The Future of Convenience Stores Is Here
The future is here and wow, did it get here fast! COVID accelerated what was already a changing landscape for convenience store operators and customers — digital ordering, third-party delivery, more fresh food options, a decrease in fuel consumption, and the list goes on.
Convenience must be put back into c-stores because it is consumers’ No. 1 expectation. These changes are here to stay and will continue to shape the industry for years to come.
As convenience store operators and customers begin to look toward the future and wonder what the post-COVID customer experience will look like, it is certain the landscape of operational and customer experience has shifted. The rise of work-from-home models, stay-in and order delivery, and heightened expectations for fresh food and better hygiene are pushing c-store operators to reevaluate customer service techniques. C-store operators can use these insights to help mitigate the ever-changing retail landscape.
One major change that c-stores are facing is the decline in fuel-based profits. According to the NACS State of the Industry report, prepared food is the largest gross profit driver for c-stores, as foodservice generated 34.5 percent of in-store gross profit dollar sales in 2020. This trend continues to shift upwards, while fuel-based profits lag behind.
Fresh Food to Replace Declining Fuel Revenue
This decline in fuel-based profits is due, in part, to a decrease in travel. The future will see more plug-in and hybrid cars, but the challenge to replace lost revenue is already here.
Creating a signature fresh food item that consumers gravitate toward provides great opportunities for delivery and takeout customers who will not hesitate to increase their basket size. Higher-margin items will be added to orders for the convenience of delivery, initiated by the desire to have that signature fresh food item.
As customers spend more time on-site, c-stores will be expected to make operational changes in order to improve the overall customer experience. Customers are no longer satisfied with quick grab-and-go food options. C-stores need to offer freshly prepared food selections, in addition to a broad range of convenience items in order to create a competitive advantage and expand customer reach.
This increased demand for healthy, plant-based and international flavor options will also require a larger footprint and dedicated resources. Commissaries and ghost kitchens will become the norm. New store designs with sit-and-eat options will emerge to support the customer experience. Bright, clean and updated store exteriors with outdoor seating options and enhanced curb appeal will also attract customers and encourage them to spend more time on-site.
This new expectation for fresh prepared sit-and-eat food options also provides an opportunity for c-stores to build a positive and unique brand identity through the types of foods made available to diners. Customers make connections with food. Unique, high-quality food can have a lasting impression on consumers, which can help establish a loyal customer base.
To further build on this loyal customer base, c-stores should consider offering delivery services. The COVID-19 pandemic sparked an influx of companies offering delivery services, and the idea that delivery can only be utilized by restaurants is a thing of the past.
The introduction of delivery services will not only open a new revenue stream for store brands, but it will also broaden the store’s customer reach by providing access to the foods their customers have come to know and love, whether on-site or off-premise. Basket size will increase due to the convenience and the fact that a fee is already being paid for delivery.
Access to mobile ordering and touchless technology will also serve as a catalyst for the future growth of c-stores, although shifting operations toward these changes may not come easy.
To successfully incorporate mobile ordering into daily operational processes, store operators will need to create a designated drive-thru or pickup point. Managing these new processes will require additional training and staffing needs.
Customer experience will continue to play an increasing role in the future of c-stores. Extended time on-site and the introduction of new and improved operational practices means new customer interactions and varying touchpoints that staff may not be accustomed to providing.
Partnering with a third-party assessment program can help store operators assess customer experiences such as wait times, store interactions, brand standards and cleanliness on-site, while also assessing customer satisfaction off-site with delivery assessments and industry benchmarking.
These programs also help ensure seamless execution of food safety and operational excellence standards by all employees and across multi-location stores. Access to this unbiased feedback will help mitigate risk, increase guest traffic and drive sales growth, creating peace of mind for store owners and a cohesive brand experience for new and returning customers.
Alex Myrick is vice president of Steritech. He currently leads its national sales team, helping multi-location businesses deliver their ideal brand experience through assessment and consulting solutions that accelerate growth, drive operational consistency, and mitigate risk. Myrick is a 32-year restaurant and hospitality veteran who has worked as a franchisor, franchisee, independent owner, and sales and marketing executive.
Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.