Published March 17, 2021
Of course, you know this: Convenience is king. And, retailers are catering to it like never before. Take Nike and their Nike Speed Shop. Sports enthusiasts go online to choose the shoes they want to try on and, when they arrive at the six-level NYC flagship store, they’re directed to a locker, which they open using their cellphone. Then they try on the shoes, pick the ones they want, pay for them using their phones and leave. It’s hard to beat that convenience.
This kind of technology-enabled innovation reveals something huge for convenience retailers; already cornering the market on convenience, c-stores now have the stunning opportunity to reinvent what people think they know about convenience—into experiences they never dreamed possible.
And, in the U.S. alone, convenience retailers bring in $648 billion a year. So, new digital entrants in the convenience industry agree that there’s gold to be mined through embracing digital technology to bring new levels of convenience to customers.
goPuff is one example. Started by two university students, the delivery services startup has disrupted the industry by directly addressing tech-savvy audiences like millennials.
“We are consumer obsessed. Everything we do is with that young consumer in mind. We think like them, and know what they want, because we are them,” says goPuff founder Yakir Gola. “goPuff’s entire mission is to bring them the products they need, faster than anyone. And that’s why they love us.”
So what opportunities do c-stores have to truly reinvent their experiences with technology? Let’s take a look.
Many c-stores are looking at expanding their goods and services, and they’re hoping technology can help. For example, the food that shoppers can buy at c-stores is getting pretty amazing.
Buc-ee’s, for example, is a Texas-based c-store chain that’s expanding into Southern states. They have full-sized Texas BBQ restaurants in the middle of their stores (they do have some of the largest c-stores in the world) and much more—it’s why Food and Wine ranks them #1 among America’s best convenience stores.
And c-stores are going all in on other new food service offerings, like healthy options. According to Food Business News, 70 percent of c-stores are seeing increases in the sales of items like fruits, nuts and vegetables.
“The convenience retailing industry is committed to providing better-for-you choices in stores, and the numbers show that consumers are supporting this effort,” said Jeff Lenard, vice-president of strategic industry initiatives at the National Association of Convenience Stores. “Today, it’s almost expected that stores offer fresh and packaged better-for-you choices for customers.”
C-stores are also turning to contactless experiences, whether that’s unlocking a pump with your cell phone, using a mobile app to order and pay for foodservice to be delivered curbside or zooming through touchless self-checkouts with futuristic-sounding experiences like AI-enabled age verification.
They’re also looking to redefine what c-stores even look like. Some c-store brands are building drive-thrus to capitalize on the convenience offered by this restaurant industry staple. Wawa, for example, last summer announced plans to build a drive-thru and curbside pickup-only store.
Other c-store retailers are looking at alternate but recurring revenue streams using subscription models. Cumberland Farms, for example, offers a coffee subscription service where you can get two cups a day for $25, and RaceTrac offers a discount fuel subscription. It’s another way to build a universe of seamless engagement that goes beyond just the point of sale.
Digitally transforming a convenience store’s operations is the only way to start turning these future-proofing innovation dreams into reality. But it isn’t always easy. One of the factors keeping c-stores behind is complexity.
Indeed, Fuels Market News recently found that 96 percent of c-store owners and operators said they’d be open to adding more innovations if it was easier to implement them. And only 49 percent said that “their current store IT infrastructure was an engine for innovation and delivering new in-store customer experiences.”
That’s the case for many c-stores who have outdated, siloed infrastructures that lack the agility to adopt digital-first technologies. So, while it may have been easier for goPuff to develop a business model that uses an app to deliver over 2,000 products—from ice cream to pet products—charging a cheap ($1.95) flat fee, they had the luxury of not being tied to a legacy system. Because, like many challenger brands, these digital natives were born on the internet—not trying to adapt to the internet.
Siloed legacy systems make it hard to share data, which is the bedrock of the digital-first technology driving the convenience consumers love so much. Mobile payments, digital signage, biometrics that give you real-time, actionable data so that you can understand your customers better than goPuff—are often out of reach with legacy systems.
But, ripping and replacing can simply be too expensive. Plus, it’s a daunting task.
Let’s say you weigh the costs of keeping your legacy system against the spend you’ll need to make on a new system and it turns out that the latter is actually going to cost less in the long run. So, you decide it’s time to leave your legacy behind—and then you begin looking into what that means beyond the price tag.
The disruption to your operations and services may take one, two or even more years. And then there’s the chance of losing data and, more important, customers. Once implemented, training staff on your new system will also require time and employee buy-in (with rising labor costs that isn’t a small consideration). And the amount of planning for all of it, well it’s easy to see why c-store owners and operators get overwhelmed by the idea of replacing their legacy system.
So, what can forward-thinking c-store brands do? In a word: virtualize.
Even though the word “virtualization” is used a lot, people outside of IT might not understand what it is—perhaps you know that it’s something you can’t reach out and touch. Basically, virtualization means creating a virtual, not actual, version of software that’s not running on the actual hardware.
For retailers, store virtualization means moving the “brains” or the operating system, software and logic off of each piece of hardware (like a POS terminal) and onto a virtualized server inside the store. Now, the retailer can control the entire store and entire retail estate from the cloud, pushing updates to every device and checkout lane or standing up newly acquired stores at one time, instead of store by store, lane by lane, device by device.
Related: Retailers saw 164% ROI with store virtualization. Read the report.
Virtualization allows a retailer’s existing system to play host to virtual products, delivering the agility to easily add, turn off and update experiences and technologies. It means being able to optimize their old hardware and extend its’ shelf life—easily making upgrades, deploying new programs and saving costs, on top of new innovation capabilities.
Now that purpose-built store virtualization technology is helping convenience store brands get past the limits of legacy technology while delivering major ROI, retailers are looking to update their systems and experiences; 68% say investing in IT in 2021 is one of their top priorities.
And investing in the right technology works. Family Express Corp., for example, is a convenience store retailer with more than 70 stores in northern and central Indiana. They added new frictionless technology and a new loyalty app for their customers, in addition to driving new experiences like their bean-to-cup program and smart fuel pumps.
Not only did this investment help Family Express help deliver even more convenience for customers (and employees)—it led the brand to being named 2020 Technology Leader of the Year by Convenience Store News.