ALEXANDRIA, Va.—Convenience retailers are advancing in many ways to meet customers’ needs, reports RetailDive. They’re offering more basic necessities due to the COVID-19 pandemic, focusing on localization and delivery, embracing private labels, offering unique food options and using tech for frictionless experiences.
"Convenience stores have become the cool kids," said Jeff Lenard, vice president of strategic industry initiatives, NACS. "C-store doesn't necessarily stand for cool store, it still stands for convenience, because you have to sell speed of service. And speed of service is however the customer defines it."
Many c-stores were founded by selling the basics. Many began as dairy companies, such as Wood Brothers which would morph into today’s Wawa. When the pandemic hit the U.S., convenience stores went back to their roots and upped the amount of basic necessities offered to customers, especially when all a customer wanted to do was get in and out as quickly as possible with minimal human interaction. Total inside sales for c-stores increased 1.5% in 2020 to a record $255.6 billion, and average basket size increased more than 18% year over year, NACS State of the Industry Data indicate.
The pandemic also stretched c-stores’ ability to serve the customer what they need and quickly by offering delivery. 7-Eleven partnered with Instacart in 2020 for 30-minute delivery. The company and other c-stores participate in DoubleDash, which allows customers to add items from nearby c-stores in one order. There are no additional delivery fees or an order minimum, and the orders will arrive together.
Convenience stores also have a history of providing local products to the communities they serve, with the typical c-store having a smaller footprint—the average square footage of convenience stores in 2020 was 3,081 square feet, according to NACS State of the Industry Report of 2020 Data. C-stores have the unique ability to act as a central point where people in a community can gather and hang out, as well as make quick trips to pick up a couple of items, says RetailDive.
"Really being able to quickly localize and tailor the assortment to the area where they're operating, I think is an awesome advantage. And being able to do it quickly," Eric Dzwonczyk, global co-leader of the restaurants, hospitality and leisure practice at AlixPartners, told RetailDive.
Private labels are a strategy being utilized by retailers to give consumers quality at a reasonable price point, and c-stores are no exception. Mobile platform and analytics company InMarket says that private label sales increased 12% in 2020 from the previous year. Additionally, private label offerings may help determine where people decide to shop, and higher earners with incomes of over $100,000 are increasingly purchasing private label products at c-stores.
Foodservice at c-stores has been a game-changer for the industry. High-frequency c-store customers are more likely to purchase meals from c-stores, with 84% of those shoppers interested in doing so, according to AlixPartners.
"Today, when you look at convenience stores, people shop them differently. They're more likely to go to the store because of what they have to eat and drink. And oh, by the way, get gas," Lenard said. "And as convenience stores evolve from acting like gas stations to acting like restaurants—when you take the gas station component away, you have a restaurant."
The pandemic also forced c-stores to innovate in the technology space and quickly. Dzwonczyk told RetailDive that the pandemic forced five years of innovation in eight months for convenience stores. The biggest technology innovation hitting c-stores now in cashierless checkout. Choice Market in Denver offers self-checkout, walkout technology and an app, which all sync and communicate with each other.
C-stores aren’t slowing down their innovations, whether it be tech, foodservice or delivery, because according to Lenard “people will never ask for less convenience."