending technologies; and unique foodservice-preparation techniques or uses of foodservice theater, such as woks.
He also suggested retailers work toward the concept of creating a "third place": somewhere other than home or work that consumers see as a source of serenity and stimulation, or "a blissful place where we can simply have solace," he said. Coffeehouses and even some supermarkets have already moved into this space, and Blischok said he believes c-stores have an opportunity to do the same by becoming a source for something that is "not just beer and gas and cigarettes."
"I believe that the next six months offer retailers the greatest opportunity for growth in our history," he said. "This is the greatest time.… Live long and prosper, and may the Force be with you."As part of the "What's Right With America" theme at the 2008 Outlook Leadership, at the new Gaylord National Resort & Convention Center, National Harbor, Md., CSP Information Group's CARRE Foundation is collecting donations to benefit the USO. Click here to donate now.
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