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Convenience Store Technology Insight Report Convenience Powering the Retail Edge Powering the Retail EdgeStore Technology The challenges, the priorities, the future..... Powering the Retail Edge Powering the Retail Edge The Demand Powering the Retail Edge Powering the Retail EdgeFueling for Convenient Convenience In-Store Technology Consumer expectations for frictionless payment options, including with Next Level scan & go technology, mobile POS and line-busting, that expedites the checkout process have fostered a demand for increasingly sophisticated in-store technology. According to a recent report by NACS and public Technology research firm PSB, 165 million people shop at a c-store every day during Powering the Retail Edge Powering the Retail Edge peak seasons. At the same time, the report underscored the need to provide more convenient payment technologies for this growing Innovation customer base. Checkout C-Store In the world of convenience, c-store retailers cannot afford speed and wait shoppers want Convenience store executives view inconveniencing their on-the-go consumers with long wait times at the times matter: technology to their physical store as platforms for checkout. What’s more, with the rise of third-party convenience store get them in and out faster: technology innovation, but concerns delivery services such as GoPuff, UberEats, DoorDash and GrubHub 45% over aging hardware, cost and consumers now also expect to be able to buy meals, snacks and of shoppers said security limit innovation capabilities, additional items from their nearest convenience store online and have they entered and 44% according to new research them delivered to their doorsteps. left convenience of convenience commissioned by Zynstra. stores with a store shoppers As the need for convenience continues to increase for today’s time- purchase in hand said they would in under three be interested in The c-store has long been a staple in strapped consumers, c-store retailers recognize that their stores need minutes. ¹ technologies that consumers’ world, providing the ultimate new ways to delight and engage consumers. However, constraints allow them to pitstop for road trips, last-minute items, a including costs and aging IT infrastructure are current pain points instantly pay and quick coffee break or meal. But unprecedented limiting the ability to innovate. Top that with the increasing competition skip checkout lines. 2 consumer expectations and shopping behaviors from the Amazon Go convenience store concept, and c-store retailers in the retail and grocery industries are putting face a number of challenges. pressure on c-stores to create new levels of Kim James, Circle K’s Senior Director of Excellence, Merchandising and Marketing, challenged c-store executives to consumer engagement and convenience. face these issues during her NACS panel discussion. She said now is the time to ask three pivotal questions: Increasingly, technology is seen as the answer. “How can we act; how can we take charge; how can we embrace our customers in a different way?” ³ ¹ https://csnews.com/consumer-survey-finds-c-stores-still-reign-supreme-convenient-locations-fast-service ² https://www.businesswire.com/news/home/20181128005464/en ³ https://csnews.com/evolution-convenience-centers-customer-experience 3 v The Challenges Results The survey found c-store retailers of Creating know they need to implement Convenience enhanced IT features to continue offering their consumers higher levels As c-store retailers look to engage their consumers in of convenience, whether that be at new and different ways through technology, a majority of them face common pain points in elevating the in-store the pump, in the store or home experience. delivery. Zynstra commissioned a survey by Censuswide to identify the priorities and obstacles c-store retailers face as they look to innovate within their stores. However, obstacles to doing so include: Methodology • The research focused on Aging hardware infrastructure c-store directors and IT managers from that’s expensive to maintain U.S. convenience store chains with a • physical footprint of 20 to more than Difficulty in adapting their existing 500 locations and average revenue IT to answer consumer demand between $10M to more than during peak shopping hours $999M. • Concern over cost of implementing new technology 4 5 Looking to Furthermore, c-stores’ current IT infrastructure also the future Aging IT Infrastructure 96% prohibits success during peak trading hours, as only C-Stores responded that upgrading customer 37% of survey respondents answered that their current loyalty initiatives and improving staff is a Barrier to Innovation According to the survey IT system is very prepared to cope with consumer productivity through technology are the top results, 96% of c-store directors demand during these busy periods, leaving nearly 2/3 of two key IT priorities, followed by: Most c-stores can offer only the most basic functions given the and IT managers agreed that if respondents only somewhat or not very prepared • Reducing cost and improving operational limitations of current IT infrastructure and bringing new technology it was easier to implement new to answer consumer demand in high-traffic and rush innovations into the stores is difficult. The majority of survey efficiencies applications and services, hour times. respondents said they are constrained by a lack of resources. they would do it more • Enhancing the security of their IT in stores As c-stores map out their plans for in-store technology innovation, often. • Utilizing technology to improve the identifying how to overcome IT cost challenges, solving aging shopping experience hardware pain points and delivering upon consumer demands during 55% Additionally, when asked about peak shopping hours are high on the agenda. rolling out seasonal promotions, 55% of respondents answered that Not surprisingly, 49% of c-store survey respondents said that the 49% their IT infrastructure is somewhat or What are your key IT priorities? And, when asked to main IT challenge they face in-store is the high cost and risk of not very prepared. This is a key area as describe the impact of their the range of products being demanded Upgrade customer loyalty programs 39% downtime associated with a potential rip and replace of entire store current store IT infrastructure by modern c-store shoppers are 45% Improve staff productivity through infrastructure to bring it up to date. In a world where consumers on their business, only 49% of changing fast and it is essential that Similarly, only 45% of 39% respondents said it was an technology demand convenience and speed, c-stores cannot afford downtime. c-stores have the capabilities respondents said their IT engine for innovation and the to react quickly. infrastructure is very prepared Reduce costs and improve operational delivery of new in-store to cope with increased need 38% Those with 250+ stores were found to have a higher percentage in efficiencies customer experiences. for uptime, leaving 55% Enhance the security and compliance of these IT challenges, indicating low levels of IT agility for larger c-store somewhat or not very 37% estates based on the complexity of their incumbent IT infrastructure. prepared. in-store IT Use technology to improve the shopping 36% experience While the drive to deliver innovation within the c-store The next top 5 IT challenges identified by survey respondents included: Manage your in-store IT to reduce the impact of impending end of life challenges being exists, cost constraints and aging hardware make 29% the goal hard to reach, as they present barriers to posed by operating system and application vendors innovation. Support new store openings (organic or 26% 47% 35% 35% 33% 32% through acquisition) Inability to cope Inability to drive Aging hardware Inability to bring High costs Refresh POS infrastructure 20% associated with with lines during upsell promotions infrastructure new features, compliance and peak trading from multiple that’s expensive to apps and digital security protocols hours and high touchpoints in the maintain engagement season store and at the inside the store pump due to POS “With one in seven stores getting remodeled every year at a cost of $400,000, that can limitations with existing systems put pressure on some stores whether to modernize operations or exit the business,” said NACS Vice Chairman of Research Andy Jones, and president and CEO of Sprint Food Stores Inc., Wrens, Ga.⁴ 6 ⁴ https://www.cspdailynews.com/mergers-acquisitions/us-convenience-store-count-dips 7 “Consumers are redefining what convenience means to them, In response to the Amazon threat, survey 91% and as a result, today’s retailers Amazon Go and the respondents identified key technologies There was also a strong appetite among must be extremely tuned in that were important to the future of their survey respondents for putting the right C-Store Omnichannel business. Respondents listed the below technology into the store associates' to the wants and needs of the technologies as VERY important: hands to accelerate checkout and move the individual consumer,” said Jeff Experience transaction away from the fixed register. A Williams, senior vice president combined 91% of respondents identified Amazon Go presents yet another threat to c-stores. With plans mobile POS tablets and kiosk-based POS of retail services for Nielsen. to open 3,000 cashier-less stores in the next three years, they for checkout in aisle by store associates “Convenience players will need will become one of the largest convenience store groups in the and self-checkout capabilities as to continue to seek growth industry. While c-store retailers know they will have to offer 43% 43% VERY important. scan & go opportunities amid a fiercely customers new levels of frictionless checkout and omnichannel mobile payment convenience to compete and continue gaining customer app aggressive environment, whether loyalty, they face pain points in doing so due to cost and lack of that’s through exploration of consistency across their technology infrastructure.
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