CCentral-Main-logo-EN-trans

Convenience Central
Join our community
extra content
Shutterstock

A Q&A with Russell Large on how COVID-19 will reshape convenience

Six months ago, who would have predicted that a virus would sweep the globe, forcing the closure of schools, restaurants and workplaces across Canada for months? Convenience stores, exempt from closure, quickly proved their worth as essential businesses. With an increasingly diversified product offering and a strong place in the community, research shows consumers are counting on c-stores for the usual fare, as well as household staples usually associated with drug stores and supermarkets. 

Hoping that the worst of the crisis is over, attention is turning to recovery, and what the world will look like post-crisis. With new norms like social distancing, consumers are likely to rethink how they want to shop. The onus will be on c-store owners to adapt. 

Screen Shot 2020-05-19 at 11.08.37 AMContactless payment innovations will need to be accelerated. And pre-COVID planograms and customer flow maps may no longer work as well as they once did. Russell Large, senior business development manager in Ontario for Continental Store Fixture Group (and former vice president of retail services for Hugh Large & Associates Inc.), charts how the industry can evolve from the pandemic. 

 What concerns have you been hearing from c-store operators about the coronavirus? 

RL: I’ve been fielding calls left and right from district managers and independents. They want to know what they should be doing now to stay afloat, how they can help customers through the pandemic and how to make sure stores are ready for customers when they come back in droves. 

How significant of an impact will the pandemic ultimately have on the industry

RL: Huge. Frictionless payment technology over the past few years has been driven largely by millennials. Now there is a whole other reason why people are going to be interested in it, from “tap and pay” service and pre-order and locker pick-up to mobile app payment. C-store operators who have already made investments in this technology are now way ahead of the curve. 

With the rise of social distancing, should c-store owners be rethinking their floor plans? 

RL: What is going to become really important is the store entrance. Automatic door systems will need to be the norm, and the entrance area will be nice and wide and offer a clean line to the cashier counter. It will also be more important for customers to feel like they can move around the store without jamming up against one other. That might mean instead of having four gondolas, you have three. The devil is going to be in the details.

Do you think Plexiglas barriers between cashiers and customers will become the norm? 

RL: You are seeing grocery stores install sneeze guards because of the coronavirus: I get why they are doing it. However, if convenience stores put Plexiglas in the whole front cash area, they are losing sight of an important part of the experience for customers. It is important for customers to feel connected and be able to socialize with staff. I hope down the line, when it is safe to do so, we will see these types of barriers come down. 

At the height of the crisis, we saw supermarkets selling out of cleaning and hygiene products, like hand sanitizer and bathroom tissue. Is this an area for c-stores to further explore? 

RL: Good retailers change their merchandise mix on the fly. I suspect those c-stores who were able to stock-up on those items will continue to get traction and even expand the category in their stores, because it has great margins. It also shows that you are not just out to sell gum, meat sticks and slushies, although those are all good. 

How else did product demand change during the pandemic?  

RL: A guy up the street from me owns a couple of Circle Ks and he was selling more milk and dairy products than ever before because customers didn’t want to go into a big grocer. And he was clever about it by reducing his pricing on some items. It showed that he cares and isn’t just out to gauge people, but he still reaped the benefits on the backend since he moved so much more volume. 

It is heartening to hear stories in the industry of Canadian c-store operators who weren’t being predatory in their pricing. 

RL: The guy at Circle K was also giving out little courtesy packs of tissue to customers. You don’t have to be a parasite for your business to benefit at this time. People are going to remember the retailers who tried to help, and that goodwill they’ve built up will be theirs to lose. 

How are independents going to fare through this? 

RL: From a business point of view, you look at the light at the end of the tunnel and hope it is not a train and that things are going to get better. The independent guys with deep pockets are going to fare well because they are entrepreneurial and make investments for the future. A guy in Stratford, Ont. spent three weeks renovating his entire c-store. He has a Shell and still provided fuel through tap and pay and a payment window, but you could’t go inside the store because he was tearing up the floor. His renovation plan is based on what he has learned over the past few weeks that would make the experience even more convenient and easier for people. 

What advice do you have for distributors? 

RL: When your good customers are going through a crisis, it isn’t time to chase their business and ask about their planogram. It is time to get personal. Ask them, “Are you OK? How is the family?” Have a laugh about trying to find toilet paper. They might not need to order anything from you right then, but it is important to continue these relationships. When the situation gets better, and it will, everyone can then move forward together. 

A version of this article appears in the May/June issue of Convenience Stores News Canada.


Shutterstock Multicultural foods

New Canadians shape the future of food in Canada

In 2018, Canada admitted more immigrants than at any point over the past 100 years. As Canada’s population ages, immigration is central to infusing youth and vitality into the economy. This, of course, has a wide-ranging impact—not only in terms of how Canada “looks,” but also in terms of what Canadians buy, which includes food and drink.

Shutterstock Multicultural foods

Shutterstock Multicultural foods

While new Canadians bring with them varied preferences in terms of the foods they eat, they also have an impact on the broader population. According to new Mintel research on ethnic food, more than half of Canadians say they view themselves as being “more open to eating international foods than (they were) a few years ago,” with three-quarters (77%) also viewing international foods as being “more mainstream now than they used to be.”

While this demonstrates that Canadians see themselves as being more open to trying a broader range of cuisines, the perceived mainstreaming of international foods also means it’s likely becoming more difficult for grocers to find new products that appeal to those interested in new foods and more adventurous eating experiences. Both these facets rank as the top two reasons why Canadians turn to international foods in the first place.

To appeal to Canadians’ desire for new culinary experiences, grocers can look to what’s less commonly eaten by Canadians. While Chinese and Italian foods rank as the most commonly eaten international cuisines, according to Mintel research, a sizeable swath of consumers is showing interest in exploring a diverse range of other cuisines. In this regard, Caribbean, African and Korean fare represent interesting opportunities for development. With the vast majority of Canadians viewing international foods as a bridge to experiencing other cultures, focusing on cuisines that are less commonly eaten yet garner interest can help grocers stand out.

Having a concerted international foods strategy is critical for today’s grocers. When asked, more than half (56%) of Canadians agree that “grocery stores that don’t offer internationally-inspired foods are not keeping up with the times,” with nearly half also agreeing that they’re “more likely to shop at grocery stores that offer internationally-inspired foods” and two in five claiming they will “go out of their way to travel to stores that offer specific internationally-inspired foods/ingredients.” Chinese Canadians and South Asians are more likely to hold these views.

In terms of product assortments, by their own account South Asians are more likely to want to try internationally- inspired versions of desserts, baked goods, snacks and breakfast foods relative to Canadians overall. This points to the importance of looking beyond the core supper and lunch occasion when considering how to develop or expand offerings that are inspired by other countries.

With immigration contributing greatly to Canada’s population growth, it’s critical for grocers to have a strategy that considers internationally-inspired offerings throughout their stores to appeal to newer (and even not so new) Canadians. It will set them up for success in an evolving consumer landscape.

This column appeared in Canadian Grocer’September/October issue.


Screen Shot 2019-10-07 at 12.28.28 PM

The future is frictionless

Innovative technologies clear the path to purchase

Screen Shot 2019-10-07 at 12.28.28 PMTime has always been of the essence, but c-store owners and employees may have noticed a shift in the degree to which time is valued by their customers. Consumers today want to make a purchase, and they want to make it quickly. They want to get in and out of a store quickly—with everything they intended to buy.

Patience, it seems, is in short supply.

 According to a recent study from the Retail Council of Canada (RCC), 41% of consumers said they had a problem making an in-store purchase. The study, which surveyed more than 5,000 Canadians, found that customers are expecting a more convenient, seamless and integrated experience no matter where they shop. Retailers who do not provide a seamless experience may find their customers going elsewhere.

“We are seeing a consumer who will not hesitate to switch retailers when problems occur,” says Diane Brisebois, president and CEO of the Retail Council of Canada in Toronto.  

The demand for a better shopping experience is being driven by millennials RCC’s survey found. This group reported more problems with both online and in-store purchases than older consumers (59% vs. 32%). Younger consumers, the report concluded, expect flawless shopping experiences and are not willing to put up with, well, hiccups.

Consumers expect a seamless experience

“Younger Canadians are technology experts. They want shopping to be more personal, faster and better, and it should work across all devices and surfaces by merging online and offline to create one intuitive experience,” says Eric Morris, Google’s director of retail in Toronto. “They are moving fast, and retailers need to move faster. If a retailer can’t connect their customer to the right product in as few steps as possible, they will go elsewhere.” 

The seamless experience is called frictionless shopping, and it is becoming a cornerstone for retailers of all sizes and products. “We found that retailers that were not able to reduce points of friction from their stores and provide convenience, service and value lost customers,” says Paula Courtney, product founder at WisePlum, a Toronto-based firm that helps retailers understand their customers’ needs and expectations. 

A white paper, also produced by the Retail Council of Canada, concluded that speed, convenience, selection, service, access and value for price are all key elements in the successful path to purchase for a customer. “New technologies have allowed consumers to access such services as digital payment options, instant inventory checks and price comparisons, 3-D product viewing, virtual consultants and all these innovations are redefining the customer experience,” the report states.

C-stores rise to the challenge

If consumers are throwing down the gauntlet, c-stores are rising to meet the challenge. Owners are looking to integrate digital services and human contact. Scott Knack, from Alcona Esso in Innisfil, Ont., recently launched an app for his car wash. His customers—many of whom are commuters—can even pay for their car wash at the drive-through window in his c-store, Alcona Esso. “Convenience is important,” Knack says simply.

 Customers are redefining what constitutes convenience, and the retail sector is rushing to exceed expectations. Among the latest innovations coming soon to a c-store near you are digital shelves. On the way out are paper price tags and labels. In their place will be displays that allow for immediate price changes, flashing advertisements and promotions.

 Also well in hand is the technology to allow individuals to use their smartphones to scan items while they are shopping, with scanning speeds typically only seen in commercial-grade handheld scanners. Customers can view the current total of their shopping basket and, at any time, can simply pay with their mobile device and avoid waiting in line at a checkout.

 “Mobile self-scanning apps enable brick-and-mortar retailers to offer customers a blended physical-digital shopping experience that combines the convenience of e-commerce with the immediacy of the store,” says Samuel Mueller, co-founder and CEO of Scandit, an international barcode company. 

 That convenience is customer-specific. Unveiled at this year’s National Retail Federation’s Big Show in New York, for example, is an augmented reality app that will enable customers with allergies to hover their device over a shelf and instantly be told which products are safe for them. 

 Earlier this year, AWM Smart Shelf, a retail technology firm in Aliso Viejo, Calif., introduced its Frictionless Shopping Application, which uses cameras and computer vision to automate the retail experience—including checkout and payment. The cameras located around the store interpret and understand who the customer is, what products they pick up from the shelf and ultimately what is included in their final purchase decision, then charges their digital wallet as they exit the store.

Screen Shot 2019-10-07 at 12.32.01 PMOf course, when it comes to digital innovation, Amazon has taken top spot this year with its chain of 13 Amazon Go stores now up and running in four U.S. cities (more to come). Customers pick up the products they want and exit the store. There are no checkouts and no payment taken. Purchases are charged automatically to the customer’s Amazon account. 

Rapid change is imminent 

Many of these advances may seem most appropriate for larger convenience store chains and grocery stores, but such technology is becoming more mainstream, more affordable, and more in-demand by shoppers in c-stores of all sizes. Indeed, at the 2019 Conexxus Annual Conference held in Nashville, TN, this spring, the more than 200 c-store members in attendance were told that creating a frictionless shopping experience using the latest in technology is already a reality. Gray Taylor, executive director of Conexxus, a tech organization for the convenience store sector headquartered in Alexandria, VA, pointed out that loyalty programs and smartphone purchases are now well entrenched in the sector. Within the next five years, he predicted, everything from enhanced cloud-based security to automated checkout to AI will be part of the c-store experience for shoppers.

 

Within seven years, possibly within the next three, Taylor believes, c-stores will be relying on advanced analytics to better understand customers, the Internet of Things for such issues as food safety, and home delivery using autonomous delivery vehicles.

Yet the more things change, the more they stay the same. What continues to matter most to customers is having a relationship with a retailer they trust. That’s why for Scott Knack, and other c-store owners across Canada, the best shopping experience for customers is one that makes them feel good—not just efficient and expedient. It’s ultimately about the human experience. 

“Look customers in the eye,” says Knack. “Lift your head. Have a conversation.”

 

This article originally appeared in the September/October issue of Convenience Store News Canada.


7-Eleven Joe DePinto_Lg_121218

7-Eleven’s Joseph DePinto on the future of convenience

 

7-Eleven Joe DePinto_Lg_121218The convenience business is constantly evolving, facing new challenges and opportunities. So, what will the next 50 years bring for convenience retailing? Here is what Joseph DePinto, president and CEO of 7-Eleven Inc., had to say:

What do you think the next 50 years will bring for convenience retailing? 

DePinto: Time pressures will continue to increase in the future and customers will correspondingly seek out simplicity, ease of use, in addition to seamless and frictionless shopping experiences at a greater pace. Products and services will change and come and go, but it is important for our industry to remain “top of mind” with consumers when they think of convenient, immediate-consumption products and services.

What will change in the next 50 years?

DePinto: All retail sectors are evolving to be “more convenient” to the customer as customer needs continue to change. The evolution will continue to accelerate and traditional convenience as we’ve known it will be redefined. This means people will shop differently, seeking more simple and easy ways to shop. This will include shopping at close-by and convenient physical stores, but it will also include e-commerce (delivery, order and pick up at a store or elsewhere, etc.). Payments will evolve as well as customers will seek to pay the way they want and in a fashion that is most convenient to them. Finally, I believe as retail channels overlap and merge, all retail will become increasingly competitive. For us, that means we will continue to see significant consolidation as size and scale will matter.

What will stay the same?

DePinto: We will always have physical stores, but they will certainly be utilized in different ways, and we’ll build on our strength in immediate-consumption products.

Where do you foresee the 7-Eleven brand being 50 years from now? 

DePinto: 7-Eleven will evolve with the customer. We have the organization, scale and capacity to make the changes required to keep pace with a rapidly evolving customer. In this sense, we will remain top of mind with the customer regardless of how they define convenience in the future.

A version of this article originally appeared in Convenience Store News.