ATLANTA—As convenience retailers globally continue trekking the road to pandemic recovery, there are three key challenges many will face this year, said former NACS Supplier Board Chairman Drew Mize, EVP and general manager of ERP Solutions at PDI Software.
First, consumer confidence. As more people are vaccinated against COVID-19, many are still wary about venturing out. Therefore, retailers “must continue to demonstrate that their stores are safe places to shop,” said Mize, noting several ways they can help instill consumer confidence through programs that demonstrate their commitment to the new consumer:
- Loyalty programs, which were well-received by customers in 2020. PDI’s 2020 C-Store Shopper Report found that most consumers (63%) said they belonged to a c-store loyalty program. Of those shoppers, 51% said earning rewards or saving money prompted them to spend more than they originally planned, and 63% said they would shop more frequently at stores where they could earn rewards.
Retailers are also increasingly seeing the value of loyalty. PDI’s 2020 Road to Rewards Report
found that 40% of decision makers said the primary goal of their loyalty program was to change consumer shopping behavior, including increasing the frequency of visits. “We see those trends accelerating this year as retailers strive to create even stronger connections with consumers,” said Mize.
- Touchless transactions: “Anything that facilitates a touchless transaction, such as private-label debit and mobile payment applications, gives merchants the added ability to increase consumer confidence and engagement with their stores in a safe way,” he said.
- Shopping options: The pandemic’s arrival immediately transformed the last mile of service. Although these shopping options continue to evolve, Mize said that some retailers may begin to pull back on these offerings to bring consumers physically back into the stores. “Stay tuned as this will be a challenge to meet the demands of the consumer, yet to also encourage in-store shopping,” he said.
Second, product selection
. “Some c-store brands went through a bit of an identity crisis in 2020 as they grappled with the expectations of the new consumer,” said Mize, noting that stores shifted from grab-and-go destinations to the go-to shopping place for essential items. Moving forward, if stores continue to offer essential grocery items, there are a few strategies to consider:
- Choosing inventory: In 2020, consumers relied on their local convenience store for bulk items, grocery store goods and perishable foods. This year retailers will need to determine how they can meet the needs of consumers by expanding certain items. “As a result, convenience retailers will need to rely more heavily on real-time data and consumer insights,” he said, which leads to his next suggestion:
- Relying on data: Having reliable basket-level transaction insights will still be one of the best sources of shopper and location data to meet demand and improve store-level sales, inventory and category management, said Mize, adding, “Systems that can process basket-level data on-demand and handle real-time transactions will be more important for getting inventory back on track. The trends back to pre-pandemic buying behaviors will return over time, retailers will need to respond quickly as these trends change.”
And lastly, the workforce. As more people return to the workplace, school, etc., convenience stores will continue to serve as the destination for food, fuel and refreshments. However new consumers could be someone who will never go back into an office or will likely work from home several days a week. “As a result, there will be fewer visits to c-stores—a problem the industry was already grappling with prior to the pandemic,” said Mize.
There could be changes afoot for the morning daypart: Does a morning coffee and breakfast item pick up at 8 a.m. now become a promotional item that consumers can pick up at 10 a.m. every Tuesday? “Retailers will need to be creative to bring consumers back into the stores on a regular basis,” he said.
Keeping employees safe and motivated will continue to be a top priority. Mize suggests that retailers may need to consider new policies to support and incentivize employees, like higher wages, thank you pay or special bonuses, providing additional time-off, making healthcare and benefit adjustments, or allowing for free meals and other perks.
“It may be difficult to predict the future, but one thing is certain: C-stores are up for the challenges ahead,” said Mize, adding that the key to success is often in finding creative ways to embrace to the new consumer.
“By evolving the in-store experience to adapt to customer expectations, relying on data to provide insights into what the new shopper needs, and making tangible changes that demonstrate care and appreciation for their employees, c-stores will survive and thrive in 2021 and beyond,” said Mize.