We have seen much reported societal changes during the pandemic, and many of those strike at the heart of the convenience business, while others offer hope, if we can pivot. While it is difficult to write with certainty of effect in all global markets, there are some emerging universal trends that I would like to comment on.
Digital commerce received a hurricane for a backwind with COVID-19. While we were seeing a steady increase in online sales since the millennium, this year brought a 2X online increase since January 2020. It is the breadth of commerce that is astounding. In the U.S., we finally realized the value U.K. citizens have known for years with Ocado-like shopping—albeit with the twist of curbside delivery. I have routinely been in my grocery store and amazed that the only “shoppers” are from a delivery startup.
The race to convenience in e-commerce is a trend we should pay attention to. Billions are being invested in solving the delivery window. In a segment where more than 80% of our limited selection of merchandise is consumed within an hour, what happens when the big box store with unlimited selection cracks the one-hour delivery window, as Fresh Hippo has done in urban China?
Being physically convenient—along with our fuel offer—has been the key economic moat for convenience, and both are under attack by adjacent competitors and a coronavirus. Unified commerce—sell and deliver anywhere, anyhow—is the new buzzword, and we must embrace it. The cultural and technical challenge is daunting: How do you project a reliable representation of your entire offer (that is in stock right now) online, with accurate prices from the relevant store? And when you get an order, is it simply displayed on a tablet, or injected into a store production system that accurately tracks production to delivery? Is your order system voice-capable with payment and loyalty pre-associated?
If we are brutally honest, our technology stack is not ready for this change and has created huge amounts of technology debt that must be serviced if we are to stay relevant to the consumer.
A great example of our challenge is the banking industry, starting in 2008 with the fintech boom. With aging systems of record in complete compliance with regulations, consumers started demanding convenience and efficiency that matched their lifestyle. Billions in venture capital poured into little technology companies that ran service rings around the banks. Banks responded by wrapping their legacy systems with application programming interfaces (APIs) that quickly bolted on fintech innovation and retained customer satisfaction.
At Conexxus, we have been predicting digital disruption in our segment for almost five years (admittedly we did not have pestilence on our BINGO card). As of this year, we have invested more than $1.2 million granted by NACS in developing an API ecosystem with the International Forecourt Standards Forum (IFSF), our partner technology organization in the eurozone, to quickly and globally liberate data flows and definitions and to make innovative services and business models implementation better, faster and cheaper for our members.
Digital transformation and nimbleness is the new normal, but you don’t have to go it alone. Connect with Conexxus or IFSF to find out how we are revolutionized the technology capabilities of our global market.