Returning to the Corner Market
How "going local" can benefit convenience stores, even in a rocky economy.
By Joseph Bona & James Owens || July 27, 2022 || Originally posted on csnews.com
With inflation reaching levels not seen since the 1980s, the economy is entering a new phase of uncertainty. And so, too, is the North American convenience store sector, which has changed tremendously since the days of big hair and parachute pants.
Specifically, will high gas prices result in fewer trips to our sites and stores? What will happen to foodservice-related traffic and sales now that so many companies have gone all-in on elevated menus? What can operators do to stay relevant as their core customers grow increasingly price-conscious?
Fortunately, consumers now see c-stores as offering greater value than traditional quick-serve food outlets. Moreover, many companies have already rationalized their SKUs to make room for those foodservice programs.
Consumers are unlikely to stop visiting their local c-stores over the perception of a "convenience premium" for the likes of Styrofoam coolers, paper towels and electronic accessories. But thanks to rationalization, these items are even less important to c-store profitability than in the past.
Indeed, it is likely that many c-store visitors willrespond to economic uncertainty by trading down from higher-priced restaurants and choosing convenience retailers instead. And with fuel costs at record highs, they will also want to save on gas by going to places that are right in their neighborhoods — a definite plus for convenience stores.
Leaning Into a Local Identity
All of these trends favor a strategy that the best c-store operators have already been focused on for several years: giving people the in-store experiences and in-person social interactions they crave. Conveying a strong sense of local identity can be a smart way to add some punch to such efforts.
Here are four ways to go local in merchandising, design and site/store layout:
1. Bring in Local Options
Product names, ingredients and flavor profiles can communicate a lot of information. Think of the effect of having branded shrimp and grits at a store in South Georgia, or a locally made, contest-winning cheesesteak in suburban Philly.
Taking this approach does not mean you must scale back the national brands like Budweiser, Coke and Lay's. Just a few prominently placed, locally branded SKUs can make a huge difference.
In addition to these branded items, retailers can incorporate local hotspots into shared spaces rather than just Subway or McDonald's — for example, the second or third location of a legendary barbecue joint that started as a hole in the wall.
2. Offer Opportunities to Touch & Feel the Merchandise
Certain shoppers will continue to prefer picking up products, inspecting their labels and physically comparing them with other offerings. So, even as you add the likes of contactless vending machines, drive-thru lanes, pickup windows and Pret-A-Manger-like packaged meals, make sure you offer more traditional options, too.
Open chillers filled with fresh-made sandwiches, or wooden crates piled high with colorful fruits and veggies, call to mind the bodegas and corner stores of your customers' childhoods.
3. Localize Your Interior Design
Convenience retail leaders are adept at using tangible and visual cues to create friendly, welcoming experiences. Design is really just storytelling; it's how c-stores communicate their brand message and create a sense of place. Basic building blocks here include lighting, materials, colors and graphics, all of which can be deftly used to emphasize human connection and that local touch.
The key is to strive for a unified and authentic experience illustrated with accurate images and details. Fast-casual restaurant brands like Slim Chickens and Raising Cane's do a great job with this by using local and regional sports team memorabilia as décor.
If your company has a colorful and inspiring backstory, then by all means tell it. But brands put together with stock photos and made-up narratives are more likely to ring hollow. Tread carefully.
4. Get More Creative With Outdoor Spaces
In select markets with larger sites and lower real estate costs, some c-stores could use outdoor space more creatively. (Love's Travel Stops' newest prototypes offer dog parks.)
In one community, picnic tables, free Wi-Fi and a food truck with out-of-this-world fish tacos could make all the difference. In another, the store's location next to a popular, multiuse trail could create an opportunity to offer customers a bike repair station and an outdoor gourmet coffee stand.
Each location is different; look for cost-effective ways to connect the outdoor and indoor customer journey.
Don't Forget the Retail Fundamentals
The c-store industry has always pivoted to respond to small and large shifts in consumer behavior.
It all started back during the post-Prohibition 1930s, when Texas entrepreneur Jefferson "Uncle Johnny" Green started selling everyday staples, including newly available beer and liquor, from the dock of an icehouse. Green’s convenience-oriented concept — then called Tote'm Stores, but eventually known as 7-Eleven — took off quickly. That's because, again and again, the company identified and responded to emerging consumer needs, from extended hours to parking-lot gas pumps.
Today's c-store companies should do precisely the same thing, even if those consumer needs can vary quite a bit. For example, companies that are adding walkup windows, drive-thru lanes, contactless vending and the like should make sure their stores function as efficiently as possible in terms of operations, logistics and traffic/pedestrian flow. Design and engineering firms focused on the convenience sector are honing best practices related to these newer approaches, which are particularly popular with Gen Y and Gen Z shoppers who live and breathe technology.
At the same time, convenience retailers also need to identify and meet the needs of shoppers who want to put down their smartphones and make local, human connections. Here, too, retail designers have learned powerful lessons.
There is no contradiction between focusing on both technology and the down-to-earth fundamentals of the corner market. Ultimately, motivating people to shop your stores is all about your ability to connect with them at every touch point — whether virtual or "IRL."
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