Educational sessions help retailers navigate all areas of the c-store business from foodservice to technology.
By Erin Rigik Del Conte, Senior Editor
The National Association of Convenience Stores (NACS) Show kicked off on Tuesday, Oct. 17, with a number of educational sessions that spanned every area of running a c-store from leadership to foodservice to technology.
“Convergence on Convenience: Maintaining Our Ownership of Convenience at a Time When Every Retailer is Striving to be More Convenient” was one such session that explored how c-stores can maintain their advantage in an age when convenience is a customer mindset rather than a location.
Moderator Bob Graczyk, human resources, QuickChek Corp. and Speaker David Portalatin, vice president, food industry analyst, The NPD Group Inc., outlined how the retail landscape is evolving.
“How do we maintain our ownership of convenience when others are striving to do the same?” Graczyk asked the audience.
The session looked at the history of convenience, examined what disrupted retail is and what the future looks like for a traditional brick and mortar environment. It also examined the businesses that have managed to survive the storm in other channels and what they did differently.
It’s not doubt consumer perception of “convenience” is changing. Portalatin explained how the 2000s brought the first evidence of quiet change. More Americans started working from home. Fresh foods started gaining share after decades of decline. Healthy snack foods surpassed indulgence snack foods. He pointed out that anyone under 40 today is eating fresh foods at a 26% higher rate than anyone else.
But restaurants aren’t growing the way they used to. Traffic growth at 1% or below has become the new normal in the restaurant industry.
We have 2.5% fewer annual meals occasions compared to a decade ago and while retail and restaurant sales are not growing, online is taking a greater share. Today 7% of customers are buying groceries online and 5% are using subscription meal kits. Consumers today want items brought to their door.
“Digital ordering is not creating demand, it’s just changing the way we access locations. Those who do digital well are the ones (thriving) in the marketplace,” Portalatin said.
Increasingly consumers want to eat at home, regardless of where the food is sourced. Why? More people are working at home and it’s becoming less expensive to eat at home. Netflix and other streaming services mean more people are deriving entertainment at home.
“Home is where it’s at. I would challenge you to figure out how to get into the home because that is where growth is,” Portalatin said. While convenience will always be an important part of the value equation, how we access convenience is changing.
Where all of this is ultimately leading, Portalatin explained, is to a world where digital commerce creates data that allows us to know the customer and provide automatic replenishment of products—right before customers run out—which will disrupt retail traffic even more.
Surviving Disruption
Some businesses in other channels have been successful even as their industries changed due to e-commerce. Ulta, which provides beauty products, has succeeded by offering a balance of mass merchandise and prestige items, and brands as well as private label, all in one location. It also focuses on the experience, which is a key trend today. Demonstrations, makeovers and an in-store salon help activate the “experience” for customers.
Meanwhile, Best Buy survived by staying competitive with Amazon on price, using expertise as a differentiator and focusing on solving problems for customers. It also turned to a showcase and ship model.
Grocery chain H-E-B is offering online ordering with hourly delivery. It’s also offering plated dinners with wine pairings in store and chefs that offer teaching demos.
“How can (convenience stores) create an experiential instagram-able experience?” Portalatin asked the audience to ponder.
A few strategies include embracing technology, creating an experience and exploring service or solution offerings.
