Scan-Based Trading: A C-store Owner’s Life Preserver During COVID


COVID-19 has created uncertainty in businesses throughout the country. As air travel has been impacted, convenience stores have seen an increase in traffic thanks to road-trip travel.

An increase in customers can cause a need for new products. With so much uncertainty surrounding COVID, now is not the time to take risks to fill shelves with products that may not sell.

That’s where scan-based trading comes in.

With scan-based trading, distributors own a client’s inventory until the point of sale. For example, a client can stock a variety of brand-new beverages for a trial run and eliminate the risk of purchasing something customers may not buy.

Product Trial Runs

Tracking customer purchases can help reveal which product is more popular. Through this data, you may find out that customers prefer electrolyte-packed fruit water compared to an energy drink. 

This information can create a more informed distribution plan in the future, and give clients the opportunity to test new and exciting products while removing the risk of those products not selling.

GasBuddy’s 2019 C-store Beverage Study found that 67 percent of customers try new items based on interesting packaging. Since packaging design preference will vary from customer to customer, c-stores can carry a variety of brands through a scan-based trading agreement. They are then only responsible for the products purchased by customers, leaving them more open to stocking a variety of products with differing designs.

Novelty Items

Ahead of the holidays, seasonal novelty items are in higher demand. Many customers expect their neighborhood c-store to carry a variety of novelty items as these stores have become increasingly popular compared to drug or grocery stores for millennials, as also found in GasBuddy’s study.

Through scan-based trading, c-stores can seamlessly transition from Halloween and Thanksgiving items to Hanukkah and Christmas products with ease. Additionally, many scan-based trading providers have warehouses stocked with non-branded products that can be licensed for seasonal events.

When it comes to sporting events like the US Open and the Super Bowl, novelty items are only purchased for a certain period of time. There is a lot of dead inventory with novelty items, but a scan-based trading model can help solve that problem for retailers.

This in-stock availability allows stores to keep up with demand. If a store sees a rapid increase of purchases of the novelty item, a scan-based trading agreement is able to turn around a new order quickly so that supply doesn’t run out.  

From holiday products to seasonal events, ordering novelty items through scan-based trading can allow a c-store to capture market share they otherwise may not have planned. What retailer wouldn’t want to maximize last-minute impulse buys that tend to be high-margin products?

Maximizing Profitability Without Cash Flow

Scan-based trading is also beneficial as cash flow is not exhausted on filling inventory orders. Instead, that money can be used for other business expenses; not paying for it to sit on a shelf.

It can be challenging for large chains to keep up with the products that perform best in each locale. For example, pantry items perform better at a densely populated store compared to a highway location. Hyperlocal data insights like these allow distributors to counsel clients about the products that would excel at that particular location and should be planned for future orders.

As COVID-19 continues, many c-stores will need to be more flexible with the products they put on their shelves as customer needs change, with scan-based trading being the perfect solution to trying out products without the risky investment.

Sharan Kalva is chief operating officer of C-Store Master, a regional distributor of convenience store products specializing in the beverage and tobacco categories. Based in Huntsville, Ala.,the company has a proprietary scan-based trading system. 

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