NEW ORLEANS — Convenience-store retailers met for Winsight Media’s Convenience Retailing University, held Feb. 19-20, amid a rapidly changing retail landscape.
“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 the conference in New Orleans. “To thrive in 2020 and beyond, we need to up our game.”
Click through for six lessons about the future of c-store retail from CRU …
1. Evolving category managers
“You have to be creative and analytical at the same time,” said Crecca. “[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, 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, according to Technomic. 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.
2. Riding the M&A wave
For store operators in general, adapting amid heavy merger-and-acquisition activity is key. Nearly 30% of retailers anticipate growing their store count through mergers and acquisition in 2020, while more than 70% plan to do so via new-to-industry (NTI) sites, according to data from Technomic. 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,” said Crecca.
3. Timely delivery
Crecca said now is the time to push delivery. While c-store chains such as Circle K and Sheetz have begun using delivery services, most retailers have yet to try them—and Technomic data has found that 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.”
4. AI, safe but fallible
Jesse Hirsh, owner of Metaviews Media Management Ltd. tried to dispel myths about the role of artificial intelligence (AI) in the future. "AI is not a threat to humanity,” Hirsh said at CRU. “AI is not going to come alive. It is just a tool.” He also said that AI is only as powerful as the data fed into it. That data is collected by humans, and thus reflects human biases and errors.
5. AI and jobs
“Automation doesn’t not eliminate employment—it changes employment,” Hirsh said. He used truck drivers as an example. Truck drivers used to be mechanics so that if their truck broke down, they could fix it and continue on their haul. Today, technology has advanced so trucks don’t break down as often, and the drivers don’t need to be mechanics.
Even if a truck is self-driving, a human will still be needed in the cab to supervise the algorithm that controls the truck, Hirsh said, so technology allows us to do more with less.
6. AI and the customer experience
So how can c-stores use AI in their stores? Some companies, such as 7-Eleven and Amazon with its Amazon Go stores, are already using it. Hirsh is skeptical, however, about whether these cashierless models will work long-term for c-stores.
The customers must pre-identify themselves to download the application that allows them to enter an Amazon Go store, Hirsh said, and not all c-store consumers want to identify themselves. Also, some people want that personal touch or the feeling of a community hub a c-store can provide. To do that, there needs to be humans at the counter.
Next year’s Convenience Retailing University will be held Feb. 23-24, 2021, in Orlando, Fla. Click here for more information.