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12/01/2020

Is the New C-store Here to Stay?

There is no arguing that the COVID-19 pandemic has changed the way consumers shop and how retailers have structured the shopping experience. That’s certainly true for convenience stores. Consumers’ habits have dramatically changed this industry, and we wonder if it will ever go back to the way it was before the pandemic. What can we expect will stay in the new normal?    

We have seen lots of changes take place during the past eight months since the pandemic hit. In many ways, convenience stores have become the go-to place for consumers wanting to pick up essentials.

Consumers are now purchasing frozen food, milk, paper towels and other items at the c-store, where they used to just run in for grab-and-go items. This is especially true in many small towns where consumers have been a bit reluctant to shop in big grocery stores or simply have limited access. And because people have been nervous to shop and leave their homes, when they do, they are filling their baskets more than ever before. We have seen increases in basket size and spend per transaction.

Inside convenience stores, we have seen some drastic moves, too, especially in the non-edible grocery category. C-store operators have had to adjust their inventory as they were selling product quantities that they would normally sell in one year in only one week.  

C-stores also have moved toward selling larger pack sizes because consumers are buying in bulk. Usually, future consumption goods like multipack items and non-perishables are not a big part of a c-store’s inventory. That has changed in recent times. C-stores have adjusted how they meet the needs of shoppers during this pandemic by accepting larger future-consumption orders from toilet paper to batteries to beer.  

Many c-stores have adopted delivery and pickup services, something that was more common with restaurants or large grocery chains. Consumers want to be able to order ahead and pick up their purchases or have them delivered using mobile ordering.

Combining loyalty, online ordering, curbside pickup and delivery really improves the customer experience and establishes c-stores as vital parts of the community during the COVID-19 pandemic. It makes customers feel safe and gives them an added convenience.  

What about consumer packaged goods (CPG) brands? The pandemic has meant that there are opportunities to evolve product assortments and the buying process to continue serving the community while retaining sales and profits. This isn’t the time to pull back. Now, more than ever, CPGs should be investing in c-stores.  

In the past, c-stores have relied on historic macro-level shopping data to understand the buying habits of consumers in times of a crisis such as a hurricane or snowstorm. Today’s environment is nothing like we have ever lived through. Now, operators are relying more on real-time data and on-demand insights to quickly adjust to consumer needs. That trend will likely continue. 

Purchasing for future vs. immediate consumption will remain a trend for consumers as well, at least for a while, and especially as we are starting to see cases of COVID on the rise. Consumers have now come to think of the c-store as a place to not just get their morning coffee, but also a place for everyday essentials and bulk purchases such as toilet paper and other pantry and grocery items.

In many states, new case numbers are rising. And with the cold weather changes and holiday travel, some predict the situation will worsen. Ultimately, this means consumer behavior changes we saw in the height of the pandemic will remain for the rest of this year and into next year.

One of the most important requirements for c-stores is that they make their customers feel a sense of safety. Implementing precautions such as sneeze guards and offering hand sanitizer at checkout counters has become prevalent. In addition, convenience retailers are adopting flexible payment options like contactless or order ahead for delivery/pickup to compete and adjust to changing consumer behaviors.

These improvements to the customer experience will continue to be a top priority for c-store operators as they look for new ways to generate revenue. According to PDI’s 2020 C-Store Shopper Report, 66 percent of U.S. convenience stores claim they plan to improve their customer experience after the pandemic subsides. And for good reason — consumers expect it.  

Loyalty programs play a part in creating a great customer experience. Consumers want to be rewarded for their loyalty. In fact, the report showed that just under half of consumers (46 percent) who did not belong to a loyalty program said they did not belong to one because the rewards, even if valuable, weren’t relevant to their needs.

To attract and retain consumers, c-store retailers should consider combining all of these elements — loyalty, mobile, contactless payments and order ahead for delivery/pickup — to ensure a seamless, differentiated and convenient customer experience.

Letting customers know that you are supportive of their struggles by providing them with promotions or coupons for essential items like milk or eggs can really be a lifeline for them vs. just a nice perk.

It is also great to remind people why they love shopping at your c-store. If a consumer is a coffee drinker, remind them how much they loved getting their morning coffee from your store each day and that you miss seeing them in the store. This creates true personalization, loyalty and connection, and that is what we all really need during these trying times.

Brandon Logsdon is president and general manager of Marketing Cloud Solutions and Fuel Pricing at PDI. In addition to the company's loyalty and fuel pricing solutions, he oversees its MarketLink and data monetization services. Visit the PDI Marketing Cloud Solutions and Fuel Pricing websites for more information.

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