C-stores Leveraging Technology to Drive Sales and Customer Relevance

 

Many of you I’m sure while in college were required to read Spencer Johnson M.D. book ‘Who Moved My Cheese?’ In 2022, all food retailers must ask themselves not ‘Who Moved My Cheese? Rather they should ask ‘How is my customer buying what I have been selling if they are not here?

To date, there have been no reports that consumer are loosing weight at droves, there are reports of the ‘pandemic 15’ as Americans seem to be gaining weight.  That said where are they buying and where are they eating?  

Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, stated, “retailers must look beyond their current four walls and empower their brand messaging to become handheld. All the while simultaneously empowering consumers to buy what they have always bought using digital technology.”

Today, the informational superhighway may well be more important to a C-store the traffic count on the street in front of their store. Now is the time that food retail must be bringing branded digital services to the forefront. After all, as regular reader of this blog know C-store primary and secondary target customers Gen Z and Millennials are digital native and they expect fresh fast full service from all retailers.

Now, convenience channel retailers are exploring additional tech-forward services. They include bitcoin ATMs, electric vehicle (EV) charging stations, digital lottery, car wash subscriptions, and more. These amenities are not major profit centers. Rather, the emphasis is on using these services to further differentiate c-store brands, drive traffic, and increase dwell times.

It’s at the intersection of the information superhighway and your retail location that AlixPartners new study interesting insights that our Grocerant Guru® believes all food retailers should read.  Eric Dzwonczyk, a global co-leader of the restaurants, hospitality and leisure practice at AlixPartners, stated, “For years, c-stores invested in foodservice to get people into stores. Now, they’re looking at the next generation of ‘stuff’ to pull shoppers in,” “There’s much convergence of different themes, with formats changing quickly.”

Let’s see what else he found as told to csnews.com:

Electric Vehicle Charging  

EV charging is the most popular new service. Its future seems certain, with President Biden calling for half of new vehicles to be electric by 2030. EVs were expected to represent about 3.4 percent of new car sales in 2021, according to EVAdoption, but the number of charging stations is already rising. In 2018, there were 64,000 in the United States. By 2020, there were roughly 90,000, according to figures from the Alternative Fuels Data Center and consultancy InsideEVs.

“Top of line with everyone is EV,” noted Dzwonczyk. “It’s going to happen.”

The nation’s largest c-store operator, Irving, Texas-based 7-Eleven Inc., is being aggressive about EVs. By the end of 2022, it will install 500 direct-current, fast-charging EV ports at 250 U.S. and Canada locations. Currently, it has 22 stores that offer EV charging. All of these locations are adjacent to major roads and highways.

Other retailers are optimistic but proceeding cautiously.

“EV is evolving quickly,” said Kevin Kelly, senior vice president of hospitality at Westlake, Ohio-based TravelCenters of America Inc. (TA), which will soon have charging at nine of its 275 locations. “Good dwell times spell opportunity. We want to drive people to non-fuel transactions. But it’s emerging technology. We don’t want to invest in the wrong infrastructure. How do you balance the cost and monetize it? Do you build a battery facility or a solar field to supply it? We’re hoping government will supplement.”

According to AlixPartners, 80 percent of EV charging is now done at home, 13 percent is done at highway c-stores, and just 3 percent is done at other c-stores, where dwell time is often short. Hence, not all convenience stores will make for successful EV destinations.

Truck stops and travel centers are well positioned for EV charging. They have interstate locations, with myriad amenities already driving up dwell time.

“We’re not the corner store,” said TA’s Kelly. “Dwell time is long. We have quick- and full-service restaurants and c-stores. You can walk your pet. It’s like a miniature community. Our large sites are a competitive advantage.” TA also serves truck drivers with 29 on-site Verizon stores, 27 barber shops, 26 medical centers, basketball hoops, and fitness centers.

Digital Lottery

Technology, the pandemic and consumers’ desire for convenience are propelling the growth of digital lottery. In 2020, sales increased 25.7 percent, according to Global Industry Analysts Inc. For 2021, digital lottery sales were projected to reach $2.3 billion.

In July of last year, Laval, Quebec-based Alimentation Couche-Tard Inc., the parent company of Circle K, partnered with Jackpocket to begin offering digital lottery through 1,300 locations across Arkansas, Colorado, New Hampshire, New York, Ohio and Texas.

Jackpocket is a licensed third-party lottery app that lets users order official state lottery tickets fulfilled by a licensed lottery retail partner. Digital lottery is not currently legal in all states.

At Circle K, customers receive exclusive deals via the Jackpocket app and by email, including “surprise alerts to drive foot traffic,” said Jackpocket CEO Pete Sullivan. Circle K is promoting the lottery app in its stores, at fuel pumps, in digital ads, via emails, and via a team member incentive program. The app was also rolled out to sister brand, Holiday.

“We’re seeing demand for digital options in every industry,” noted Sullivan. “We want to meet people where they are. We don’t anticipate lottery moving away from convenience stores completely. We’re here to offer an option for those who find it easier to play from their smartphone.”

Not all digital lotteries are app-based. In June 2021, Whitehouse Station, N.J.-based QuickChek Corp. (which is owned by Murphy USA Inc.) launched a web-based platform with Lotto.com that lets New Jersey shoppers purchase lottery tickets on any device without having to download an app or deposit money into an account. Payment is managed by PCI-compliant payment providers.

Don Leech, QuickChek’s vice president of marketing and operations, said the partnership complements the chain’s other digital services. “We’ve been providing convenience through mobile ordering, our mobile rewards app, and the ability to order delivery online. Our [Lotto.com] partnership lets us further meet the needs of consumers who prefer shopping and paying online.”

Bitcoin ATMs

Historically, c-stores have served unbanked and underbanked consumers with services such as check-cashing, MoneyGram, Western Union, and money orders. Unbanked consumers lack a checking or savings account; the underbanked have one but not both.

According to published reports, 25 percent of consumers overall fit into one of these two categories. And among just the millennial generation, 33 percent are underbanked.

These groups are seen as viable customers for bitcoin ATMs, a new, emerging service in the convenience channel. Bitcoin ATMs let users pay cash to buy and sell virtual cryptocurrencies. Bitcoin can be stored in a digital wallet, sent to others, and used as payment with certain retailers. It is decentralized, meaning it is not controlled by a banking system. There are no remittance fees for international transactions and no currency exchange rates. Transactions are stored on the blockchain.

Roughly 3 percent of c-stores currently offer bitcoin ATMs, said Brandon Mitz, CEO and president of Atlanta-based Bitcoin Depot. But with c-stores’ complementary demographics and the need to drive traffic, he believes that number will climb.

“When you bring customers into stores, it creates many opportunities for impulse buys and to learn about products. The largest category of bitcoin users are millennials. Millennials — and Gen Z — value convenience,” Mitz explained.

Bitcoin ATMs occupy an 18- by 22-inch footprint. Retailers receive rent regardless of performance. If machines perform well, the compensation is higher.

Early entrant Circle K is optimistic about bitcoin, with machines in 1,000 stores. Plans call for expansion to 10,000 stores. “Our Bitcoin Depot partnership gives our brand an important, early presence in the fast-growing cryptocurrency marketplace as a convenient destination where customers can buy bitcoin,” Denny Tewell, senior vice president of global merchandise and procurement for Circle K, said in a prepared statement.

Other retailers are unsure about how bitcoin will fit in and are proceeding more slowly. TravelCenters of America, for instance, is piloting 20 deposit-only bitcoin locations.

"It’s in the early stages and not very transactional from a consumer standpoint,” said TA’s Kelly. “Digital interfaces are becoming more important. But there’s uncertainty about how bitcoin will evolve as a consumer tool." 

Are you looking a customer ahead? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.

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