From Route to Routine

What if your next customer never drove past your store but instead lived just a few steps away?

That was the premise of the Education Session “The Rise of Residential Convenience Retail." Steve McKinley, CEO and founder of Urban Value Corner Store, described how embedding convenience stores in residential communities is creating new opportunities for retailers.

“What I’m proposing is that there is a new emerging trend, and that is to win the routine and become part of the daily life,” McKinley said.

The opportunity is significant. According to data McKinley presented, 46 million Americans rent their homes, with 48% of that group living in apartments. By 2035, an additional 4.3 million apartments will be needed to meet demand.

Urban Value Corner Store began with a single location in Dallas in October 2019. Today, the company operates 14 locations, including nine staffed stores and five autonomous locations.

Unlike traditional convenience stores, which depend heavily on vehicle traffic, residential retail focuses on residents’ daily routines, he said. Whether walking their dogs, returning home from the gym or picking up a forgotten dinner ingredient, customers can conveniently shop without leaving their communities.

“So, the size of the basket matters, but the repeatability of the mission matters more,” McKinley said.

Success for residential retail requires a different merchandising strategy. Rather than applying traditional store planograms, Urban Value customizes its product assortment to each community’s preferences, including ready-to-eat meals, protein products and locally made goods.

“We want the residents to feel like it’s their store,” McKinley said.

That philosophy also extends to community engagement. Staffed locations participate in resident events, welcome prospective tenants during leasing tours and build personal relationships with shoppers.

“The staffing advantage is not just selection, it’s the connection with the residents,” he said.

For smaller communities that cannot support staffed operations, autonomous AI-powered coolers provide another option. These locations offer 24/7 access and curated assortments without the labor requirements of a traditional store, he said.

However, McKinley cautioned the technology does not eliminate the need for operational discipline.

“Autonomous does not mean unattended,” he said. "You’ve got to be a disciplined operator.”

Maintaining inventory, monitoring performance and ensuring reliability remain essential. McKinley emphasized that offering the products that residents purchase repeatedly is more important than providing extensive variety.

“Variety doesn’t mean velocity,” he said. “Because what happens is that the dead inventory hides the residents’ preferences.”

Residential retail also creates value for property developers. Beyond generating sales, these stores serve as amenities that can help differentiate communities and support resident satisfaction, occupancy and retention.

For retailers considering the model, McKinley emphasized understanding community routines, selecting the appropriate operating format, tailoring merchandise and keeping execution simple.