How Roadside Retail Has Flourished

Convenience retailers and industry experts share insights on how technology and innovation is driving the pace of change in India and the Middle East.

March 08, 2021

ENCO Canopy Gas Station

By Chris Blasinsky

LONDON—From Latin America to Australia, to the U.K. and United States, global convenience retail is accelerating at a rapid pace. While each market has its own unique characteristics, the tie that binds them often leads back technology.

Learning From the East

Dan Munford, host of Shop Talk LIVE’s World Tour series (#STLWorldTour), was joined by convenience retail and industry experts on how technology is driving the pace of change in retail during “Modern Retail in India.”

There are ample opportunities for industry professionals who are accustomed to Western retail to learn new ideas, operational efficiencies and consumer behaviors from the East. For Rimal Patel, online director at Tesco, changes in his perspective transpired from opportunities to work in markets like Japan, Korea and Malaysia, and capture several key western retail characteristics:

  • Consumer access and willingness to pay for convenience
  • The sophistication of consumer shopping missions, particularly throughout the pandemic
  • Next generation retail that doesn’t rely on expensive and complicated technologies

Similarities like increasing congestion in cities, growing competition for labor and loyalty drivers are prevalent in both Eastern and Western markets, Patel said.

Dipayan Baishya, head of strategy and communication at Future Group India, shared that in the last two decades there’s been unprecedented growth in income and technology advances in places like China and the Southeast Asia region. Many of the trends prevalent today from large companies like Alibaba, such as Single’s Day, have filtered to smaller operators at a competitive level.

“The early signs of what the next thing is going to be in retail, the cues very often come from places like China, Southeast Asia, Korea and Japan,” said Patel, adding that these markets offer immense learning opportunities for the global retail market.

Every few hundred kilometers, entire regions in India change, from food preferences to buying patterns, income and languages, said Baishya, noting the opportunities for retail in a highly diverse market. The key to success is building interesting retail models for a diverse consumer base and relying on technology to deliver data on shopper profiles and purchasing habits. Then retailers can interact with their shoppers, build loyalty and exceed expectations throughout consumers’ shopping journey.

In terms of adapting to new shopping behaviors throughout the pandemic, delivery has increased alongside an ongoing debate whether delivery from a fulfillment center to a customer’s doorstep can be executed efficiently and profitably, said Patel.

For example, there are many delivery models in the U.K., each with their pros and cons, where COVID and technology have melded to drive competitive intensity. While location is a competitive driver in the U.K. market, its common to see multiple 7-Eleven stores on the same city block in countries like Thailand. For those retailers, their differentiators are loyalty and value-added services.

“The benefit of technology is it opens up things much quicker” and deliver more choices for shoppers, said Patel, adding that it’s been interesting to see physical retail and digital capabilities come together. However, it’s also important that retailers don’t allow technology to take the lead. “Often technology can become the excuse” for not addressing problems, he suggested.

Convenience in the Middle East

Next #STLWorldTour focused on the Middle East, “the land of the roadside retailer,” with insights from two fast-growing retailers and co-hosted by Mark Wohltmann, director of NACS Global.

Nikolay Vylegzhanin, a Middle East-based convenience retail expert, noted that the Middle East is not only large but extremely diverse. A main reason why the Middle East is known for innovating roadside retail is simple: “The car is king” and fuel volumes are high, he said, noting that Gulf Cooperation Council countries have invested in road infrastructures and are still in the early stages of public transportation. Because of consumer reliance on cars, the Middle East was ahead of the curve on concepts like drive-thru and curbside pickup when the global pandemic hit.

Paula Thomas, loyalty consultant and host of the “Let’s Talk Loyalty” podcast, who is based in the UAE, talked about the emergence of independent retailers and foodservice operators throughout the Middle East. These businesses are competing in a challenging business environment by offering strong loyalty programs. “Loyalty has become a new currency in our industry,” she said.

Brian Kuz, chief marketing officer at ADNOC, noted that the company wants to be known a modern, fresh and progressive retailer that focuses on customer service and experiences. Echoing Vylegzhanin’s “the car is king” sentiment, ADNOC sold 8.7 billion liters of fuel in 2020 from 136 million fuel transactions. The company has currently 326 convenience stores and 445 retail fuel sites in the UAE, and the average basket size is about $7.7 (US) with an average of four products per ring.

ADNOC is implementing new store formats, including its ADNOC On-The-Go drive-thru and modular station. The new concept is central to ADNOC’s focus on its customers and utilizing digital technologies like contactless payments and tablet ordering to improve the shopping experience.

Food and coffee play a major role in ADNOC’s desire to deliver fresher “foodvenience” options with onsite baristas and bakeries, made-to-order sandwiches and private brand offers. The goal is also to shift public perception from a retailer that sells fuel, to a destination that serves great tasting food as well as fuel—a strategy employed by convenience retailers in the United States in the past decade as they’ve developed exception foodservice programs.

Zaid AlQufaidi, managing director for retail at ENOC, took viewers in a deep dive into the companies recently unveiled “Service Station of the Future,” featured in NACS Daily and LinkedIn.

The most striking feature of ENOC’s concept is a uniquely designed canopy, inspired by the Ghaf tree, the UAE's national tree. The canopy encloses a leaf-shaped ethylene tetrafluoroethylene (ETFE) cushion canopy, is 100% UV-ray-protected and has more than 3,800 LED light modules that can change color as needed. The canopy has 133 individual layers and was constructed with 37-plus tons of carbon fiber, a lightweight, sustainable alternative to steel.

The service station also includes several applications of advance machine learning, artificial intelligence and data analytics technologies that play a role in customizing services and retail offerings for customers, managing queue and waiting times at the forecourt and improving the overall customer journey.

The project is a world-first in many respects, which ENCO created alongside its collaboration with Expo 2020 Dubai to support event logistic fleets with providing fuel and other services. Nearly 200 participants from various countries, multilateral organizations, businesses and educational institutions participate in Expo 2020 Dubai, the first World Expo hosted in the Middle East, Africa and South Asia (MEASA) region.

Chris Blasinsky is the NACS content communications strategist at NACS.