C-store Retailers Up Spending on Consumer-Facing Tech

JERSEY CITY, N.J. -- As consumer interest and adoption of technology continues to explode at a rapid pace, today’s retailers are investing time and money to keep up with and capitalize on this growth. For the convenience store industry, tech concerns run the gamut from consumer-facing technology, such as mobile payments, mobile applications (apps) and text marketing to the corporate and store systems running behind the scenes that keep them operating every day.

The growth in consumer-facing technology is evident in the number of c-store retailers investing in mobile apps and payments, loyalty programs, social media and text marketing. The 2013 Convenience Store News Technology Study shows that more than 90 percent of chains with 51 or more stores utilize some form of social media, and more than half offer a mobile app to customers.

Marketing via text message grew from 17.2 percent in 2012 to 23.4 percent this year, with more than 20 percent of all study respondents reporting plans to introduce the technology this year. Meanwhile, 60 percent of all operators currently offer a loyalty program at their locations.

The technology to watch appears to be mobile wallets, as more than 30 percent of operators plan to roll out this option in 2013.

Overall, investment in technology is widespread throughout the convenience channel. A total of 88.2 percent of c-store companies said they budgeted for technology and automation in 2012, spending an average of $1.9 million and a median of $100,000. For companies with 51 stores or more, 100 percent invested in technology, averaging a $7.7-million spend. By comparison, 79.5 percent of chains with two to 50 stores invested an average of $226,541 per company.

Of those investing, half of the budget (52.7 percent) went to capital expenditures, such as equipment, and just under two-thirds spent this to replace older equipment. For larger chains, this number jumped to 82.6 percent, compared to those with between 20 and 50 stores (at 53.5 percent). The majority of the money went to store-level technology (65 percent) vs. headquarters (35 percent).

For the remainder of 2013, 30 percent of all respondents said they will spend less on technology this year compared to 2012, but this figure is driven almost entirely by smaller chains of between two and 50 stores. The majority of retailers with 51 or more locations plan to either spend the same amount or more this year.