Innovation Abounds Across the Convenience Channel

NATIONAL REPORT — While the COVID-19 pandemic undoubtedly brought on an innovation surge, the pace of innovation in the U.S. convenience store industry has not slowed down; in fact, it only keeps accelerating. Industry-leading retailers are finding new and better ways to deliver "convenience," whether it's streamlining processes for team members or improving the experience for guests.

If asked five or six years ago whether the c-store industry was doing a good job of innovating, Choice Market founder and CEO Mike Fogarty said his answer would have been no. In fact, it is part of the reason Choice Market was started, because he saw a lack of innovation.

With eight locations in the Denver area, the retailer combines quick service and user-friendly technology with fresh, quality food from local vendors and a practical product selection. Today, Fogarty said his opinion has changed. He thinks most c-store retailers are really starting to "get their arms around the customer and the needs of the customer" and as a result, he's seeing sizable investments happening around mobility, design, technology, checkout options, etc.

"A lot of these organizations are very large and sometimes it takes a while for that innovation to really take place. But overall, I am impressed personally with where the industry is starting to head," he told Convenience Store News. "And then, you have younger leaders that are relying on Gen Zs and that are leading these organizations; they get it and they understand it. And I think, ultimately, it's good for the industry and, ultimately, for the customer."

Being customer-centric is at the heart of Choice Market. "We really think about that customer as we make decisions around all those different areas that we innovate in," Fogarty added.

[Read more: Choice Market to Scale Mini-Mart Format]

Darrin Samaha, vice president of marketing at Yesway, shares a similar perspective. The role of innovation in today's convenience store industry, he says, is delivering "wow" moments to customers by reimagining ways to make the shopping experience faster, easier and more enjoyable. This requires cultivating a customer-centric mindset.

It also entails leveraging data analytics and artificial intelligence (AI) to gain valuable insights into customer behavior, preferences and demand patterns. Through data-driven decision making, Yesway can tailor its product assortments, pricing strategies and marketing efforts to match consumer needs, he explained.

Fort Worth, Texas-based Yesway's c-store portfolio consists of 441 stores in Texas, New Mexico, South Dakota, Iowa, Kansas, Missouri, Wyoming, Oklahoma and Nebraska. Its stores operate primarily under the Yesway and Allsup's banners.

Using Technology Wisely

Of course, a conversation on innovation cannot be had without talking about technology.

"The most important development and advancement in our space is increased use of technology in a variety of ways," said Kevin Smartt, CEO of Texas Born (TXB). The Spicewood, Texas-based convenience store chain operates 50-plus locations in Texas and Oklahoma.

"From mobile ordering [to] self-checkout stations, AI technology to quickly identify store needs, customizable mobile apps and loyalty programs, these are all extremely valuable tools to ultimately help our guests get in and out of the store as efficiently and comfortably as possible, while taking some of the pressure off our employees as well," Smartt noted.

By using SparkCognition's Visual AI Advisor solution at its Georgetown, Texas, location, he said TXB has been able to gain insight into the demographic mix of shoppers, movement of customers from the forecourt to the store, where and how people are traversing the store and spending time, and service-level measures at the foodservice and checkout counters.

"This is extremely insightful for us as we're able to identify when shelves are low on product faster, how many times someone has entered the restroom and how often we need to go in and clean, when there is a line at the register and more employees need to be at the counter to help checkout, etc.," Smartt explained.

Like TXB, Casey's General Stores Inc. is also deploying digital technology, ranging from AI-enabled voice ordering for its kitchens to data-driven inventory management and fulfillment processes, to an improved digital platform and rewards program.

"Together, this technology optimizes our operations, improves the experience for our team members, and offers more contemporary and personalized ways to engage our guests," said Ena Williams, chief operating officer for the Ankeny, Iowa-based chain that has more than 2,500 convenience stores serving customers across 16 states.

[Read more: Casey's Zeroes In on Store Efficiencies to Enhance the Guest Experience]

In an industry focused on meeting the ever-evolving needs of consumers, she shared that Casey's has realized innovation that comes from "the inside out" is critical to bringing the latest and greatest products and services to its guests.

With this in mind, the company recently launched its Easy for You initiative, designed to enhance operational efficiency and simplify the store experience for team members. So far, the initiative has streamlined a number of internal processes, including:

• Using automated smart safes and outsourcing laundry services to reduce time-intensive tasks;
• Standardizing kitchen processes and equipment to improve food quality and increase capacity; and
• Piloting self-checkout and AI-enabled voice ordering technologies to offer faster service.

"By removing complexity from processes and reducing administrative tasks, these improvements have given back an average of 11 hours per week to each store across our 16-state footprint," Williams reported. "This is time our team members can use to serve our guests and complete higher-impact work, such as merchandising or food preparation. This is an example of how simple — yet effective — innovation can be when we focus on team success and guest service."

Using innovation to challenge the status quo is something bp is focused on as well across its two c-store banners, ampm and Thorntons, and its newly acquired TravelCenters of America network.

"We as a brand are constantly iterating and leveraging technology to reach our guests. Consumers are digitally enabled and we're investing in capabilities to meet their evolving needs," said Lisa Blalock, vice president of convenience, Americas for Houston-based bp.

The company sees innovation as critical to its ability to engage with the next generation of guests, and is focused on connecting with guests — both present and future — through digital channels to engage them with offers, products and services.

"A digital transformation will give us the opportunity to provide access points to our brand that are unique and individualized. It allows us to be even more guest obsessed," said Blalock.

Coming back to the question of whether the c-store industry is doing a good job of innovating, Yesway's Samaha thinks the industry is doing "a very good job" in this area, but nonetheless he believes you should continually be looking to improve. And this may mean looking to other retail channels for inspiration and ideas on how to reimagine the guest experience.

"Our goal as marketers is to elevate convenience retail customer engagement, loyalty and brand marketing so that it is held in the same regard as the best-in-class channels, whether that be hospitality, airlines, entertainment or big-box retail. There are things that these channels do very well that we are looking to emulate," he said.

The customer-centric mindset, however, will always guide the innovation journey. 

"Technology and innovation are cool, yes, and in marketing, we have so many touchpoints with technology, but great retailers apply technology with a customer-centric mindset to drive a better experience," Samaha stressed. "Innovation to us is not so much revolutionary as it is solving a clear problem, shopping roadblock or consumer need state to make it easier to shop at our stores. At the end of the day, that is our job — to consistently deliver an exceptional value to our customers."