NATIONAL REPORT — Even though it's been a couple of years, the convenience store industry is still seeing the effects of the pandemic, including the accelerated pace of frictionless and mobile-based technologies. In 2022, many c-store retailers focused on self-checkout options, mobile ordering and payment, and building out digital experiences. And this focus is set to continue and expand in 2023.
"Last year, we focused heavily on self-checkout and mobile ordering, adding more self-checkout units from NCR to sites, and allowing customers to order food and pick it up via mobile," Scott Smith, senior director of IT at Parker's Kitchen, the Savannah, Ga.-based operator of 74 stores, told Convenience Store News. "The goal was to expand it, but also make it one of the core features of the checkout experience for the customer."
Even smaller chains are implementing self-checkout as the cost has come down, along with more integration options, noted Steve Morris, president of Retail Management Inc., based in St. Cloud, Minn., who operates stores for single-store and small chain retailers. The company implemented Gilbarco Veeder-Root's self-checkout in one store and is looking to add that to more stores this year.
"With no end in sight for the labor shortages, I can have one person at the checkout and someone else doing other things in the store, instead of two people at the checkout and needing a third person staffed," Morris explained.
Along with self-checkout, digital and mobile will continue to be a focus in 2023, with c-store retailers looking to add "utility and value to their digital platforms," according to Jeremie Myhren, co-founder of Onramp, a Chicago-based fleet payment company, and the former longtime chief information officer of Rockford, Ill.-based Road Ranger, operator of 70 stores.
"Everybody I talk to has a top-three project centered around that because the incentive for a customer to engage in a digital platform is utility and value. People won't download another app unless it does something for them, so there are a lot of people working on that, and it's a huge draw on IT budgets," he said, pointing out that the most attended session at the 2022 NACS Show was on app development.
In Priority Order
For a majority of convenience store retailers, the new year is bringing a continuation of their technology priorities from last year, with frictionless technology, self-checkout, mobile apps, mobile payment and mobile ordering topping the list.
"We will be continuing on the mobile and frictionless route, so our customers have an easy experience interacting with mobile technology in-store, but also making it so they can get in and out as soon as possible without slowing their day down," said Smith.
While Parker's already has the ability for customers to pay for fuel, activate the fuel dispenser and order food from its app, the chain will be undertaking a marketing campaign in 2023 to increase awareness of these capabilities.
"We expanded our mobile ordering menu in 2022 and this year, we plan to enhance it and add center-store items to it as well," Smith shared, noting that the company is also investigating delivery options starting with foodservice items and then possibly expanding to all in-store products.
Mobile has become so important for all retailers, c-stores included, as customers interact with their phones more than anything else throughout the day, the Parker's executive pointed out. The goal is to get the coveted app space on a customer's phone and then get them to interact with your app.
Rob Tedesco, vice president of product at Bounteous, a digital marketing agency based in Chicago, echoes that the goal for many c-store retailers today is to create a digital relationship with customers and so, there is a universal focus right now on mobile-centric, digital experiences and integrating it all with technology. Many operators are working closely with marketing departments to have investment dollars go further, as they can begin targeting offers and rewarding customers for being loyalty members all within one app.
"What will have a profound effect on retailers in the future is owning a digital relationship with their customers and making sure all of the experiences on a site are tied together digitally, whether that is the fuel pump, a car wash, products inside the store and foodservice," Tedesco explained. "The ability for a consumer to use an app or a mobile site to pay at the pump, order ahead for prepared foods or other consumer packaged goods products, pick them up in-store or curbside, pay and get loyalty points is key for the future."
Integrating this all together will allow a chain to build a marketing infrastructure that can support it communicating with customers through email, push notification, SMS and more, according to Tedesco. What's more, capturing this data will enable the "segmenting of customers to decide who should get a certain offer or reward, and at what time," based on their behavior, likes, dislikes and other factors, he said.
In regard to self-checkout and frictionless technology, while options have been around for a while, c-stores are adopting them at a faster pace. This is not only because the technology is more affordable these days, but also because customers are more open to these alternatives on account of their prevalence in other retail channels, according to Myhren.
"We let other industries train the customer and climatize them to it," he said.
At Retail Management Inc., adding Gilbarco's self-checkout allowed the company to go from three point-of-sale registers to two, with the self-checkout being the third option; and they were able to maintain the customer count with one less employee, Morris said.
"In higher-volume stores, that is a big winner," he said, noting that self-checkout pricing has come down and is near the amount paid for a standard point-of-sale. "If a store has a good amount of volume, it's almost a must because of the staffing and labor issues in the industry," he added.
Along with self-checkout, Myhren pointed out that there is still a lot of interest in the industry around the frictionless checkout experience of customers simply walking in, grabbing items and then walking out — the way Amazon's stores operate.