Convenience Retailers Rethink Consumer Engagement

EG Group, Rutter’s leaders share insights on retail innovations that appeal to new consumer behaviors. 

July 13, 2020

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By Chris Blasinsky

LONDON—Ilyas Munshi, group commercial director at U.K.-based EG Group, has had an eye on the enormous potential for drive-thru and curbside pickup for quite some time. But with the current pandemic, site access, food and merchandise delivery, rapid technology deployment and contactless payment methods have all accelerated the pace of change, both for the business and consumer behavior.

For its ninth episode of “Shop Talk Live,” the team at Global Convenience Store Focus shared insights from Munshi and Scott Hartman, CEO of U.S.-based Rutter’s, during the “Engaging the Convenience Store Customer of the Future: Format, Loyalty and Technology Innovation” webinar.

“Many retailers have been reviewing what is going to be the ‘new normal,’ and we have also been reflecting on various strategies of how consumers will want to engage with our retail business in the future,” Munshi explained. The company is launching a new loyalty app, the EG Club app, which allows customers to access fuel, foodservice, grocery and merchandise in a single digital retail platform. The app is being introduced to the Australian market first, following EG Group’s recent acquisition of Woolworths Group Ltd. 

During COVID, Munshi noted that in terms of customer behavior EG Group saw a shift in sales throughout lockdown where delivery and dine-in saw modest increases, and drive-thru shifted from about 31% to more than 50%. His takeaway is that consumer sentiment toward drive-thru suggests that  a retailer’s ability to facilitate ease of purchasing and provide some level of engagement is important.

For example, EG Group’s multi-drive-thru site at Frontier Park location in United Kingdom features a Spar convenience store offer and foodservice offers from Subway, Starbucks, Greggs and KFC. “Who would’ve thought a few years ago that a brand like Greggs would be engaging the value customer through the drive-thru?” said Munshi, noting that today, this is a popular proposition, where at times consumers seem more willing to queue than they were pre-COVID. 

“In this new world, the brands we work with like Starbucks, Subway and Burger King are all considering what the store of the future will look like,” he said, and whether these brands will refocus sites with smaller seating areas and a larger emphasis on drive-thru and takeaway options. And not just a standard drive-thru, Munshi suggested, but multiple lanes dedicated to prepaid pickups and conventional drive-thru customers. Of course, all of these changes will require strategic planning around the store of the future, investments that account for new technologies and overall site and store design to move customers through their shopping experience with ease.

Scott Hartman, CEO of York, Pennsylvania-based Rutter’s, shared how technology is in the company’s DNA. Rutter’s was one of the first convenience store chains to create a website, adopt a mobile app and implement digital gas price signage. And Rutter’s was early to the scene with touchscreen kiosks for foodservice ordering in the early 1990s. All these innovations, he suggested, continue to advance Rutter’s growth strategies with a common goal in mind: Create a unique and exciting customer experience at Rutter’s stores and with the Rutter’s brand.

As a former NACS chairman, Hartman delivered his keynote at the 2005 NACS Show following a study tour to Asia, where he saw firsthand how technology was rapidly evolving and realized how much the United States was lagging. When it comes to technology, every part of the world has a strength, he said, “and it’s our job as retailers to learn from them.”

Ironically, when it comes to drive-thrus, Hartman noted that what’s old seems to be new again. Rutter’s first built drive-thrus in 1995 at about 10 locations, but over time all have closed. “Here we are back again where they’re part of the conversation,” he said, noting that while QSRs are the drivers of the drive-thru, there’s certainly room for convenience stores to operate a successful model that can meet the same level of service consumers expect inside the store. And as store size increases—many newer Rutter’s locations are 10,000 square feet—fulfilling foodservice plus in-store merchandise orders presents considerations that U.S. retailers may need to work through.

Munshi added that in the U.S., convenience retailers also should consider any operational challenges for curbside, like recognizing when customers arrive and identifying which car they are in. “There’s no wrong or right solution for curbside at this time,” he suggested, adding that it’s important for the industry to strategize what these new delivery methods will look like in the future to engage and satisfy consumers.

Chris Blasinsky is the NACS content communications strategist; she can be reached at cblasinsky@convenience.org, and on Twitter and LinkedIn.

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