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How technology will change convenience retailing
NextUp foodservice locker
Photograph courtesy Apex Order Pickup Solutions

At first glance, the row of lockers doesn’t appear to be high-tech.

But when combined with artificial-intelligence software designed to provide real-time data on order status, the NextUp Smart Pickup Lockersgive their host retailers another way to differentiate themselves from the competition.

“One of the things all of us beg for every day is more time. Our solutions put the time back into the hands of the consumer to work into their busy schedules when and how they’re going to pick up their orders,” said Mike Wills, CEO at Apex Order Pickup Solutions in Mason, Ohio. The Apex system texts consumers with a locker number and secure code needed to access it. With their well-chosen locations and extended hours, convenience stores are at the top of the list of places convenient for consumers to pick up an e-commerce order, from the c-store itself or other e-commerce retailers, he said.

By becoming a destination for a new purpose, convenience stores open themselves to new customers.

“What’s in it for them is traffic. We’re creating more footfall for them, to use a British term,” Wills said. “The next logical steps are the proliferations of these systems.”

Whether convenience retailers choose to invest $20 a day to host a bank of Apex lockers or $15 a day for a Cobi 18 robot to scrub the floors to relieve team members of the less-desirable task, new technology promises to change how c-stores operate and deliver the best customer experience. As c-stores gear up to compete with more players, standing out often involves embracing innovations. Many AI advances are invisible to most people yet make a big difference.

“It’s all about exposing more touchpoints to the consumer,” said Michael Jaszczyk, CEO of GK Americas, based in Raleigh, North Carolina, a unit of GK in Schoeneck, Germany. It works with RaceTrac and other convenience stores and grocers. “Touchscreens can be more and more interactive. They’re trying to utilize that technology to influence the customers to spend more time and more money at a convenience store.”

At 7-Eleven, it starts at the fuel pump, where consumers receive prompts to purchase a car wash or a sandwich while they’re fueling, he said.

Artificial intelligence often is invisible to c-store operators and their customers, but it’s expected to play a larger role in the future of convenience retailing as operators look for ways to save time. “We don’t call it AI,” but ADD Systems automates convenience retailers’ back-office tasks, said Regina Balisteri, director of marketing at ADD Systems, a Flanders, New Jersey-based provider of business intelligence software for the fuels and c-store industries.

ADD Systems’ Atlas BI solution, which provides business intelligence reporting, does the brainwork of determining what information c-store operators most need to know. “You don’t want to look at every piece of information,” she said. “You want to see the exceptions. You want to see, where [you are] losing money? not all the places you’re making money on.”

Automation 

Convenience stores increasingly will focus on doing things faster, Balisteri said. “Any place where somebody is touching a piece of paper, that’s an opportunity for automation,” said Gray Taylor, executive director at Conexxus, an organization dedicated to tech standards for the convenience industry.

Mable, a retail-tech company based in Boston, has automated the merchandise-buying process for small grocers and c-stores and is bringing emerging local products to more locations through its efforts. We give them a super-fast way to test and learn and experiment with these local products before making a commitment to put them in the warehouse,” said founder and CEO Arik Keller. He started Mable from his own experience running Paradise Provisions, a food store in Warren, Vermont, and searching for specialty food items from smaller brands. Mable has about 3,000 active brands today and more are joining the platform every month, Keller said. It serves about 2,000 retailers who receive products like the vegan Yes Bar from a woman-owned company in California and Chunk Nibbles from Troy, Michigan drop-shipped to their locations. The platform integrates into the back end of c-stores’ inventory management systems, “so all this ordering can happen seamlesslythe billing, the ordering, the returnsso operationally chains can do this as easily as buying from one of their distributors,” Keller said.

Convenience stores like Yatco, a family-operated chain in Massachusetts, use the Mable platform to search for items suited to their customer base. “We have customers who ask us, ‘Do you have something I can feed my toddler?’ They don’t want to give them a bag of chips. This was a way for us to address that demographic and the consumer that’s looking something differentiated,” said Hussein Yatim, vice president of Yatco, based in Worcester, Massachusetts. “Introducing Mable across the chain kind of differentiates us where they can now find products like that,” he said.

Hussein Yatim  VP at Yatco

Skupos is targeting a similar market of independent convenience stores with its tech platform, which automates inventory-management and connects independent retailers with scan data programs, exclusive rebates and brand promotions, says Christine Shriver, chief revenue officer. Without Skupos’ platform, connecting to major brands and managing the paperwork involved with rebates, is an overwhelming task many don’t participate in.

The solution is helping to level the playing field for smaller companies, which are often left out of major brands’ marketing programs. The company, which also is bringing a consumer app to its c-store customers, informs the small chains with scan-data information on sales trends so they can make better decisions.

Self-Checkouts

Other retailers are relying on visual data collected and analyzed by companies like VideoMining in College Station, Pennsylvania. Its research suggests fewer shoppers are noticing merchandise in the front of the store near the registers, but this is likely change in the future as convenience retailers react to the information.

As more stores add self-checkouts, they might need to reposition some products to grow in-store sales, said CEO Rajeev Sharma. Companies like Diebold Nixdorf are presenting new ways to offer automated checkouts to reduce lines during morning rush periods. The company is teaming up with WMF Professional Coffee Machines on a cloud-based coffee self-purchasing system that lets coffee drinkers pay in advance for their coffee, then head straight to the brew machines for a hot cup of java without having to wait at the front register while juggling coffee, phone and purse or wallet. Diebold Nixdorf’s Vynamic Retail Platform uses open APIs to connect coffee machines with the store’s POS system.

Luring fuel customers from the pump to the store can be lucrative, and NCR’s in-store self-checkouts let drivers pay for fuel and c-store items in one transaction.

“Convenience stores obviously sell significant amounts of fuel. When customers need to pre-pay, any minute they spend in line waiting for a cashier is a wasted minute where a fuel pump is unused,” said Scott Sykes, executive director of corporate communications at Atlanta-based NCR. The company’s self-checkouts integrate the retailer’s fuel POS and controller systems to quicken the transaction process. During the morning rush, self-checkouts take the pressure off store associates and keep impatient customers from walking away from front register empty handed. By taking advantage of NCR’s branding editor, retailers can offer seasonal promotions from the self-checkout, Sykes said. The machines start at about $1,800, but costs can rise to $10,000 or more when remodeling is required to position the self-checkouts optimally in the store, he says.

If in-store merchandise and service doesn’t bring consumers into the c-store, fuel at a discount often will. It’s also positioned for radical change. While fossil fuels will likely command the bulk of fuel sales for years to come, new biofuel blends, electric-vehicle charging and hydrogen will round out energy offerings.

Energy Tech

The Transportation Energy Institute, formerly called the Fuel Institute, rebranded in May to reflect the future diversification of transportation energy and to avoid being pigeonholed as a proponent of any single fuel. While car manufacturers are selling more electric vehicles, EVs represent a small fraction of cars on the road, says Executive Director Jonathan Eichberger said. “Everybody’s drunk on electric vehicles. That’s all anybody wants to talk about,” he says. But the hype is leading to a distorted image of EV’s share of the market and overshadowing the importance of gasolines and hydrogen, which has the advantage of a faster refill time. He advises c-stores to be cautious about jumping on the EV charging bandwagon.

“Before you start buying equipment and installing chargers, look at your market. Are you seeing EV use? Look at car dealerships in the area, are they selling any? Do they expect to have any EVs to sell?” he said.

How soon electric vehicles will provide sufficient market penetration to justify the expense of installing EV charging stalls at c-stores depends in part on where the sites are located, said Sharon Baker, vice president of business development, eMobility at OWL Services based in Troy, Michigan. Baker is optimistic about the future of EV charging. “With the investment auto manufacturers and the marketplace have made, there is a massive macroeconomic shift that is undeniable.” she said. “So there is tremendous interest by convenience stores and fueling locations to add EV chargers.”

If they’re adding chargers, c-stores also will want to think about other amenities for the captive audience of EV drivers stopping for a charge. “We’ll see build-outs that create a comfortable seating area that invites a family to come in,” she predicted, along with higher-quality food items than what’s available at a quick-service restaurant.

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