Blog: The Store of the Future offers Proximity, Speed and Convenience

November 14, 2019  |  REINT JAN HOLTERMAN

Online is good, but in some cases, in-store is even better! Sucharita Kodali, VP and Principal Analyst at Forrester explained this during a recent webinar on top trends in the fuel and convenience industry. People appreciate the convenience of online shopping, yet 40% of consumers indicate they would like to see and touch the merchandise before buying. And about a third of consumers say they do not want to wait at all – they would rather drive or walk over to a c-store to get their snacks, drinks and lotto tickets without any delay.

Frictionless fulfillment is more important than ever.

These conflicting desires are supported by other research as well. According to an October 2019 Edge report (login required) titled “Future Retail Disruption 2019/2020”, proximity, speed and convenience are essential. Demographics show that “consumers will be older, less wealthy and live in smaller households, suffering from restricted mobility.” At the same time, younger consumers who are living in urban areas prefer a more individualistic, socialized and faster “on-the-go” and “experiential” lifestyle. Both trends are causing retailers to offer small-box stores that are in densly populated areas, offer more convenient experiences with curated assortments for small households, and provide faster, frictionless fulfillment services for frequent small-basket shopping missions. 

These concepts are not just for fast-food or convenience stores; the same ideas of proximity, speed and convenience are beginning to resonate with larger retailers as well. A good example of this is Target, which is executing on a smart omnichannel strategy where online and in-store journeys are flexibly interconnected. Target has clearly invested in evolving its business model, testing out new concepts like small-format stores, curb-side pickups, drone deliveries and using robots in store. It now has around 100 small-format stores that are turning out to be its “biggest weapon against Amazon”. With one-hour in-store pickup, and same-day delivery through its Shipt service, Target has seen very strong results in Q1 and Q2 of 2019. And it reconfirms that physical locations are still the real centerpiece in Target’s delivery network. 

Location, location, location!

More retailers are investing in proximity, speed and convenience, quickly expanding into omnichannel services like same-day pickup, and opening up small-format stores. Just think about recent examples including Ikea’s city-center stores in Paris and New York, the Jumbo City stores in the Netherlands, the Sephora Studio in Boston, and Carrefour City stores in France.
This changing retail landscape with an appetite for smaller-store formats in city centers puts c-stores in a unique position. More often than not, c-stores are already located at prime locations, close to main roads or in urban areas, making it very attractive for consumers to enter the store and grab a few items on the way back home. They could also very well serve as “last-mile delivery hubs” to pick up a parcel ordered online, as Kodali noted in the webinar.

As we already saw, today’s consumers are looking for retail concepts that offer proximity, speed and convenience—and c-stores are a perfect match. The added value of a c-store is ease and proximity, driven by consumers’ desires to quickly enter and leave again. This puts a high emphasis on having well-defined in-store operations that are efficient, flexible and accessible. 

What’s driving customers into the store?

For most customers, efficient shopping means spending less time standing in line. Research shows that on average, a c-store customer spends 31% (!) of their time waiting in line to pay for their purchases. That’s not only very inconvenient, it can also have a negative impact on revenues, as some customers will walk away and head to another c-store. Nearly half of customers say that accessibility, or how easy it is to get in and out of the store, determines where they will shop. And about the same number indicate that flexibility in payment options is critical for them to decide where to shop (download our new infographic designed to help you crack the code on making c-stores more convenient than ever before):

(Source: Market Force Study and NACS “Time to Shop” whitepaper)

Self-checkout enhances speed and convenience.

One key element in making c-stores more convenient is adding the option to self-checkout (SCO) next to the traditional (manned) checkout station. “C-store customers want and expect to be empowered in their shopping, and self-checkout is a great way to accomplish that and offer – above anything else – speed and convenience,” noted Diebold Nixdorf’s Director, Fuel & Convenience North America, Uli Seeman, in the webinar. On top of that, SCO can help c-store retailers who operate in a market with an unstable work force, pressured by high labor turn-overs and steep increases in minimum wages. And with an industry-first solution that combines SCO with self-service food ordering on a single kiosk, the total spend on food orders in c-stores increases up to 30%.

In summary: c-stores already have the proximity and are located on prime locations – all they need now is to double down on speed and convenience to become an absolute winner in today’s changing retail landscape!

Interested in discussing how our SCO solutions could transform your customers’ in-store experiences? Let’s start a conversation

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