Are C-Stores Losing Out as Consumers Embrace Delivery?

Retailers face questions of logistics as definition of convenience expands

RANCHO PALOS VERDES, Calif. -- With online retailers such as Amazon and Instacart, along with Walmart and major grocery chains, all competing in the home-delivery space, convenience-store retailers are being forced to consider the idea of becoming “logistics and fulfillment” companies, according to the opening speaker at CSP’s annual Outlook Leadership conference.

To address the issue, CSP and its sister data research firm, Technomic, conducted a study of 2,000 consumers ages 16 and older who visited c-stores frequently to gauge their interest in home delivery and their use of technology to access goods and services, said Donna Hood Crecca, principal for Chicago-based Technomic.

“Your consumer is very connected: A majority of convenience-store customers use smartphones, computers and tablets,” Crecca told an audience of about 300 attendees. “And that connectivity is used to access a range of products and services.”

The unfortunate news for c-store operators is that a quarter of consumers overall who engage in ecommerce said they are going to c-stores less often as a result, Crecca said. Citing the CSP-Technomic study Winning the War for Convenience, she said younger consumers were especially open to choosing home delivery over a visit to a c-store, with their choice of delivery provider being online retailers, warehouse clubs, grocery stores and mass merchants.

Some of the main qualities of c-stores today—namely speed and ease of the shopping experience—are still important for all c-store customers, but the priorities of ease of navigation, quick purchase and the ability to get in and out are more important to older customers, she said.

Younger people also prioritize in-store technology, such as self-checkout, kiosk foodservice, mobile ordering and payment. Gen Z consumers are especially fond of technology, being the first true “digital natives” who were born into an age of connectivity and immediacy.

Millennials also are connected to e-commerce, with eight out of 10 becoming parents. “They’re juggling work, family, social interactions and engagement,” Crecca said. “When life gets hectic, the need for speed increases.”

As c-stores grapple with whether to or how to engage in the delivery game, “the important thing to understand is that it’s not an insular initiative,” Crecca said. “There’s a lot of aspects to it. It really involves logistics and fulfillment, essentially bringing product to consumers at an off-premise location.”

Many companies excelling in delivery are simply not retailers, she said; they do logistics. So c-store operators need to know that “delivery needs to be a component of their broader e-commerce effort. It’s their app, their website, marketing, procurement, distribution—it’ll take having that mindset to be successful.”

The CSPOutlook Leadership conference is being held Aug. 19-22 at the Terranea Resort in Rancho Palos Verdes, Calif. Next year’s Outlook Leadership conference will be held Aug. 11-14, 2019 at the Omni Grove Park Inn, Asheville, N.C.

Photograph of Donna Hood Crecca by W. Scott Mitchell

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