CHICAGO-The convenience store industry was thrust onto the front lines when the COVID-19 pandemic hit and the channel as a whole stepped up to the plate as essential workers.
While there will be plenty of lessons learned from the past 20 months, the industry needs to start preparing for the future, according to presenters at the 2021 NACS Show at Chicago’s McCormick Place.
“When our customers needed us, we were there for them, but it wasn’t always easy because change is everywhere,” NACS president and CEO Henry Armour said during the Oct. 7 general session entitled “Reinventing Convenience and Reimaging Our Future.”
Armour, along with outgoing 2020-21 NACS chairman Kevin Smartt and incoming 2021-22 NACS chairman Jared Scheeler discussed what the future of convenience could look like and what the industry needs to do to create that path.
Smartt said the future for him has already begun as he’s started the rebranding process of his Kwik Chek Food Stores chain to TXB (Texas Born), a brand-new convenience store concept.
“TXB is our vision of the future of convenience,” he said.
With great food at the centre of that vision, TXB is also built around providing a positive environment for its employees and embracing technology that enhances the customer experience.
Looking ahead, Smartt advised his fellow convenience retailers to keep three things in mind:
- Consistency — As leaders, it is important in challenging times to be consistent.
- Investment vs. Cost — Retailers need to broaden their scope of what’s an investment vs. what is a cost.
- Communication — Whether talking to customers or team members, it is important to paint a picture.
Scheeler is as excited for the future as Smartt is. He did, though, call out a key difference between them: Smartt is from the hot market of Austin, Texas, while Scheeler operates six The Hub Convenience Stores in rural North Dakota. But they do have at least one thing in common: the desire for innovation.
As Scheeler pointed out, change comes from many places in larger markets; however, as a small operator in a small market, he needs to be nimble. “You can take great ideas from anywhere and make changes in the industry. Small operators can transform a market,” he said.
The three NACS leaders went on to highlight three areas of focus for the industry as it moves forward: last mile solutions, age verification and socially responsible retailing, and the future of energy.
Last mile solutions
Getting products in the hands of consumers when they want them and how they want them became critical during the global pandemic.
As the health crisis took hold, Scheeler’s stores pivoted to internal delivery, though it wasn’t a long-term solution and ultimately the chain transitioned to third-party delivery. A challenge with this model, however, is that Scheeler wants his customers to say they ordered from The Hub, not DoorDash
Another challenge with third-party delivery is customer data, Smartt added. “The most important thing for our industry is that we do not want those third-party delivery services to own our data,” he said.
Age verification & socially responsible retailing
It is important for the convenience channel to be socially responsible and NACS has been working over the past 60 years to give retailers the tools to do just that, according to Armour
Over the past two years, the association has been developing TruAge, a digital system that verifies a customer’s age at every point of sale. The system has been on display at the NACS Show, and Smartt’s TXB chain is set to pilot the solution.
Citing a February 2020 NACS consumer survey, Scheeler explained that 90% of consumers want a nationwide standard for age verification. “There is enough we deal with on a daily basis that keeps us up at night. Age verification shouldn’t be one of them,” he said.
The future of energy
The c-store industry sells more than 80% of the liquid fuel consumed in the United States, Armour explained, but “the shiny object in the room” now is electric vehicle (EV) charging.
“There is going to be a mosaic of fuel in the future and EV is one of them,” he said.
All three leaders agreed that installing EV charging stations may not be the right fit for all retailers in all markets, but the changing landscape is something that all retailers must keep an eye on.
One of the big unknowns now, Armour noted, is the consumer behaviour of the EV customer. The industry needs to start studying that now, he said.
Optimizing the Cold Vault
Education sessions continued Thursday at the NACS Show, with one session diving into the dynamic, ever-changing world of beverages.
Unlike a decade ago, when the vast majority of innovation in the cold vault occurred in the non-alcoholic space, these days find beer, wine and the "beyond beer" segment of hard seltzer, cider, traditional flavoured malt beverages and emerging ready-to-drink (RTD) cocktails significantly contributing to innovation.
Speaking during the "Cold Vault in 2021: Trends and Takeaways" session, Lauren Quaglia, national channel manager — convenience at Boston Beer Co., highlighted some ways that convenience store operators can get the increasingly important beyond beer shopper to make a purchase at their stores instead of going to another retail format.
These shoppers typically consider what segment they want first, such as hard seltzer vs. flavoured malt beverages. They then think about brands, and finally pack size. In contrast, traditional beer drinkers think about brand first, then size, then segment, she explained.
"The decision can happen really quickly," she said. This makes it extremely important for c-stores to have various segments available and grouped together in an organized fashion.
To build the optimal beyond beer assortment, retailers should flex and adapt, revisiting what's working and what isn't more frequently than they do with other packaged beverage segments, Quaglia advised.
Staying nimble post-COVID
Whatever steps c-store operators took during the early days of the pandemic and whatever they have in mind as they look ahead to the end of it, there is a single guiding principle they should keep in mind: be nimble, according to the "Moving On: Easing Guests’ Post Pandemic Fears" education session.
Like c-stores did in spring 2020, retailers today need to be prepared to act quickly, but also make long-term plans. And above all else, they need to consider the human element.
Charlie McIlvaine, chairman and CEO of Coen Markets Inc., shared a list of core principles that have carried his company through the pandemic and now toward a post-pandemic future:
- Do the right thing;
- Embrace change;
- Communicate with transparency;
- Respect and value team members;
- Treat vendors as partners;
- Have a passion for winning; and
- Commit to making a positive impact on the community.