Throughout 2018, major themes have taken shape within convenience retail. As the industry continues to change to meet customer demand, businesses are becoming smarter at targeting their audiences. This targeting can be categorized into sets of trends: increase in electric vehicle adoption, digital experience and ecommerce, health foods and market consolidation. Let’s take a look back at 2018 to better understand these trends and what they mean for 2019.
Interest in Electric Vehicles
Over the past few years, Europe has become the second largest electric vehicle market in the world, making c-stores destinations where drivers can recharge their electric vehicles and relax during the charging downtime. As the Paris Climate Agreement was recently passed earlier this week, the number of electric vehicles sold can be expected to rise, with other economies quickly following suit.
While the future is looking a little greener, convenience retailers need to focus on building relationships with consumers now. Once consumers have chosen your store to charge, they need a reason to stay the potential half-an-hour charging time, so give them a reason to choose your store and a reason to return to charge there again in the future.
Ecommerce and the Consumer Digital Experience
As 2018 has shown, one way to attract customers is through a digital experience. As your store format shifts to match consumer preferences, the digital experience must pivot to match them as well. Consumers today are looking to order the items they want, when they want them, in the way they want to order them and have them ready for pick up or delivery. Simple, right? To accommodate this, retailers have increased the number of ways consumers can reach them, thus increasing the number of ways they can reach consumers.
Many c-stores are now piloting or offering delivery options, adding to the digital experience some customers already receive. With touchpoints such as order-at-the-pump, store websites, and branded apps, customers can order ahead and pick up their items quickly, while still receiving the same level of service they’re given when they traditionally stop-and-shop in the c-store. As layouts to accommodate touchpoints such as kiosks, to-go order pick-up and other digital experiences gain popularity, ecommerce continues to redefine and modify consumer experiences to better suit customer needs.
More than 22 percent of loyalty members will only shop with a particular brand based on a loyalty/rewards programs alone. Loyalty continues to grow. In Europe alone, an estimated 50 percent of retail growth will be driven by ecommerce.
Healthier Food Choice
Convenience retail stores are beginning to shift their layouts and have begun offering items on par with restaurants, coffee shops, and low-cost stores. This comes as the industry continues to see an increase in competition from QSR and dollar stores. In 2018, convenience retailers began providing more fresh food/health food options, based off growing interest. Convenience retailers listened to customers and have provided them the items they want most.
According to NACS, foodservice in convenience retail rose to 16.38 percent of in-store sales. This rise is backed by the diversification of food items offered in the store. As c-stores refine their offerings, fresh food, health-driven foods, meal kits and prepared food continue to do well with customers. Retailers can bank on this trend continuing and pivot towards these types of items, but Food Business News highlights that it’s important to choose a mix of offerings that are right for your store and your local clientele. They note, what a consumer wants on Monday won’t necessarily be what they want on Friday.
To combat the consumer’s indecision, make sure to leverage technology that can track their choices. Use the same technology to track items that may have high spoilage rates such as recipe items, as the industry has seen an increase as high as 17 percent, according to NACS.
Tracking your consumer’s preferences and choices remains vital to maintaining a profitable store. Because no two stores are alike, having the ability to qualify that information is important, especially as consolidation through mergers and acquisitions rises within the industry.
Consolidation Leads to Growth
With high consolidation trending in the market, store-level data is needed as businesses merge, rebrand, and implement processes from new parent companies. According to NACS, the average site count of a convenience retail chain store is 36, rising an average of 33 percent over the last year. Fewer businesses remain in the market as c-stores of all sizes continue to merge, prompting new business from international and/or domestic markets to begin entering as previously unknown competition.
PDI can help you navigate these and other industry trends. With a variety of solutions that include everything from your back office to consumer marketing, discover how we can help you thrive in today’s digital economy.
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