Search “what is a convenience store” and Google will return about 453,000,000 results in half a second. The top definition—"a store with extended opening hours and in a convenient location, stocking a limited range of household goods and groceries”—explains what’s on store shelves. It’s basic, but also correct.
On August 14, 1961, a key moment in our industry’s early years transpired when Speedee Mart founder Henry Boney called on 14 owners, presidents and general managers of convenience stores to attend a meeting in Kansas City, Missouri. Boney felt “sufficient growth of convenience food stores throughout the country was such that it warranted the formation of an association to cover that segment of the food industry.” Attendees agreed, and the National Association of Convenience Stores (NACS) was born.
This was also the time our founders established a name. Back then, convenience stores were called bantams, mini marts, bodegas, corner stores or dairy stores. A popular name was drive-in, but the founders agreed it was more closely linked to a restaurant: Dairy Queen. So, they landed on convenience store, which also described the types of products sold.
Some retailers may remember the NACS Annual Report, “We Are Convenience.” The report outlined five focus statements, beginning with “Defend and Grow Our Core Categories.” Sounds like the industry was at a crossroad. The chairman’s message from then-NACS Chairman Carl Bolch Jr. said, “Now, perhaps as much as any time in our industry’s history, we are in the midst of transition. Consumers are changing at a pace that is dizzying. And competing channels of trade are entering our space and seeking a share of the retail marketplace that we pioneered.”
In sum, the concept of convenience was catching on among other channels. Time for an offensive strategy, and time to recapture the flag.
In 2001, the NACS Coca-Cola Leadership Council, now the NACS Coca-Cola Retail Research Council, published the “Redefining Convenience: Successfully Marketing to 21st Century Customers” report, and smack dab on the cover is another definition of convenience store: 1) a place that provides necessities and satisfies material wants, and 2) offers a complete experience conducive to personal ease and comfort.
By today’s standards that definition could apply to IKEA, or a bar.
Going beyond the cover, because the guts of the report are insightful, the 13 retailers who made up the Council were concerned that the convenience store industry wasn’t capitalizing on opportunities to serve more customers and take ownership of the concept of convenience.
Jim Keyes, then-president and CEO of 7-Eleven, served on the Council and said the group “felt strongly that in order to create a point of difference for the future we had to understand how the nature of convenience is changing, and what it means to different consumer groups.”
The Council outlined four goals that could help the industry create strategies for capturing customers and redefine convenience from their point of view, by:
- Understanding how the definition of convenience is changing
- Understanding the role convenience plays in consumer perception of value and how it applies to the channel
- Identifying growth opportunities
- Enabling c-stores to recapture ownership of convenience.
Leading up to the 2001 “Redefining Convenience” report, the 1990s saw significant political, social and cultural events. The Cold War ended, police officers were acquitted for the beating of Rodney King and the subsequent L.A. riots, Bosnia, a recession, the Columbine school shootings and the launch of the World Wide Web, to name a few. Gen Xers, the generation known for self-reliance and independence, were entering the workforce.
By the time 2000 rolled around, it was commonplace for households to have two working parents, two vehicles and busier lifestyles and daily commutes. Fuller schedules meant longer days where everything from work, meals, school, shopping, driving kids to extracurricular activities and seeing family and friends was more planned. Basically, more people were on the go and time starved.
The vehicle market shifted, too. Ford Explorer and Jeep Cherokee hit the market in the early 1990s, and although the early SUV models were less fuel efficient and cost more per gallon to fill up, they offered an attractive alternative to the family minivan.
Convenience was also taking on a broader meaning, as noted in the “Redefining Convenience” study: “In fact, the whole notion of convenience has changed dramatically for most Americans…consumers no longer think of convenience solely in terms of a convenient location, extended hours or an easy place to get in and out fast.”
Convenience stores were experiencing greater competition from other channels. The period saw the rise of hypermarkets selling gas, drugstores increasing their grocery assortment and offering one-hour photo, banks providing ATMs and more QSRs entering the market with drive-thrus.
One convenience store staple also began experiencing its greatest competition that continues today: a cup of coffee. The growth of specialty coffee shops accelerated, notably Starbucks, which grew from 55 locations in 1989 to 425 in 1994, along with its first drive-thru.
Even with increased competition and somewhat predictable consumer behaviors, the Council found that the value of convenience had not lost its luster. Convenience stores were accessible, compact, efficient and simple—but no longer could the industry continue to ignore how other channels were stealing convenience store customers from the convenience stores.
The big question, however, circled back to customers. Leading up to the 2001 study, core c-store shoppers were younger, lower-income males and smokers. While these shoppers were the heavy shoppers and spent around $9 per trip, Council members realized they could not grow their business by relying on a narrow consumer base.
“Why is it that in spite of the apparent innovations we have made over the last decade we continue to attract the same audience: younger, working men?” said Sonja Hubbard, then-CEO of E-Z Mart Stores and a former NACS chairman.
While female shoppers valued convenience, “Redefining Convenience” cites that they found other channels more attractive and easier to shop. Drugstores offered a greater variety of merchandise and had become “the convenience store for many American women.” Consumers age 55 and older were buying gas at convenience stores but also spending less inside the store, and their main purchases were milk, bread and lottery tickets.
Store design and brand fatigue was real, with consumer feedback amplifying a sentiment that their local convenience store was generic. They all looked the same, sold the same merchandise and had the same prices. C-stores were losing their identity and their competitive edge because other retailers found the recipe to the secret sauce.
Time to Adapt
It turns out that the 1990s were a significant and pivotal moment for the convenience store industry: It was time to adapt or die. And if any industry can flex its resiliency and determination to succeed it’s convenience retail.
A new strategic vision emerged: “To make the inconvenient convenient for today’s consumers by satisfying their individual needs—practical and emotional—so they can manage their time-pressed lives.”
With these words, Council members created an aspirational “why” behind the convenience store industry’s story. The narrative shifted from what a convenience store was and sold to what it does. Retailers were handed a new playbook for creating emotional connections to their brands and engaging shoppers in new ways—ways that differentiated convenience stores from the competition.
Ten years ago when we celebrated the 50th anniversary of NACS, John Roscoe, an industry pioneer who began offering self-service gasoline at his Big Top convenience store in 1964, shared his thoughts on the industry:
“A convenience store is a convenient store. It’s where people shop because you are there and because it’s there. And successful convenience store operators need to develop concepts to where people will pass somebody else’s convenience store to get to theirs.”
Convenience Is Essential
In 2020, a year that will go down in infamy, the convenience retail industry was designated as essential businesses throughout the pandemic. We asked Don Rhoads, NACS Executive Committee member and president of The Convenience Group in Washington state, a few questions while recording “What Being an Essential Business Means.”
First, is the convenience retail industry truly a resilient industry? “I believe we are resilient as long as we stay relevant,” Rhoades said, adding that today convenience stores are “as relevant as we’ve ever been. With the resources available to our industry through NACS and other means, shame on us if we’re not in years to come.”
And second, is convenience retail an essential business because of what it sells, or because of who it is to the community? “We’re essential businesses because of who we are,” said Rhoads. “We can always modify what we sell, and we’ll continue to evolve and introduce new channels and other channels will likely go away because of who we are,” he said.
Cheers to that.