NACS SOI Summit: The Phygital Space Is Here

C-store customers aren’t looking for physical retail over digital—they want a blend of both.

April 05, 2024

Brick and mortar retail is not going away, but digital is the future. Can the two co-exist? Absolutely.

According to Pew Research Center, nearly all Americans have a cellphone of some kind (97%) and most have a smartphone (90%). And they’re spending an average of 4.5 hours on these devices each day.

There is a pretty good chance one of these folks is your customer and using their device on the path to purchase.

“The convenience industry needs to embrace the opportunity to become a phygital space,” said NACS Vice Chairman of Research and Technology Charlie McIlvaine this week at the NACS State of the Industry Summit.   

McIlvaine, who is the chairman and CEO of Coen Markets Inc., added that customers are looking for shopping experiences that are enhanced by digital aspects, which is where technology comes into the picture.

Forbes recently wrote that today’s customers “crave the convenience of digital solutions but don’t want to miss out on the in-person connection of physical experiences. Phygital experiences bring together the best of both worlds to blur the line between technology and in-person.”

The latest NACS Convenience Voices data reveals that in 2023 nearly 66% of shoppers said they were a member of retailer loyalty program, up from 43% just five years ago. By engaging with these customers, retailers can create a consumer-centric phygital ecosystem that streamlines shopping experiences (e.g., in-app ordering and payment), allows for personalization and ultimately increases transactions.

“Customers are using their phones to navigate your store; they are ordering ahead and coming into the store to pick up their order; they might even be in the store ordering food from their device. The list goes on,” said McIlvaine.  

Also at the State of the Industry Summit, NACS reported 2023 industry performance metrics. Total U.S. convenience store industry sales hit $859.8 billion in 2023, of which $532.2 billion were from fuel sales and a record $327.6 billion in inside sales.

For more in-depth coverage of this week’s event, be on the lookout for the June issue of NACS Magazine and the soon-to-be release NACS State of the Industry Report® of 2023 Data, available in mid-June.