Competition is driving rapid changes and spurring innovation across all retail channels. Convenience stores are no exception. The convenience store space continues evolving to meet industry trends and consumer demands.
Today, some retailers are expanding their footprints, others are narrowing their focus to niche markets, and some may even be doing both. All adapt to new competition and increase expectations around freshness, convenience and transparency.
According to The Future of Convenience Stores report by market research firm Incisiv, the convenience retail landscape is experiencing transformative convergence. Incisiv surveyed senior fuel and convenience store industry executives to understand their outlook and readiness for the future of c-stores.
What is essential for convenience store owners to note is that no one knows your customers better than you. As we look to the future, remember that the one edge this industry always maintains is convenience, and it’s powerful.
Think about your future and customers and what new ideas you can deliver to them to stand out from the competition. Your customers will reward you with their loyal business.
According to Incisiv, here are six trends worth noting.
Quick Commerce Reshaping Convenience Stores. In the era of quick commerce, convenience stores face the challenge of adapting to the rise of ultra-fast delivery. To excel, they must efficiently process orders, leverage their stores as local fulfillment centers and expand store space dedicated to order fulfillment.
This involves streamlining operations and ensuring swift order processing to meet the demands of this fast-paced environment. Incisiv reported that 17% of c-stores offer delivery/quick commerce (30 minutes or less). To perfect this growth area, retailers should optimize their inventory and ensure rapid order processing to meet customers’ needs.
From Convenience Stores to Experience-Driven Destinations. In response to evolving consumer preferences and market demands, convenience stores are evolving from traditional “convenience” hubs where quick purchases were the norm into experience-driven destinations where customers can expect more than just the essentials.
This transformation is propelled by a range of factors, including the need to allocate space for unique and diversified services and embrace EV charging solutions to meet the expectations of today’s discerning consumers.
For example, 71% of c-store executives polled by Incisiv pointed to EV as a high-growth area. To stay competitive and elevate the overall customer experience, convenience stores should explore innovative services that set them apart.
Food as the Cornerstone. Food emerges as the focal point in the ever-changing realm of convenience stores. It’s not just a change — it’s a seismic shift highlighting that food is leading the way in shaping the future of convenience stores.
To compete in this food-focused future, convenience stores must become culinary pioneers, offering sustenance and unforgettable experiences that keep customers returning for more.
As it has for the past decade, the convenience store landscape is experiencing heightened competition from various sources, including other c-stores, grocery chains and restaurants. Third-party delivery like Uber Eats and Door Dash has only enhanced this competition.
This fierce competition is underlined by an overwhelming 95% of c-store executives who stressed the importance of boosting competitive differentiation. It underscores the need for convenience stores to step up their game and set themselves apart from competitors.
Reimagine Convenience Store Space with Self-Checkout. Convenience stores are actively engaged in strategically reimagining their store space. Central to this transformation is integrating self-checkout technology, which is pivotal in optimizing store layouts and enhancing customer interactions.
This innovative approach streamlines checkout, freeing space for customer-centric areas. With the decline of traditional fixed checkout counters, self-checkout usage is increasing.
C-stores should acknowledge the decreasing significance of fixed checkout counters, with 32% anticipating a reduction in in-store space allocation for traditional checkout in the next 12 months. This shift aligns with the increasing adoption of self-checkout options as part of the store space reimagination.
Effortlessly Unify Digital and Physical Experiences. The future of convenience stores hinges on seamlessly integrating digital and physical dimensions. Shoppers no longer settle for mere transactions — they crave a comprehensive, unified experience that erases the lines between online and in-store shopping.
To meet this expectation, convenience stores must seamlessly integrate digital and physical dimensions, offer personalized experiences and establish a foundational architecture for a unified shopping experience.
This is a potential high-growth area for c-stores. Incisiv found that 67% of c-stores currently are not offering personalized promotions based on digital and in-store behavior. To meet customer expectations, c-stores should leverage data-driven insights to tailor promotions, recommendations and services to individual preferences.
Enhance Speed of Innovation and Minimize Operational Risk. The future of convenience stores depends on swift adaptation and innovation. Shoppers now demand more than mere transactions — they desire stores that can quickly experiment with new ideas, scale operations to meet market demands and swiftly respond to changing dynamics.
To succeed, convenience stores must prioritize accelerating innovation, enhancing their capacity for rapid expansion and improving their adaptability to shifting market conditions.
When it comes to experimenting with new in-store experiences, speed is vital. Incisiv reported that 94% of c-store executives emphasize its importance. However, only 30% expressed satisfaction with their current pace of experimentation. This substantial satisfaction gap underscores the imperative for c-stores to foster a culture of continuous experimentation and adaptation.
C-stores have a significant opportunity to grow sales, but it will take work.
Understanding what customers want in the future is a daunting task. In today’s post-pandemic world, with so many consumer thought processes being upended, it has become an item of necessity to remain relevant. This should present a sense of urgency for your team, while at the same time, it should be fascinating to address many operational and design changes simultaneously. It is time to look forward.
Elie Y. Katz is the CEO and president of National Retail Solutions (NRS).
