NEW ORLEANS —Now more than ever, convenience-store operators are navigating new economic, consumer, market and category dynamics that may define the success of their business. Combined, these create unique challenges beyond those of the traditional c-store model.
“The new definition of convenience is grounded in the consumer demand not only for speed and ease but for access,” said Donna Hood Crecca, principal with Technomic, Chicago, during this year’s Convenience Retailing University conference in New Orleans. “To thrive in 2020 and beyond, we need to up our game.”
For starters, the convenience-store category manager is constantly evolving. What used to be a tactical, often siloed role is now strategic and integrated with the rest of store operations, Crecca said. These individuals must use shopper insights, market metrics and product customization to succeed in today’s changing landscape.
“You have to be creative and analytical at the same time,” she said. “[Category management] is far more complex than in the past.”
Today’s category managers must make their sectors more appealing to consumers to ultimately drive visits. While nearly two-fifths (38%) of c-store operators said their foot traffic increased in 2019, according to Technomic, almost three-fifths (58%) of customers—including 65% and 63% of Gen Z and millennial customers, respectively—don’t enter the store at all when filling up on gas. They say they simply don’t have the time to do so. Category managers and operators must be flexible and creative in their approach to new products and operations, Crecca said.
For store operators in general, adapting amid heavy merger-and-acquisition activity is key. Nearly 30% of retailers anticipate growing their store count through M&A in 2020, while more than 70% plan to do so via new-to-industry (NTI) sites, Technomic said. Increased acquisition activity makes it crucial for retailers to adapt to uncertainty with new brand and leadership change occurring, Crecca said.
“To impact these changes, you’ll need to be innovative and lean on your supplier partners to work through these transitions and come out stronger on the other side,” she said.
Now is also the time to explore delivery. While c-store chains such as Circle K and Sheetz have begun using delivery services, most retailers have yet to try them—and their customers don’t want to use them. More than half (52%) of consumers said they would not consider ordering from a c-store via delivery, while 34% said they would never consider it, according to Technomic. Despite this, it’s vital for c-stores to implement delivery to become top of mind among their customers, especially for foodservice, Crecca said.
“Delivery is not going to go away,” she said. “As c-store retailers, you should be evaluating different delivery models, from food sourcing and storage to handling to packaging.”
Innovating around consumer demands, adapting to market trends and management changes and having an execution plan may set a blueprint to drive successful c-store operations in 2020, Crecca said.
“You have to be able to, for lack of a better term, roll with it,” she said. “But you must also have a contingency plan in your back pocket that will allow you to pivot quickly and redirect as needed.”
Next year’s Convenience Retailing University will be held Feb. 23-24, 2021, in Orlando, Fla. Click here for more information.