The Future Is in the Details

You can't see everything at once.

When I was a child growing up in central Texas, I would often find myself looking at the ground. Usually, this was because I had dropped something but, often, it was just because I found it fascinating. I would be on the playground or in a field and when I looked around, I could see the large objects — clumps of grass and rocks — and everything in between was barren dirt. But, if I stayed still and really focused on the ground, I would start seeing signs of life and movement.

A variety of insects emerged and started going about their daily survival efforts. Passing clouds changed the shadow and light and created a kaleidoscope of landscapes. The breeze created movement and rearranged the terrain. A world existed where it looked like there was nothing. The big picture was stationary, but the detail showed the change and movement.

I had the chance to attend the 2022 NACS Show in Las Vegas this year. For me, it is the preeminent event on the convenience retail calendar. There are many reasons to attend the show: seeing friends, networking, the educational sessions, talking to vendors to take care of business, and trying to see the new products and trends that are affecting the industry.

I am writing this column from the floor of the NACS Show — literally. My feet are killing me from walking around the exhibition booths, so I am actually sitting on the floor of the trade show. It's been a great show and, for those of you who were not able to attend, I will attempt to give you an overview of my impressions during the last few days.

I think it's safe to say that the NACS Show is back in full force. There were a lot of people and a lot of activity, combining to make the trade show and its surrounding events interesting and exciting. I felt that, even though there was a show last year, many attendees are still relishing the opportunity to meet their friends and associates in person, rather than through a video screen — the post-pandemic buzz, if you will.

The NACS Show is so large and has so many exhibitors that it is often hard to see the changes in the products, equipment and new ideas from year to year. The changes tend to be incremental rather than radical and, frankly, new trends are hard to spot. I think 2022 is one of those years.

There was no big new category of products, such as CBD products in 2019, and no new major equipment or technology introductions like we saw last year with frictionless checkout. Most of what I saw was the tweaking around the edges of products and equipment, such as the addition of new flavors or more electronic devices interacting with smartphones, but nothing that was radically new or innovative.

Products. The dominant theme I saw with products is "local" and "artisan." Think this snack bar is made by hand by a flannel-wearing person in Brooklyn, N.Y., or that drink is mixed by a group living in Washington State using only organic fruit harvested during the full moon.

But seriously, the underlying trend is important. Customers are looking for products they think are healthy, good for the planet and the environment, and that they can identify with and "believe" in. This is part of the story that you should be telling your customers to help differentiate you from your competition.

Equipment. As I mentioned earlier, much of the innovation with equipment presented at the show focused on two things. The first was increasing frictionless interaction with the customer. For example, you can now pay for fuel at the pump with your phone or use your phone for payment inside the store. There were quite a few new companies offering this service. This is all about making it easier for customers to shop at your store and reduce the time and hassle of them making their purchase and leaving the store.

The second thing is being able to customize products. Customers can mix or adjust the flavors they receive (such as shots in their drink) or select from a wider range of serving sizes that fit their desires. It is about giving customers what they want; to create the relationship between them and your store. That relationship will be important in keeping and growing your business in the future.

Ideas. I heard three major topics of discussion during the educational sessions and general sessions held at the show: swipe fees, mobility and the blurring of the physical retail space with the digital retail space — the area called "phygital."

Swipe fees, the fees that credit card companies and banks charge for processing credit card payments, is seen as a huge problem by NACS as they cost the convenience industry more than $13 billion in 2021. Part of the issue is that the fees are based on a percentage of the payment and, as prices go up (increased fuel prices and inflation), the swipe fee dollars go up, eating into the retailer's net profits. Please go to the NACS website (convenience.org) to learn more about the situation and what you can do to help. This directly affects you.

Mobility, the introduction of non-hydrocarbon fueled vehicles, continues to be a big topic, especially how it will affect the future of convenience retailing. The two main points of conversation were: whether the electrical infrastructure can keep up with the projected growth of electric vehicles and their power demands; and a reminder that there are alternatives to electricity, specifically hydrogen, and whether there is an opportunity to create networks using these fuels.

Finally, in the phygital space, customers can move seamlessly between what they see and do on their phone and what they experience in the store, and vice versa. This starts with the customer being able to find you online (an issue being addressed by a new NACS initiative called Thrivr). It also includes online ordering, loyalty programs, digital offerings and discounts in-store, as well as AR (augmented reality) and VR (virtual reality) experiences in the store that give the customer either more information about what you are selling or provide a unique experience, or both.

Phygital is a broad and multilayered concept that I'm not going delve into here, but plan to explore in later columns, so stay tuned. (By the way, there was an excellent session on phygital at the NACS Show, which you should be able to download.)

Visiting the NACS Show is a bit like reading the tea leaves to see what the future holds. Sometimes, it is clear, but most of the time, it is obscure. The important thing, though, is to have enough curiosity to look into the teacup, as it were. If you don't look, you will never see.

The convenience store industry is huge and very fragmented. It is made up of tens of thousands of individual store owners and companies. The NACS Show is similar — large and sprawling.

Take the time to sit still and look closely at your customers, suppliers and competitors to see what is happening around the edges of your business to try to get an idea as to the upcoming trends. The future is in the details.

Editor's note: The opinions expressed in this article are the author's and do not necessarily reflect the views of Convenience Store News.