What Will Convenience Retailing Look Like in 2030?
MELBOURNE, Australia — It’s 2030. You drive into the local convenience store to fill up — high-efficiency liquid fuel on the left, electrical vehicle plug-ins on the right. You head into the store through recycled timber automatic doors to discover a food and wine tasting event in progress. A loyalty promotion pops up on your smartwatch: today’s seasonal special is locally sourced farm fresh chicken. So, you tap your watch, grab dinner for the family, and tell the store operator you’ll see her tomorrow morning for a drive-thru coffee on the way to work.
Truth is, according to Australasian Association of Convenience Stores (AACS) CEO Jeff Rogut, there is no way of really telling what the convenience stores of 2030 might look like, but none of the above is out of the question.
“So long as the convenience industry’s commitment to innovate continues, the landscape may change even more drastically over the next decade,” Rogut said. “Our challenge is to maintain our value proposition amid ever-changing technology and emerging consumer generations. This means adapting to change, attracting new customers and re-framing threats, such as increased government regulation, into opportunities to introduce new products and services.”
The Melbourne-based association recently commissioned its most forward-looking and comprehensive research project to date. “Convenience 2030,” undertaken by the Australian Consumer, Retail and Services (ACRS) research unit at Monash University, involved extensive interviews with convenience leaders around the world to identify the key changes, trends and opportunities for the convenience industry in the lead up to the year 2030.
The consensus seemed to be that, given the ever-shifting technology landscape, evolving consumer behaviors and population characteristics, the future for the industry is difficult to predict. But some key themes emerged.
“The research highlighted the opportunity and importance for our industry to establish new strategic partnerships, be it with fresh food producers, niche diet providers, alternate fuel companies, electric or driverless car companies, delivery service providers, or loyalty programs,” Rogut said.
Convenience stores will also need to focus on attracting new customer segments to ensure they remain a pillar in local communities. “Our customer base today is largely male-dominated, so an opportunity exists to adapt our offer to encourage more women seeking fresh, healthy food and safe environments to our stores,” he said.
Millennials are another increasingly important target market for the industry. “Just as millennials are becoming more educated, they’re entering the middle class, so they have disposable income,” said the managing director of a North American convenience chain, who participated in the research. “They are our future customers. They’re also being led by their mobile devices and the influences of their peer group, who are all talking about healthy and ethical food, so that trend is definitely translating into an enhanced offer inside and outside the store.”
Along with providing a comprehensive picture of the current and future state of the international convenience sector, “Convenience 2030” details a series of “planned quick wins” accessible to the industry, such as self-service, beacon devices, and destination drivers. It also outlines “planned innovations” that could be just around the corner, such as operational automation, predictive systems and artificial intelligence (AI) to manage inventory and targeted promotions.
A key takeaway, according to Rogut, is that the future of the convenience industry in Australia looks bright, with opportunities aplenty despite the challenges to come.
“It will be fascinating to see how the convenience industry evolves through to 2030. The AACS previously commissioned the ‘Convenience 2020’ report in 2011, and the drivers and forecasts made then have largely come to fruition,” Rogut said.
“As you enter the store of the future, you might pass the local convenience store delivery driver on the way to a customer’s house, or look up to see beverages being delivered by a drone. … You might find a large selection of private label products ecologically sourced and sustainably packaged to choose from. You might see people interacting with augmented reality entertainment options as you make your choice. The possibilities are endless,” he continued.
“In China now, they are building unstaffed stores where consumers enter using their mobiles and also pay for goods with their phones. But while there is a vast array of drivers that will impact our industry, re-shaping it in expected and unexpected ways, the one constant that will always hold us in good stead is an unwavering focus on the customer, and providing the most complete and convenient service possible.”
People today operate on a short-term cycle in terms of whether they want to be fed, have a drink, send or collect a parcel, or pay a bill, according to the director of a major European convenience store chain who took part in the research. “They generally want to do it quickly and efficiently, and convenience stores enable them to do that.”
The “Convenience 2030” report is free to all AACS members and available for purchase for $3,950 for non-members. Contact Rogut at [email protected] for further information.