Visits to convenience stores have changed significantly, impacted by safety concerns, EMV payment rules, vehicle types and so much more. In the United States, while the number of convenience store transactions decreased 13.9% in 2020, industry inside sales increased 1.5% as customers visited local convenience stores for daily shopping needs.
And, while fuel sales struggled in 2020, summer travel is here already, and the future looks bright for convenience retailers that provide fuel. Half of all Americans have or are planning their first 2021 trip between March and August, with 63% planning to travel by car.
Leading retail technology solutions provider NCR shared insights on the convenience retail industry and what technology trends we can expect to see play out over the rest of the year and beyond.
Contactless Remains King
Contactless payments, self-checkout, curbside pickup will remain mainstays in 2021. COVID-19 accelerated c-stores’ adoption of many types of technologies and practices that reduced contact between store employees and customers. Customers have liked and become used to the convenience of these practices so much that many retailers, including convenience retailers, will extend these capabilities in 2021 and beyond.
Shortly after the pandemic began, a survey revealed that 87% of shoppers preferred shopping with retailers that offered touchless or robust self-checkout options. And stores are taking note: The National Retail Federation found that touch-fee options increased for 69% of retailers in the first six months of 2020 alone.
Non-Compliance May Equal Rise in Fraud
As of April 2021, retailers, rather than credit card providers, became liable for any card fraud committed at fuel pumps that do not accept EMV payments. Even so, a significant portion of fuel industry retailers – likely about one-third – still have not upgraded their pumps to be compliant with the new rules, leaving them open to potential financial loss if their locations are compromised by fraudsters.
Fuel retailers in areas that have traditionally experienced significant card scams and fraud at the pumps, such as Florida, are more likely to have made the expensive but necessary enhancements to their pumps. Retailers in traditionally lower fraud areas have likely been slower to roll out new pumps. Rather, they have chosen to spend money on other upgrades, such as ways to improve customer experience (CX).
However, retailers in these lower fraud areas may start seeing increased theft at their pumps as fraudsters move out of areas that have already protected their pumps and customers with EMV-compliance. Since fraudulent charges cost more than an annual $200,000 per store on average, fuel retailers will be prioritizing upgrades to their card readers
Foodservice Increases in C-Stores
Many convenience stores offer hot foodservice and will continue to expand their offerings this year and beyond. In fact, significant blurring between traditional quick-service restaurants and convenience stores and gas stations has occurred and will continue.
According to NACS, 58% of c-stores plan to emphasize prepared foodservice, while 51% will focus on fresh prepared meals. Adding food can make convenience stores more than just a necessary stop: it can make the store a destination, particularly for consumers who’ve become accustomed to cutting down on shopping trips this past year.
For instance, c-stores adding hot food options include Wawa, which recently beefed up its menu with a customizable all-natural Angus burger at 920 locations and healthier fare including gluten-conscious meals and lower-sodium options at 900 stores; and Casey’s, which bolstered its offerings with cheesy breadsticks that include dipping sauce choices.
Capitalizing on Electric Vehicles
Although 1.8 million battery-powered cars are driven in the United States, there is a shortage of stations to charge them. With just 100,000 charging plugs at approximately 41,000 public stations, c-stores will be considering adding them to their forecourts to cater to more drivers and to increase sales inside stores.
Globally, automobile manufacturers have committed to spend $257 billion on vehicle electrification over the next decade, signifying that the industry is on the cusp of significant EV market growth. Ford just released an all-electric F-150 pickup truck called Lightning, while Toyota, which has yet to launch an all-electric vehicle outside of China, plans to debut two all-electric autos in the United States this year. And GM has lofty goals of being “committed to putting every driver in an electric vehicle on a scale previously unseen and bringing the world to an all-electric future.”
As such, convenience retailers that also offer fuel could do well expanding into electric charging, like Wawa has done by recently reaching its 50th EV charging station. And since charging a car takes more time than fueling one, savvy retailers will entice drivers into the store while they charge their vehicle. If that average charge takes roughly 30 minutes, consumers will be drawn to locations that offer enough entertainment and shopping to occupy their time. Think Buc-ee’s for example, which provides much more than food, fuel and clean restrooms – it’s a destination that often gets its own spot on a road trip itinerary.
And it’s not just electric vehicles making waves. Convenience retailers also need to keep their eyes on connected car technology that allows drivers to make pump payments from inside their vehicle.
Delivery Keeps Delivering
C-stores were increasingly adopting third-party delivery services before last year, but the COVID-19 pandemic propelled its growth even more. Many brands like 7-Eleven, Casey’s General Store and Circle K were savvy, looking for ways to offset declining fuel sales through services things like digital ordering and delivery – options that have become quite popular among consumers.
More recently, Walgreens launched nationwide contactless delivery in less than two hours, with no order minimum but with delivery fees that vary per location. By driving more shoppers to its website and app for delivery orders, the company can gather and analyze its consumers’ data.
Convenience retailers as a whole will continue to look to quicker delivery services as another way to serve customers and improve sales.
Consumers Crave Options
“Consumers have become accustomed to popular services like curbside, delivery, contactless and better foodservice options that c-stores increasingly offer. They’ll no doubt expect these trends to continue in 2021 and beyond,” said Paul Kern, executive director of Product Management, NCR. “The more sophisticated retailers are really paying attention to customers’ purchasing patterns and how they interact with store employees. The next step is figuring out how to get to know those consumers even better, so retailers can add more value, sell more and keep consumers coming back.”
Headquartered in Atlanta, NCR Corp. is a leading software- and services-led enterprise provider in the financial, retail and hospitality industries with 36,000 employees globally.