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Convenience 2.0: Lessons learned and next steps for c-stores post pandemic

Gavin Bisdee, group marking director at Zynstra, an NCR company, offers insight regarding the levels of convenience customers now expect during the buying process and why c-stores must find a way to deliver on convenience 2.0 while solving cost challenges.

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September 1, 2020 by Gavin Bisdee — vp global marketing, Zynstra

The past few months of the coronavirus pandemic have merely accelerated many of the technology realizations convenience stores (c-stores) were toggling with prior to the global health crisis. Rising labor costs coupled with day-to-day infrastructure, support and maintenance costs continue to eat into c-stores' operational efficiency. In parallel, the rapid changes in consumer buying habits due to social distancing, such as curbside collection, full-service fueling, click & collect, home delivery, grab & go and more, continue to place pressure on c-stores to deliver the next phase of convenience — convenience 2.0.

COVID-19 convenience lessons

A recent survey conducted by Censuswide on our behalf polled 103 senior level U.S. IT managers and business directors from large convenience fuel retail businesses to identify the lessons c-stores have learned during this time. Most notably, the survey demonstrated that the pandemic has changed the face of customer buying habits permanently and c-store retailers have realized their technology needs to evolve quickly, in order to follow suit.

For example, 64% of survey respondents identified they need to adapt their technology to keep up with newly formed consumer behaviors and 81% of c-store retailers said COVID-19 has elevated the role IT plays in the eyes of c-level decision makers. What's more, c-stores realized technology maturity can either hinder or propel c-stores' ability to adapt to new customer buying habits, with 63% of respondents identifying that legacy infrastructure held them back from making changes, and an inflexible infrastructure has delayed the speed at which they would have liked to adapt their store operations in the face of the pandemic.

When asked about the main IT challenges faced during COVID-19, the overall impact on staff productivity, speed to market and ability to quickly remediate store IT was compelling. In fact, 43% of respondents identified the cost of new devices required to meet the needs of new customer buying habits, such as third-party order and delivery integrations, as being a major challenge. In addition, many c-stores learned that mobile technology, including mobile payment apps, home delivery, self-checkout and mobile pay at the pump is a must-have for c-stores, but legacy technology poses barriers, delaying the speed of implementation.

Convenience 2.0: The future of c-stores

As c-stores come out on the other side of the pandemic, technology will be a vital tool to offer consumers the safe and frictionless experience they expect. When asked which technologies c-stores considered important for their future, the focus was on providing a variety of checkout options for all demographics including home delivery, order online pick up curbside, self-checkout, full-service fueling and scan & go. The key emphasis here is that c-stores don't want to alienate specific customer segments and recognize that many customers will have been forced to experiment with new checkout technology options during the pandemic and may well continue to use those options in the future. Additionally, c-store retailers will be looking to implement technology solutions to automate store IT processes to improve efficiencies, upgrade customer loyalty programs, refresh POS infrastructure and enhance the security and compliance of in-store IT among other things.

However, maintaining margins as c-stores rapidly adapt to market changes is complex. Even more so when rising labor costs and social distancing measures are impacting c-store retailers' ability to reduce costs in the business. In the last year alone labor costs have risen 7.2% and direct store operations costs 6%. As c-stores continue to review their IT ecosystem and plan for the future, they are recognizing that change begins with their POS infrastructure. Our research showed that only 10% say they have the exact POS infrastructure that will serve the business now and, in the future. A growing number of c-stores want to invest in technology that gives them maximum flexibility in the long term, as 29% seek a solution that will keep their legacy POS running with minimal cost while they buy time to see how checkout needs evolve.

The impact of COVID-19 will mean c-stores need to find a way to evolve their cost structure as costs are going to inevitably rise. This can leave c-stores in a quandary: Most simply don't have the time, resources or funds to invest in a complete IT overhaul, however, recognize that to do nothing is not an option. Moving to a software defined store strategy provides the solution. With this model, c-stores can simplify store IT management and innovate at scale with less costs. Ultimately, it's about having the flexibility to adapt quickly to consumer shopping habits, whether it's automating online order fulfillment, launching curbside pickup and home delivery or re-designing the stores for more self-checkout options, speed to market is essential.

The levels of convenience that customers now expect during the buying process have been elevated significantly and c-stores must find a way to deliver on convenience 2.0 while solving these cost challenges.

Gavin Bisdee is group marking director at Zynstra, an NCR company.