Off the Chain: The Online Threat

Will c-stores play a role in emerging digital supply chain?

BARRINGTON, Ill. -- As formidable competitors like Amazon, Wal-Mart and tackle the challenge of the “last-mile,” home delivery of produce, perishables and yes, even convenience-store goods, c-store operators must grapple with the threat and potentially expand their role with consumers to stay viable, according to a recently released study.

Mike Lapchick Shotfarm

Tracking the growth of online shopping and companies employing either home delivery or pick-up grocery services, the study, 2015 eCommerce SuperStudy from Barrington, Ill.-based Willard Bishop, found the $25-billion business “growing and becoming more mainstream.”

What that means for c-stores remains a question, according to Paul Weitzel, managing partner at the consultancy firm. “For the convenience channel, it’s an opportunity,” Weitzel told CSP Daily News. “It’ll be hard to do it profitably—that’s the biggest challenge—but it also poses a threat in if the new version of convenience is being able to order all these [items and have them] shipped home.”

Beverages, snacks and paper products—things often found in what c-store operators call “center store”—are the main products delivered, according to the study. Fresher products or “perimeter” items like deli and meats, as well as health and beauty, rank lower in online shopping numbers, Weitzel said, but beverage, frozen and paper goods index high in the study’s numbers.

Still, while demand for online shopping and home delivery may be picking up, technical hurdles exist within the supply chain, according to Mike Lapchick, CEO of Shotfarm, a product content network company based in Chicago. He spoke of a number of archaic technologies and methodologies for communicating information about consumer packaged goods (CPGs) causing frustration among manufacturers.

While standards bodies exist, they are largely ignored by most ecommerce companies such as Seattle-based Amazon who ask manufacturers to conform to their own formats. “In today’s retail environment, manufacturers need to be able to work with multiple grocers or online delivery services each with their own formats. While standardization seems like a good idea, in reality, it’d be similar to France demanding the entire world speak French versus finding a good translation service,” Lapchick told CSP Daily News.

That said, many “neighborhood” convenience stores may find strong competition emerging from home-delivery competitors, Weitzel of Willard Bishop said. “C-stores will look at and may decide to get in the game. It’s only going to grow.”

Click here to read the first part of this report.

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