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Consumer Insights: What does ‘convenience’ really mean to today’s c-store shoppers

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CSN_AisleLogo_500x400Traditionally, convenience stores have filled the definition of “convenience” by location mostly. The channel is known for its prime locations, around-the-clock service and small store size.

While location is still important among convenience store shoppers, the word “convenience” has evolved to now evoke multiple store- and experience-related attributes, according to the findings of the 2019 Convenience Store News Realities of the Aisle consumer study.

For a majority of shoppers, it boils down to a convenient experience.

When asked what defines convenience, 44 percent of shoppers polled cited quick/quick visit and 13 percent said a store is convenient if it is close, close to home or close to work.

Convenience also means “easy.” Specifically, 22 percent of those surveyed defined convenience as easy, 13 percent defined it as easy to get in and out, and 7 percent defined it as easy access.

What a store has to offer is important, too, according to shoppers. In tandem with the expectation of an easy experience, 5 percent of shoppers said a store that offers a convenient shopping experience is one that is easy to shop and has what they need.

Overall, the definition of convenience for most shoppers is an experience that ultimately saves them time and effort. Convenience is quick, easy, close by and allows a shopper to get what they need, when they need it.

Convenience stores that focus on simplifying the shopping and purchasing experience are more likely to see an uptick in foot traffic and an increase in basket size.

SHOPPING BEHAVIOURS

For most of those surveyed, stopping by a convenience store has become a habit, with nearly two-thirds of all shoppers (63 percent) visiting at least weekly. This is particularly true for the younger generations, as 66 percent of Millennials and 65 percent of Generation X visit c-stores weekly, compared to 56 percent of Baby Boomers.

Shoppers habitually visit the same location, with 72 percent of c-store shoppers reporting they typically visit the same store each time.

When rating the store they shop most often, respondents gave “excellent/very good” ratings to trip speed (76 percent), friendly staff (64 percent), store organization (63 percent) and cleanliness (63 percent). Conversely, categories with the highest “fair/poor” ratings included price (30 percent), quality of prepared food (21 percent) and loyalty program (19 percent), indicating room for improvement in these areas.

7 decision-making strategies to make your c-store more competitive

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thought-bubble-TEASER_1The retail industry is changing every day, and so is the convenience channel — new competitors, new shopper expectations, new data and technology, online shopping, and new shoppers.

Single-store owners and small operators have the challenge of remaining relevant in this more competitive landscape, and making better, fact-based decisions for their stores to compete in this more complex environment.

In any business, you need strategies, processes and best practices to create the foundation for your business. Here are seven approaches for you to become more strategic at your c-store using some components of category management to help you out:

1. WHO YOU ARE & WHAT YOU’RE TRYING TO DO

Your overall strategy should help to guide you and your staff on what you’re trying to accomplish for your store. Consider, for example, the type of store you own or manage. Smaller stores usually have higher reliance on fuel and less on foodservice. Larger stores have more offerings. Your store type — whether you are a neighborhood store, commuter store or interstate store — also has a significant effect on store layout, target consumer, and the types of products and services you offer.

2. YOUR OBJECTIVES & HOW YOU’LL ACHIEVE THEM

What are your objectives and how are you going to reach them? Consider whether you will achieve your objectives through:

  • Service — including convenience, store location, access to the store, parking and customer service. What does service stand for in your store? Service needs to tie in with the operations side of your business, including a great shopping experience for your shoppers, while providing a great work environment for your staff.
  • Product Assortment — which relates to the categories you sell in your store, as well as the items that you carry in your store within each of those categories.
  • Merchandising — or shelving, which defines strategies related to the way your store is laid out, including aisle layouts, category adjacencies and category layouts. You should have a merchandising plan that helps your staff understand how to stock the store and why it is important. By emphasizing the importance of these activities and having processes and standards in place, you will arm your staff with the details necessary to ensure they make the best decisions for your store.
  • Pricing — including what types of strategies you use for both regular prices and sale prices. Pricing maximizes value to your shoppers and can improve shopper satisfaction.  The difference of a few cents in price can have a significant impact on both sales and profit, and ultimately how much cash you are putting in the bank. You should have processes in place to verify price accuracy on the shelf, and teach your employees how to spot pricing discrepancies and what to do about it.
  • Promotion — including the importance of promotions to your shoppers, and the types of promotions you run in your store. Promotions are a great way to drive traffic and improve the value perception for your target shopper.

3. YOUR TARGET SHOPPER

Your shopper is the one who spends money in your store and drives your business up or down. But sometimes we don’t pay enough attention to them, or neglect to think about who our target shopper is. You shouldn’t target “everyone” because you will have a hard time completely satisfying each of the different shopper’s needs. You should target the shopper groups that are most loyal and the heaviest buyers in your store.

Have a well-articulated description of who your most important shopper is. By knowing this and sharing it with your staff, you will be able to make better decisions about in-store merchandising, product assortment, pricing and promotion to better meet their needs.

Once your target shopper is defined, it’s easier to define your targeted competition, based on who has the same target shopper as you. Ultimately, you need to satisfy your target shopper’s needs better than your competitors. And you will be able to identify how to do this by continually improving your understanding of your target shopper and testing out the best ways to meet their needs through exemplary customer service and improved value perception.

4. YOUR CATEGORY STRATEGIES

To make the best decisions for your store, you need to know and understand your business — not just intuitively, where we tend to rely on what we think vs. what we know.

For your most important categories, they should have their own strategies, goals and tactics:

  • Define Your Most Important Categories: As part of your store strategy, you need to define your categories and then segment them based on what is known about the target shopper. For example, what’s included in cold beverages, snacks or confection? How do you separate between instant consumption and takeaway? How do you properly shelve the category? You may be able to get some perspective on the best approach by talking to your dealer and/or the salespeople that call on your store.
  • Assign Category Roles & Strategies: Not all categories play as important of a role for your store. Your biggest categories should have the biggest emphasis and focus for you.  There are five distinct category roles in the convenience channel: destination driver, staple, niche, occasional/seasonal and fill-in. Category roles provide guidance for how you treat the different categories in your store. Once you understand the roles in detail, you should do the actual work of assigning roles to your categories. For example, categories that are assigned the “destination driver” role are your most important categories in terms of sales and driving shoppers to your store. Examples of destination driver categories may be tobacco, beer, cold beverages, foodservice and fuel. You should allocate a high percentage of time and resources against these categories.

5. KNOWING & UNDERSTANDING YOUR INCOME STATEMENT

Every choice you make in your store — how much product to buy, what to keep as inventory in your back room, what to price, promote, how to shelve your products, and what products to carry — has a direct influence on your financial income statement. You will be much more strategic in your overall store management by better understanding the ways to influence margin:

  • By increasing sales through changes in your key drivers of volume and profit (based on the strategies you have in place for pricing and promotion, based on knowing your target shopper and competition);
  • By decreasing your cost of goods sold through better pricing and promotional strategies and a focus on inventory management (the product that is sitting in your store and not selling); and/or
  • By decreasing operating expenses (through improved efficiencies, more knowledgeable and motivated employees, and better understanding of the business).

Thinking about your business this way will help you make better choices that will improve your net profit. And who doesn’t want that? Also, by giving your employees the tools to help them think more about what you’re trying to accomplish from a financial perspective, they will be armed with better decision-making skills as well.

6. ANALYZING & UNDERSTANDING YOUR MOST IMPORTANT CATEGORIES

There are a handful of categories in your store that typically represent about 80 percent of your overall sales and profit. You need to know these categories and have strategies in place for them (as I mentioned in point No. 4 above). Then, you need to analyze and develop category plans for each of these key categories based on the data you have available.

Here are some ways you can do this:

  • Start by understanding the size of the category relative to store sales. What percentage of total store sales do your key categories represent? Look at how they are growing vs. a year ago and which segments and brands are driving the growth.
  • Ask your suppliers/distributors how the category is performing in the total convenience channel and compare this to your results. Identify the biggest areas of opportunity.

Once you have a strong understanding of your category performance, you need to analyze each of your tactics in more detail.

7. GETTING YOUR TACTICS RIGHT

I mentioned in point No. 2 above the importance of having overall store strategies for service, assortment, merchandising, pricing and promotion. You need to make sure that for your most important categories, and based on your target shopper, you get your tactics right to create the best value proposition for your shoppers. This includes:

  • Efficient Assortment: Deciding what items you carry for your category should include an analysis of your existing items and comparing them to the top items carried in the market. You should have a fact-based decision-making process for determining the right items to carry (and evaluating new items) that are best for your target shopper. This will ultimately increase sales and profit and reduce expensive and unproductive inventory in your store.
  • Merchandising/Space Management: You should have easy-to-implement planograms provided by your suppliers that align to your overall category strategies and your target shopper. Make sure you understand the key measures associated with the shelf (share of shelf, turns, etc.) and educate your employees on the proper setup of your category planograms (particularly those top categories most important to your business)
  • Pricing: Retail price has a significant impact on sales and profit for your categories, and ultimately for your store. Keep an eye on your key value item pricing vs. your competition by determining the highest profile items for a category and visiting competitors a few times per year. Establish gross margin objectives for your categories with acceptable prices for your target shopper. Generate enough margin for you to be profitable. Realize that it’s not the gross margin percentage that you take to the bank, it’s the dollars.
  • Promotions: Your promotions, including reduced prices, drive incremental sales (sales that wouldn’t have happened without you running the promotion). For major upcoming promotions in your store, review historical promotions to help anticipate how much sales the promotion will generate, and to determine the right price point for the promotion. You also need to understand the seasonality of your most important categories — complete additional analysis to drive incremental sales when specific categories are “in season.”

So, where are your biggest areas of opportunity?

For some, it may simply be to put “pen to paper” and articulate what you are trying to accomplish (vs. only keeping it in your head), which is sometimes more difficult than it sounds. For others, it may be an emphasis on analyzing your sales data to better understand your most important categories and where your opportunities for improvement are. Or perhaps it’s to start educating your employees on why you want them to do things a certain way so that they have the skills to make better decisions on their own that reflect your strategies and your target shopper.

The worst thing you can do is nothing. You should always be striving to improve your approach for better business results. This will help you to survive and thrive in this competitive retail landscape.

Sue Nicholls is founder and president of Calgary-based Category Management Knowledge Group (CMKG). She is a speaker and consultant, working with business partners to bring category management training solutions to different areas of retailing like the convenience channel. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.

7-Eleven takes convenience to a new level

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7Eleven_lab5C-store chain 7-Eleven is redefining the convenience store experience with a new concept called a “lab store.”

The company recently opened the new concept in Dallas where shoppers can try and buy the retailer’s latest innovations. The store features a streamlined checkout process that allows customers to pay through their phones, indoor and outdoor seating, and a product assortment that ranges from handmade tortillas to craft beers to organic teas on tap.

Described as a “lab store and an experiential testing ground,” the outpost is the only one of its type in 7-Eleven’s portfolio. (The Dallas News reported that another lab store could open near Dallas later this year, and that additional stores are planned for San Diego and Washington, D.C.) It is located less than two miles from the original Southland Ice House in Oak Cliff where Dallas-based 7-Eleven pioneered the convenience retailing concept more than 90 years ago. No work, yet, on bringing the concept to Canada.

“Convenience retailing is light years away from the days of bread and milk being sold from ice docks in 1927, and the industry is changing at a faster rate than ever before,” said Chris Tanco, 7 Eleven executive VP and COO. “7-Eleven stays at the forefront by pushing the boundaries and being unafraid to try new things. This new lab store will serve as a place to test, learn and iterate new platforms and products to see what really resonates with customers and how we can use those learnings to influence future store designs.”

The lab store is the first 7-Eleven location to incorporate the Laredo Taco Company taqueria, and is Laredo’s first location in Dallas. The brand is known for its handmade tortillas made from scratch in stores every day. 7-Eleven acquired the taqueria along with Stripes convenience stores in South Texas as part of the 1,000-store acquisition from Sunoco in 2018.

Digital initiatives that enhance the shopping experience are woven into the store, including “scan & pay” technology that allows customers to skip the checkout line and pay for their purchases on their smartphones.

Other store features include:

• Indoor and patio restaurant-style seating in the Laredo portion of the store as well as bar-seating across the front windows in the retail space;

• Made-to-order coffee drinks, cold-pressed juices, smoothies and agua frescas that give customers the option to customize their drinks in a full-service beverage format, and such novelty beverages on tap as nitro cold brew, kombucha and organic teas;.

• “The Cellar,” an alcove dedicated to an expanded selection of wines and craft beers, with a nearby growler station that features a rotating selection of local craft beer, cider and ales on tap;

• A cold treats bar with frozen yogurt, ice cream and multiple toppings; and

• Cookies, croissants and more baked-in-store daily.

Many of the new items in 7-Eleven’s lab store are limited-time offerings, the company said.

“A lot has changed in retail and continues to change rapidly, especially the shopping experience,” Tanco said. “This lab store is customer-focused and will explore new ideas that weren’t even on the retail radar a few months ago.”

Based in Texas, 7-Eleven operates, franchises and/or licenses more than 67,000 stores in 17 countries. In Canada, 7-Eleven has grown by 25 percent since the fall of 2016 and has 650 stores across the country.

With files from Michelle Warren. Originally published at Store Brands. 

Trend watch: 32M to open 100 self-pay convenience stores in the U.S.

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Screen Shot 2019-04-17 at 12.01.00 PMU.S.-based Self-pay kiosk innovator Three Square Market (32M) is set to open another self-pay convenience store and its seventh overall through a partnership with James Vending and JV Marketplace.

The c-store, located at the Galleria Mall in Johnstown, Pa., is built out with what 32M and James are looking as their prototype for more than 100 additional Three Square Self Pay stores set to open this year, reported Vending Market Watch.

“Self-checkout is here and we believe that not only is this the way of incorporating shopping on-line with brick and mortar, it is the way brick-and-mortar retail can save themselves,” said 32M president Patrick McMullan. “Brick and mortar retail needs ways to cut costs to compete with the on-line giants and taking the friction and employee expense out of checkout is a major step in doing that.”

The Johnstown location is a c-store and serves as the company’s first hybrid store-Wi-Fi café location. It features traditional convenience fare, in addition to proprietary JV Marketplace fresh sandwiches, salads and parfaits, and Hershey milkshakes among other novelties, as well as indoor and outdoor seating.

At checkout, customers can scan, swipe their payment and go using 32M’s new 46 kiosk, a 46-inch touchscreen kiosk equipped with conventional self-pay tools.

“Visitors and employees at the mall needed a place to get a quality meal and to be able to satisfy their technology needs accessing Wi-Fi. We provide visitors to our stores the ability to satisfy their food and tech cravings in one easy, frictionless setting,” said James Vending Operations Director James Packrone, who spearheaded the push from being a traditional vending company to an unattended retailer with Don Havens, director of public relations.

Through the partnership with 32M, Packrone and Havens have secured prime locations nationwide in more than 100 properties, with more coming, according to Vending Market Watch.

“People believe brick and mortar retail is dying but we actually believe that to be misguided. The old brick-and-mortar may be but it is giving birth to a whole new shopping and living experience which we are leaders in,” commented Havens.

More locations are expected to open in the next 60 days.

“You will see an entire retail complex be completely self-checkout in the next few years,” McMullan added. “Large shopping complexes are becoming small residential/retail hubs where everything is frictionless and our system is the center point for not only point of sale for the retail outlets, but we will be incorporating our smart city technology, sanitation controls, building access and security features for restaurants, apartments, medical offices, business  and more.”

32M wants to expand the company to not only be in malls, but other public places such as airports, hospitals and train stations, according to WJACTV.

 

Originally published at Convenience Store News.

Choice and added-value keys to adoption of alternative payment methods

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Apple_Pay_and_contactless_payment_logoWhen it comes to checkout and payment, new technologies are abounding and retailers across all industries are trying to keep up. Whether it’s payment via a mobile wallet, mobile app or emerging in-vehicle payment technologies for fuel, the options continue to increase.

Convenience store operators and fuel retailers are responding to the changes with upgraded mobile apps, wider adoption of the various mobile wallets available, and both Shell and Chevron in the United States are now offering in-vehicle payments, with Shell partnering with General Motors and Chevron with Honda. Others are following Amazon’s lead and offering cashierless checkout for a frictionless experience.

But how can c-stores here in Canada gain greater consumer adoption of their new, alternative checkout offerings?

The key is to offer added value and a reason to use the technology besides just payment, according to Kevin Grieve, North American payments lead at Accenture, a consulting firm based in Dublin.

“Mobile payment is the end game, but it’s taken longer to adopt… because there has not been enough value provided by the solutions,” Grieve told Convenience Store News. “There are multiple payment methods — whether it’s a retailer’s own mobile app, Apple Pay, Google Pay or Samsung Pay — and people will align with what provides the most value to them.”

For c-store chains with their own branded mobile app, adding more than just payment ability will be key to converting customers and driving usage, he said, pointing to Starbucks as a best-case example. The coffeehouse chain connected its loyalty program to its mobile payment, which helped drive usage. Starbucks also added mobile ordering to allow people to pay before even entering the store.

“Consumers will drive demand, but this is where the future is headed and c-stores should get into it now. Do the pilots and tests, and get the customer feedback to know what works and what doesn’t,” Grieve advised. “At one point, Starbucks had no drive-thru and now, they don’t open a Starbucks without them because it’s what consumers wanted.”

Many c-store chains are adding loyalty programs into their branded apps, along with mobile payment. For example, Shell worked with General Motors (GM) to integrate its Shell Pay & Save program into GM’s in-vehicle payment system, and also offers this integration though its own branded app.

Even those offering mobile self-checkout for a frictionless experience are including loyalty in the mix. 7-Eleven Inc. announced a pilot of mobile self-checkout that work through the 7-Eleven app, and the retailer integrates its 7Rewards loyalty program into the process.

Those c-store operators using Skip, a third-party app that enables frictionless mobile self-checkout, also have the ability to link to a loyalty program.

Going forward, offering value will be even more important as more payment methods surface and competition heats up between apps and payment technologies.

If an app doesn’t offer a relevant experience — not just payment — it isn’t likely to last, according to Patrick T. Raycroft, a consultant at W. Capra Consulting Group in Chicago, who specializes in c-store, petroleum, QSR and specialty retail, as well as digital commerce technologies. “Just being able to pay on the phone doesn’t do it the way people anticipated.”

And it’s important to offer multiple checkout and payment options to customers so that they can choose which works best for them. Allowing for Apple Pay, Chase Pay, Google Pay and more provides convenience and ease, which is what today’s consumers are looking for when shopping.

CICC welcomes Ontario budget actions that support convenience store industry

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Screen Shot 2019-04-12 at 3.13.40 PMThe new Convenience Industry Council of Canada (CICC) is applauding actions taken by the Ontario government in its maiden budget, which it says will result in red tape reductions, lower business costs and put consumers first across Ontario.

In a statement, the Council also welcomed measures designed to address regulatory burdens in the small business sector and spur growth and investment across the province.

“Ontario’s beverage alcohol policies are moving into the 21st century.”

“Small businesses welcome the message in today’s budget: Ontario’s beverage alcohol policies are moving into the 21st century,” says Anne Kothawala, president & CEO of the CICC. “As the organization representing convenience store retailers, distributors and other members of the supply chain, we are excited to help make expanded beverage alcohol sales in our Ontario stores a reality.

“We know consumers want expanded beverage alcohol sales; 74 percent of alcohol consumers say they support expanded sales,” she says, adding this was one of the findings in a new poll conducted by Abacus Data for the CICC.

The CICC highlighted a number of measures in Ontario’s budget, which it says are designed to reduce red tape and costs for businesses, including:

  • a reduction in WSIB premiums;
  • accelerating the 25 percent red tape reduction to 2020;
  • holding the minimum wage to $14/hour and tying future increases to inflation;
  • reaffirming its commitment to cutting the small business tax rate.

The Council says other measures in Budget 2019 also bode well for the convenience store industry, including breaking down interprovincial trade barriers between Ontario and Quebec.

“Our retailers have considerable experience in Quebec, and we are pleased to see Ontario’s leadership in working with our neighbouring province to grow trade,” says Kothawala.

Lastly, the industry welcomed the commitment to press the federal government to legalize single sport wagering in Canada.

“We commend this government for treating adults like adults and trusting our retailers to responsibly sell lottery and beverage alcohol to our adult customers,” says Kothawala , adding: “Overall, our sector is very pleased with today’s budget which recognizes the importance of our businesses and the contributions we make to communities across the province. We look forward to working with the government in the coming weeks and months to ensure small businesses continue to be heard and that these policies come to fruition as quickly as possible.”

Packaged beverage options are exploding: 4 tips for boosting offerings and efficiencies in-store

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From new ready-to-drink (RTD) coffees to infused teas to sparkling waters, packaged beverage options are at an all-time high, driven by innovation and consumer demand for variety.

BeverageBuyer-teaserBeverage manufacturers recognize that having diversity in their offering is critical and the same is true for convenience store operators, who want to keep customers coming back for more.

“Culturally, we’ve become so accustomed to having more choices than ever and from a consumer’s standpoint, beverages are low investment, low commitment,” explained Satoru Wakeshima, chief engagement officer at New York-based branding agency CBX. “It’s not a major decision and people like to try new things.”

Wakeshima predicts 2019 will see more of the rising beverage trends and new product explosion seen in 2017 and 2018, but with greater blurring of product types — more hybrids.

“Our expectations are higher than ever, and the bar continues to rise,” he said.

How can convenience store operators manage the packaged beverages category in a way that capitalizes on new and emerging opportunities, but maintains efficiency?

Beverage experts, offer the following tips:

1. Allocate intelligently

Because the category cannot expand infinitely, especially within the limited confines of the convenience store format, space needs to be allocated intelligently, which includes scaling back in some areas. It’s a simple concept that is not always executed.

“Reducing space for declining or slow-moving segments to make room for innovative or higher-velocity segments that attract shoppers to the store is the key to success,” says Peter Keaney, business analyst at Cadent Consulting Group. An example would be to reduce space for milk, where sales have been declining, to make space for more sparkling waters.

2. Rotate offerings with marketing support

“People want to discover new beverages, but they also want to be reassured that they’re making a good choice,” said Wakeshima. “Educating customers at retail, mobile or online to aid the deselection process becomes the expectation.”

3. Think like consumers

Thinking like consumers means in terms of “need states” rather than subcategories, as this is how consumers shop, according to Keaney. Moving forward, the plethora of packaged beverage options could be rearranged in the cooler by needs.

The NPD Group has identified four macro consumer needs: fueling, wellness, connecting and gratifying.

The NPD Group has identified four macro consumer needs: fueling, wellness, connecting and gratifying. These fundamental needs can then be broken down into more specific behaviors, known as need states. Examples of need states under fueling include “easy on-the-go” and “staying awake.” Meanwhile, need states under gratifying include “nostalgic drinks” and “morning drink favorites.”

4. Keep abreast of beverage trends

In addition to staying on top of the latest packaged beverage trends, retailers also should watch what’s trending outside the category, since trends often spill from one category into another eventually.

The fastest-growing packaged beverage segments currently are sparkling water, energy drinks and RTD coffee, all which are up by double-digits recently, according to Keaney.

Still and sparkling water continue to be big as consumers seek alternatives to carbonated soft drinks, he added. “In addition, plant-based and probiotic beverages are driving sales, as well as functional beverages and innovations like nitro cold brewed coffee. We’ll have to see how high CBD-infused beverages can fly.”

Originally published at Convenience Store News. 

Road trip! Tips for driving c-store customer satisfaction with frictionless digital experiences

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With more than half of traveling families expected to hit the road this summer, convenience store retailers are preparing for the ramp up of customer trips. Getting them through the door will take more than having low fuel prices and clean bathrooms.

Photo: Tony Webster

Photo: Tony Webster

During a recent road trip, Jim Lecinski, associate professor at Medill’s Integrated Marketing Communications Program at Northwestern University, stopped at four c-stores — with each satisfying different needs: fast groceries, favorite breakfast foods, fuel, lottery, snacks, and a restroom break.

Speaking at the 2019 NACS State of the Industry Summit this month, Lecinski explained his experience at each store depended on how well each retailer assisted him to get those six jobs done without friction at all points in his journey.

As he noted, c-store retailers can deliver a frictionless experience by tapping into their “mental model,” which consists of three elements:

  1. Creating a great retail environment;
  2. Driving people into your destination; and,
  3. Delivering a great experience.

There is one monkey wrench in the works, however, and it’s the increased use of mobile devices. “What happens when consumers don’t look up?” he asked. “Mobile changes everything.”

According to Lecinski, there are several moments of truth along a shopper’s traditional journey: the stimulus, the first moment of truth at the retail store and point of sale, and the second moment of truth — the consumer’s experience.

Mobile devices, however, added a zero moment of truth between the stimulus — like a highway billboard — and the retail store: pre-shopping, he added.

With that zero moment of truth in mind, convenience retailers need to create digital experiences that remove friction. Those digital experiences, according to Lecinski, need to satisfy a consumer’s curiosity, understand the demand and relieve impatience.

Citing Google search findings, Lecinski noted there was a more than 85 percent increase in mobile searches for “where to buy” products in the past year.

In addition, comparing Google findings from January 2015-June 2015 to January 2017-June 2017, there was a two-time increase in searches for same-day shipping, a three-time increase in “open now” searches and a 150-percent increase in travel searches including the words “today” and “tonight.”

All those point to a lack of patience among today’s shoppers. However, relieving impatience is a competitive edge convenience stores have, Lecinski said.

“Convenience stores have been historically successful in relieving impatience, but the bar gets higher because of mobile,” he noted.

Looking outside the industry at who is leading the way in delivering digital customer experiences, Lecinski pointed to:

  • Starbucks and its virtual barista
  • Domino’s and its zero-click ordering
  • Fresh EBT and its instant SNAP balance check

“Tech enables your brand to be assistive and reduce friction,” he explained.

Moving into the second half of 2019, Lecinski advised c-store operators to review their digital platform through three strategies:

  • Know me faster. How does your mobile site speed stack up to consumer expectations?
  • Know me better. How does your data strategy predict and personalize consumer needs?
  • Wow me everywhere. For what “jobs to be done” could you better assist your consumer?

Originally published at Convenience Store News. 

Riding the wave of convenience: Amazon Go reflects broader market forces

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When Amazon purchased Whole Foods, a collective shudder could be felt from grocers across North America. The online behemoth was making its intentions known by entering the grocery space. While the acquisition received a great deal of media attention at the time, the greater disruption may end up being the launch of its Amazon Go concept store in Seattle at the beginning of 2018.

Amazon Go’s cashierless model showcases a revolutionary shopping experience. No need to wait in line to pay; shoppers can grab what they want from the shelf and just walk out. The purchase is recorded on the Amazon Go app by syncing with sensors located throughout the store. Those who have shopped there have reported that it’s so seamless it feels as though they are shoplifting. Amazon is reported to have plans to expand Amazon Go’s presence, scaling up the number of locations to 3,000 by 2021.

Amazon Go’s arrival is a reflection of broader market forces that will increasingly impact the grocery space as the expectation for easier and more curated in-store experiences grow. As Netflix changed the media landscape making traditional television seem increasingly like a relic, grocers need to be wary of experiencing a similar fate.

The integration of technology with the shopping experience proves particularly important to Generation Z. Representing the emerging shopper base, consumer feedback collected for Mintel’s recently published Grocery Retailing in Canada report shows young adults are more likely to cite interest in a shopping experience that is quicker and easier. Furthermore, technology is shown to play a particularly important role in achieving these outcomes for younger consumers according to earlier Mintel reports.

An added benefit of greater integration of personal technology can be found in either reducing labour costs or by reallocating labour to more value-added functions within the store. This can include giving shoppers more personalized attention when they have questions or staffing-up in other departments to provide more fresh, prepared items—an area where grocers often realize higher margins on a per-purchase basis.

U.S. grocery chain Albertsons’ recent agreement with Microsoft to leverage its cloud-based expertise shows that the race is on to create more technologically-integrated, in-store shopping experiences. In the Albertsons example, the grocer has been testing “Amazon Go-like” technology providing cashier-free shopping. The partnership with Microsoft could provide critical expertise in scaling up such technology. Other retailers, such as Walmart here in Canada and Marks & Spencer in the United Kingdom, are also investing using scan-and-go technology that allows consumers to make purchases in under a minute.

So, what’s next? While difficult to predict, it may involve the grocery store becoming more mobile. U.S.-based startup Robomart plans to bring groceries, baked goods and prepared foods to the customer’s door via self-driving vehicles. This envisions a future where the phone is at the centre of more streamlined shopping experience, both in and out of the grocery store.

Despite online shopping’s rise, brick and mortar grocery stores aren’t going away. That said, a growing reliance on personal technology means grocers will need to invest in evolving the tools they offer to provide shoppers with a more convenient, informed experience.

Originally published in Canadian Grocer’s March/April 2019 issue.

7-Eleven’s digital strategy is about expanding customer interactions

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As technology advances, improved hardware can make a big difference in retail performance, but equally critical — or potentially even more important — is data and how it is used.7-eleven-logo-500x400

“Disruptions are coming at the c-store industry everywhere you look,” Kimberly Otocki, content marketing specialist for Paytronix, said during a recent webinar presented by the company, titled “How 7-Eleven Is Changing the Game…Again.”

This includes regular convenience stores that are embracing new technology, as well as outside competitors like Amazon Go. Additionally, dollar stores are starting to rival c-stores as they try to claim the convenience factor for themselves.

“Convenience is changing, and that’s why 7-Eleven is reacting the way they are,” Otocki said, pointing to the company’s 7Rewards loyalty program as the centerpiece of its digital strategy.

The primary goal of 7-Eleven’s digital strategy is to expand customer interactions beyond the four walls of the store and the forecourt.

Customer data is the key to customer engagement, used as the foundation for how 7-Eleven communicates with customers, how it gets them to return and how it keeps their loyalty, according to the webinar.

Smartphones and mobile devices offer multiple paths to mobile engagement, including push and pull messages, customer surveys, mobile-responsive emails and geofencing.

Geofencing in particular is a way of ensuring that c-stores message customers at the right time through the right medium, according to Otocki. Based on GPS, retailers can set a certain distance from their store at which their mobile app will notify the customer of reward items they are eligible for or what items are currently being promoted. The messages can be tailored to individual customers based on their existing data.

SMS text messaging is another way to reach and engage customers — and a popular one, as 75 percent of consumers indicate they would like to receive offer messages through this medium. SMS apps are also one of the most frequently used types of smartphone apps. As a result, companies can send personalized messages based on data in a medium they know customers are going to be in.

One platform-specific digital initiative that 7-Eleven has launched is a Facebook chatbot, which customers can message to seek out the nearest store or investigate deals, promotions and rewards point balances.

The digital trend that may be most important in the future, though, is mobile ordering and payment, as well as delivery, Otocki said. 7-Eleven first moved into this area by utilizing Apple Pay, Google Pay and Amazon Cash.

Mobile payments are a win-win scenario, offering customers faster-moving lines and offering retailers more data they can use to improve their customer experience.

Mobile payment can even give older stores a different feel, according to Otocki. “[Customers] see it as quicker and easier,” she said.

On the delivery front, she noted that it isn’t home delivery or nothing; c-stores can set up programs that deliver items to drivers at the fuel pump, connecting in-store purchases to out-of-store customers. Retailers can also designate pickup points for pre-ordered purchases.

7-Eleven is also experimenting with scan-and-go technology, simplifying the checkout process even further.

The key to success isn’t any one type of new technology, according to Paytronix. Retailers will likely succeed if they use data to help them change and stay ahead of the curve.

Paytronix provides loyalty programs and customer engagement solutions to convenience stores, restaurants and retail chains.

Originally published at Convenience Store News.

 
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