Convenience

Blog: Self-Service in Convenience Retail: What Do Location, Speed and Food Have In Common?

September 25, 2019 | REINT JAN HOLTERMAN

Convenience is what customers are looking for these days. But what do these customers really want? In this blog, I’ll try to dive into this topic based on a 2018 NACS study. Mind you, there will be a lot of stats in this text, but those numbers tell a fascinating story—let’s take a look!

 

Convenience retail: the place to be

Yes, that’s right! Convenience retail is the place to be, and it is growing faster than ever. According to a 2019 Edge report[1], the convenience retail channel will “grow faster than any other mainstream store-based channel in sales and store count” between now and 2023. With a 5.7% sales growth rate, it outpaces all other retail channels, including fast growers like cash-and-carry and discount stores. The report further states that over 53,000 new c-stores stores will open globally over the next five years.

 

Growth drivers: urbanization and more frequent shopping

The drivers for this enormous growth in convenience retail are the ongoing urbanization (both in developed and developing countries), declining household sizes and overall, consumers’ preferences for smaller and more frequent shopping missions. Moreover, their proximity to urban areas make c-stores the perfect candidates for offering new services like picking up “click & collect” items – driving more traffic to the stores and increasing impulse purchases – or offering a quick-service restaurant inside. C-store retailers must evolve with consumer demands to grow market share and to deliver on the promise of convenience, yet c-store retailers cannot do this alone. They need the right store automation technology – and business partners – to continue to meet consumer needs and keep their competitive advantage.

 

What consumers want: location, speed and food

Modern consumers crave personal, convenient and fast service. Innovations like self-service food ordering kiosks, self-checkout counters, mobile payments and real-time personalized offers all contribute to a great in-store experience. Convenience is king for the c-store shopper.

 

But, what do today’s consumers consider to be ‘convenient’? A study carried out by NACS found that it boils down to location and speed of service. Sixty-three percent of consumers indicate they visit a c-store because it is either close-by, or offers much faster service than a traditional grocery store – or both. Ninety-three percent say they live within a 10-minute range of a c-store, while 45% indicated they spend less than three minutes inside a c-store. Their purchases are typically consumed within an hour, so in most cases this will be a snack, a beverage or a light meal.

 

Fuel drives traffic to the store

The NACS report also notes that 47% of fuel purchasers go inside the c-store at least once a week. Twenty-eight percent even shop inside multiple times per week or even daily. The symbiotic relationship between fuel and the c-store should not be underrated – it’s a powerful tool fuel retailers have that their marketing strategies should build on. And the research shows that savvy retailers already are: Over the past three years, the number of people who fuel up and then afterwards actually go inside the store has grown by more than one-third, from 37% in 2015, to a whopping 48% in 2018!

 

Speed is of the essence

As I noted above, about half of your consumers are in and out of the store in less than three minutes. If we look at a five-minute interval, this includes 80% of c-store visitors.

 

A detailed time study produced by NACS shows how the average consumers spent those couple of minutes effectively:

Tags

Convenience

(Source : NACS, 2018)

 

Of the total 213 seconds needed to purchase one or more items in the c-store, just over two minutes (134 seconds) are spent inside the store. Inside the store, 71 seconds are spent on selecting items, and yet another 63 seconds (47% of the time) to wait in line to pay and actually pay for the items selected. So of the total time spent in the store, 47% does not add any value to the shopping trip and can be considered ‘time wasted’ from a consumers’ perspective, as he merely waits to pay for his item.

 

Self-service drives increased consumer spending

It’s clear there is a lot to gain if a c-store offers a self-service checkout kiosk with food ordering capabilities. Just imagine that the 63 seconds spent on waiting and paying instead could be used to select and customize food orders instead!

 

It is not hard to see this would not only yield extra revenues – as people tend to order more, and more expensive items if they have more time – but also give a boost to consumer engagement as ‘wasted’ waiting time is now turned into valuable additional shopping time!

 

The results of using self-ordering kiosks in quick-service restaurants (QSRs) are very encouraging. According to a recent article on  PYMNTS.com, the increase in consumer spending when ordering through self-service kiosks in QSRs can be as high as 30%. Sheetz and McDonald’s are both great examples of QSRs having successfully introduced self-service food ordering into their stores.

 

To close off with one final statistic: according to the same NACS study, 65% of frequent c-store shoppers are interested in technologies that allow for self-service ordering and checkout, so they can skip the line and pay instantly with no further cashier interaction.

 

How Diebold Nixdorf can support you

 

The c-store of the future is based on a convenient location, is combined with a fuel station to ensure a steady stream of consumers, and offers an array of snacks and food options that can be self-ordered and paid for, reducing the time spent on waiting in line and paying for your purchases to a bare minimum.

 

We’ll be at NACS Show Oct. 1-4 in Atlanta, Georgia, showcasing the industry-leading capabilities of our Vynamic™ FCx Self-Checkout solution. Visit us at booth #3947 to take a test drive and see for yourself how we can help you increase engagement and drive loyalty throughout your entire c-store network. Learn more.

 

 

Edge: Global Convenience Stores Channel Report, April 2019