More C-store Chains Going All In on Mobile Tech

NATIONAL REPORT — Considering smartphones are quickly becoming the No. 1 form of communication for many consumers, convenience store retailers are going “all in” in regards to launching mobile apps for their brands, which often incorporate loyalty programs and mobile payment, according to the just-released 2015 Convenience Store News Technology Study.

Convenience giant 7-Eleven Inc.’s debut of 7Rewards was one of the highest-profile industry apps to debut in the past year. In addition, the power of c-store retailer apps was proven when Cumberland Farms Inc. announced on Oct. 1 of this year that its SmartPay app reached $1 billion in sales volume just two years after its release.

Nearly 39 percent of c-store chains responding to this year’s CSNews Technology Study reported they now offer an app to their customers, more than a 10-percentage-point rise compared to the 2014 study. More than 62 percent of chains also offer a loyalty program, a solid 4-percentage- point increase year over year.

Adoption of mobile payment saw an even larger jump on a percentage basis. Nearly one in four c-store chains (23.5 percent) are offering some form of mobile payment in-store — such as those available from Apple, Google and PayPal — compared to just 7.8 percent of chains in 2014 and 2.1 percent in 2013.

Advancement of mobile payment adoption at the pump is equally impressive, with 21.1 percent of chains stating they currently employ the technology, vs. 6.5 percent in 2014 and 2.3 percent in 2013. Hence, although several media reports have alleged mobile payment growth has been slow with the exception of Starbucks Corp., this data refutes that claim.

Overall, c-store chain retailers are certainly placing an emphasis on technology upgrades in their businesses. Ninety-six percent of chains responded they made a technology/automation upgrade in full-year 2014, compared to 91 percent the prior year. Chains spent an average of more than $1.8 million on upgrades, with a median of $325,000 spent per company. Both these figures easily trump the amounts spent the prior year. Nearly two-thirds of this money was spent on store-level technology, with the remainder remitted to boosting headquarters technology.

For full-year 2015, the majority of c-store chains expected to invest more in technology compared to 2014. More than 56 percent of respondents said they will spend more this entire year, compared to 46 percent who made the same assertion for last year.

For more results from the 2015 Technology Study, including insight into EMV compliance, look in the December issue of Convenience Store News.