NATIONAL REPORT — A little more than a year into the COVID-19 pandemic, convenience store customers are still seeking more digital experiences, and operators are adjusting their strategies accordingly.
Industry association NACS recently reported that 21 percent of c-store operators implemented curbside pickup and 14 percent are looking to add a drive-thru to their operations, as falling foot traffic and fuel sales have pushed the industry further into delivering an omnichannel universe.
Meanwhile, another survey from international consulting firm AlixPartners found that 50 percent of high-frequency c-store customers say loyalty programs are "very" or "extremely" important to them, and more than a third identify loyalty as the best way for c-stores to encourage the adoption of online ordering among consumers.
In a webinar entitled "The Omnichannel Future of Convenience Stores," hosted by Convenience Store News and sponsored by Paytronix Systems Inc., Marketing Specialist Kiera Blessing of Paytronix delved deeper into the emergence of these new convenience channel trends and discussed c-stores' unique needs in the online ordering space, and loyalty's role in cultivating an omnichannel customer experience.
"In addition to decreased foot traffic, 74 percent of retailers said fuel sales were down year over year. With 80 percent of fuel sales in the U.S. made at c-stores, they have bore the grunt of the impact," Blessing said. "Between a strong emphasis on retail, and shoppers who are hesitant to visit the store, convenience operators have had to switch gears and adapt to an omnichannel experience to reach customers."
Citing the 2021 survey from AlixPartners, Blessing identified seven key trends that she believes convenience operators will need to adapt to post-pandemic. They are:
Customers coming back, but slowly;
Delivery anytime and anywhere;
Acceleration of mobile and loyalty programs;
Regulatory uncertainty; and
Localized customer experience.
Describing online ordering as "the critical backbone" to providing convenience channel shoppers with an omnichannel experience, the Paytronix executive explained how the service is at the core of curbside pickup, delivery, and mobile ordering.
"The pandemic accelerated these necessities of convenience stores into the digital age," Blessing noted. "Prior to COVID, online ordering was considered a nice-to-have and a goal for down the line, not a necessity. But that changed quickly."
Because many operators, and shoppers alike, are relatively new to online ordering, there are a few considerations retailers should mull over before implementing:
Online menu: Will it focus on prepared food, convenience items, or both? "Unlike restaurants, c-stores have thousands of SKUs to manage in an online ordering platform, so hierarchal navigation makes it easier for customers to find what they want more quickly," Blessing explained.
Operations: Will you offer pump-side pickup? Will you create a designated space in the store for takeout? Will you have employees shop in-store for CPG items ordered online?
ID checks: If you want to include alcohol or tobacco in your digital ordering platform, you’ll need to consider how to remind customers they need to show ID.
The Role of Loyalty
According to Blessing, convenience retailers should focus on eliminating friction for the consumer, while providing a safe, clean and convenient experience. While online ordering can be implemented for frictionless experiences such as curbside pickup or drive-thru-only lanes, among others, the experience comes back to having a robust loyalty program in place to bolster online ordering, she stressed.
Referencing the AlixPartners survey, Blessing cited that 51 percent of consumers aged 25-34 and 60 percent of those aged 18-24 identify loyalty as important. More than one-third (36 percent) say loyalty programs are c-stores’ best lever for driving online ordering frequency.
Paytronix has found that marrying loyalty and online ordering — enabling consumers to both earn and redeem loyalty rewards when ordering digitally — resulted in an 18-percent increase in online ordering frequency.
"This is an excellent way to drive adoption to an online ordering platform and build brand loyalty. The loyalty platform is a perfect throughway to all of the omnichannel experiences because not only is it important that guests' experiences are convenient and personalized, but it's also important that they are consistent," Blessing said. "Being able to identify themselves as a loyalty customer across all of these platforms will aid in feelings of consistency."
Blessing left the audience with these final takeaways:
Many consumers are still hesitant to return to c-stores, with more than a quarter reporting they will avoid c-stores for the next six months.
Reaching consumers via multiple channels is critical.
Choosing the right online ordering provider is a key decision that will impact the success of an operator’s digital strategy. "Seek a provider that suits c-stores' unique needs," she advised.
C-store loyalty programs are more sophisticated than ever, and serve as a key driver of online ordering frequency among the channel's most valuable customers.
An on-demand replay of this webinar, "The Omnichannel Future of Convenience Stores," is available here.