Widen Your Perspective

It’s a good year to learn from outside innovation.

January 21, 2019

By Frank Beard

Prior to the First World War, the German Army studied an unconventional source to improve their transportation and logistical skills: the circus.

Buffalo Bill’s Wild West Show—which toured Europe extensively in the late-1800s—had become skilled at quickly moving from one city to the next. In particular, they had figured out how to link railroad flatcars together with planks. This allowed wagons to quickly unload in a continuous line and move in parade formation. Annie Oakley wrote in her autobiography that they never moved without “at least forty officers of the Prussian Guard standing all about with notebooks,” taking down every detail.

It’s a good reminder that sometimes the best lessons come not from watching one’s competitors, but by looking outside of the industry.

This message is especially relevant for fuel and convenience retailers in 2019. “Last mile” competition has become fierce, and it seems that everyone is trying to rewrite the definition of convenience. Not just the QSRs, dollar stores, coffee shops and grocers, but also a seemingly endless list of new and non-traditional competitors.

GoPuff eschews a store footprint and instead delivers items directly to customers in as little as 15 to 20 minutes. “The store is officially a thing of the past,” they proclaim on their website. Cargo is transforming ride-shares into mobile convenience stores, delivery apps like UberEats continue to grow, and small autonomous stores and smart vending machines—such as Stockwell and Byte—make it convenient to wait until you’re at work to get your favorite snack. Thanks to a recent partnership between PepsiCo and Robby Technologies, students at the University of the Pacific can even order food and drinks to one of more than fifty locations using a delivery robot.

It’s easy to dismiss this and pretend that nothing is changing, but imagine just discovering Game of Thrones or Stranger Things for the first time and realizing you’re out of chips or ice cream? Instead of pressing “stop” and driving five minutes down the street to the local convenience store, you could start the next episode and have GoPuff deliver it 20 minutes later. And if you want three or four pints of ice cream, you wouldn’t have to worry about judgmental looks from a cashier.

The point is that other channels and industries are figuring out how to provide convenience in ways that may not be found at the local c-store. If you’re not paying attention and looking beyond convenience retail, it’s a good time to start.

Foodservice is a good example. Virtually every quick-service restaurant has a drive-thru window, but few major convenience retailers do. Why? What do they know that c-stores don’t? As I explained last year in a NACS Magazine article, the answer appears to be quite a lot. Some QSRs are doing 50 to 70 percent of their sales out of the window.

Checkout-free technology has also raised many questions. While it’s easy to dismiss Amazon Go’s system of cameras and pressure-sensitive shelving as a novelty, perhaps consumers will one day snicker when they see checkout lines and registers in movies. You may laugh, but how many of us did the same thing over the holidays when we saw credit card imprinters in Christmas movies from the 80s or early-90s? Companies such as Standard Cognition, Zippin and CloudMinds are already positioning themselves to be part of our checkout-free future.

Even something as simple as a digital presence is worth examining. Hotels and restaurants have updated Google Maps and other platforms to have just about all the information you could possibly need. And yet, I’ve encountered convenience store brands that lack basics such as accurate phone numbers and hours of operation. That’s a problem when you consider that Google has seen a 200 percent increase in the past two years for searches using the terms “near me”, “open” and “now.”

And what about fuel delivery? A recent episode of Convenience Matters explored this issue in a discussion with Mike Buhr, the CEO of Filld. As he explained, the core customer using their service is not those with luxury vehicles, but rather average Americans.

“Yes, they love going into their local c-store,” said Buhr. “They know the people there, et cetera; but there will be a point where they’d rather just have the car fueled at home overnight or when they’re at work.”

Writer and retail expert Kevin Coupe echoed that sentiment on the podcast. “There’s probably a lot of retailers who say, ‘Listen, I’ve got gas pumps, they got to come to me once a week, twice a week’, whatever it happens to be. And a business like this just changes that dynamic. Because all of a sudden, I know if I’m a consumer that I can wake up on Monday morning and go out to my car and it’s going to be filled. And that is a huge game changer.”

The convenience store of the future will have to rise to these challenges and more. Stuzo recently presented a video detailing their vision of what that might look like in 2025. Glass-walled restaurant seating with an open-air feel, alternative fuel options, banking kiosks with facial recognition, checkout-free technology, and yes—even a drive-thru. Only this one has two lanes: one for vehicles with drivers, and another for autonomous vehicles.

Regardless of what the store of the future actually looks like, it’s clear that 2019 is a good year to widen your perspective, ask questions and embrace change. Customers have many choices, and even the most iconic brands can fall behind and become irrelevant.

Frank Beard is a speaker, writer and industry advocate who serves as an analyst/evangelist for convenience store trends at GasBuddy. Beard regularly contributes to NACS Daily and NACS Magazine. Follow him on Twitter or LinkedIn.

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