CHICAGO -- Frictionless stores that use technology to let customers skip the checkout line, such as Amazon Go, have dominated retail headlines for the past few months, with new stores opening almost weekly from Seattle to Chicago and New York. But it is still unclear how this new style of shopping will disrupt convenience retail, if at all. Only 5% of retailer Outlook Survey respondents plan to test cashierless checkout technology in 2019, despite recent tests by Ricker Oil Co. and a couple of pilots in California.
“Very recent history shows that companies that use technology to bring about a new experience and to challenge the marketplace can and do succeed,” says Ed Collupy, executive consultant with W. Capra Consulting Group, Chicago. He contends that frictionless-checkout concepts are not direct threats today, but that could change quickly.
AU Energy is on the forefront of tech in the c-store space, thanks to its forward-thinking CEO, Varish Goyal. The company is testing robots and artificial intelligence-driven fuel pricing, among other technologies.
Which, if any, of the following technology-based do you plan to add in 2019?
Source: CSP 2018 Outlook Survey
“I don’t want us to become a Kodak,” says Wang, referring to the former film photography giant that was disrupted by digital. “Once upon a time they were the No. 1 employer in Rochester, N.Y., and now they’ve dwindled to nothing.”
Eva Wang, CFO of Vintners Distributors Inc. and AU Energy LLC, Fremont, Calif., is bullish on cashierless technology, which has already been in practice in Asia, where she grew up. She considers Amazon Go more of a “stimulant” for thinking than a threat. That said, she believes consumers should drive the decision to offer it.
“We need to understand our customers,” she says. “It’s not what we want; it’s not a push. It’s a pull—it’s what my customers want.”
“Every in-store category is up for us and margins are strong.”
Meanwhile, those who participated in CSP’s first Outlook Survey of suppliers are confident in c-stores’ ability to adapt to change. Thirty percent considered c-stores the nimblest retail channel when it comes to reacting to changes in consumer shopping behavior. The channel was second to only one other retail channel: online.
Among competitive channels, which are the biggest threats to the c-store industry today?
Source: CSP 2018 Outlook Survey
Mark Samuels, vice president of retail operations for the Dash In c-store chain of The Wills Group, La Plata, Md., believes the c-store industry continues to have an important edge over online, however. “We’re all about immediate consumption,” he says. “If you want something right away, you’re not going to order from Amazon, especially food or beverage. People who buy from Amazon and bring food from their house to avoid c-stores, I’d argue they’re not c-store customers anyway.”
Collupy believes the industry has disrupted itself before and can do so again. “We’re not leaders on the technology front,” he says. “Yet if you look at the success that pay-at-the-pump was, why can’t we succeed at something else that’s next and be a leader?”
Next: The Consumer Viewpoint
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