Experts foresee plenty of opportunities for retailers to separate themselves this year, driven by consumer demands for quality and an evolving digital landscape.
Delivery will continue to be an area of focus for c-store operators this year, experts say. Retrieved from 7-Eleven press release.
Jeff Lenard is longing for some normalcy in the c-store industry.
NACS’ vice president of strategic initiatives said he’d “love a boring year” in 2023, as the past couple have been riddled with challenges resulting from the COVID-19 pandemic and other socioeconomic issues. This past year, especially, retailers dealt with increased labor and supply chain shortages, rising gas and merchandise costs and even an increase in crime in some areas.
“You could argue 2023 will be the first year of normalcy in a while,” Lenard said. “You could also argue 2023 will continue to force retailers to pivot and react quickly to things few saw coming.”
While 2022 is in the rearview mirror, the many challenges they face aren’t. But experts also foresee plenty of opportunities for c-store retailers to separate themselves from the competition, driven by consumer demands for quality and an evolving digital landscape.
“Plan for normalcy, but always prepare for the pivot,” Lenard said.
Here are the top trends likely to dominate — and possibly disrupt — the c-store industry in 2023.
Retail media will take off
Two of the largest c-store chains in the U.S., 7 Eleven and Casey’s General Stores, launched retail media networks in quick succession late last year, positioning themselves at the crest of what experts believe will become a breaking wave in 2023.
“In other channels, many retailers have a retail media network now and now it’s starting to trickle down to the convenience channel,” said Scott Love, senior vice president of retail client solutions for market research firm IRI.
Retail media has taken off in large part due to Google’s decision to do away with third-party cookies, an audience measurement tool frequently used by advertisers. The value of retailers’ first-party data — information that customers willingly give a brand — has grown rapidly as a result, and Emarketer estimates that by 2024, more than $61 billion in digital advertising will flow through retail media networks.
Jordan Berke, founder and president of Tomorrow Retail Consulting, said c-stores can leverage their unique properties — namely, impulse purchases and fuel — to earn valuable media dollars from suppliers.
With that growth come challenges, however. Berke said retailers and retail media firms have had a tough time recruiting top talent to fuel their networks. And suppliers have complained about a lack of standard practices across platforms.
Ultimately, retail media may further widen the divide between large chains that have the ability to spend large sums on digital innovation and the industry’s smaller players, Berke said.
“The dimension of retail media that I think most people underestimate or don’t appreciate enough is that the media business innovates at a pace that I would argue is five times the pace of retail,” he said.
C-stores — a place to hang out?
Retailers’ growing focus on foodservice underscores the belief that c-stores can become community hubs where shoppers want to eat, drink and spend time, instead of simply a place to fill up on gas or grab a bag of chips. And with electric vehicles on the rise, this is becoming even more prevalent, as consumers could be on site longer as they charge their cars.
By becoming more of a “hangout” where consumers can not only order food but spend time and even relax, c-stores can gain more foodservice traction, said Donna Hood Crecca, principal for market research firm Technomic.
“Consumers are into the type of seating and offering in a c-store that invites you to stay a while,” she said. “For that younger consumer to come in for half an hour, watch TikTok, there’s an opportunity to build that.”
For example, retailer Tri Star Energy operates Twice Daily c-stores throughout Tennessee, Alabama and Kentucky, and also owns White Bison coffee shops. About 16 of the 70 Twice Daily stores have an adjacent White Bison, all of which include indoor and outdoor seating, mobile charging ports inside the restaurant, a full menu of espresso and blended coffee and tea varieties, pastries and more.
And some of these locations don’t offer fuel, either.
“It feels like you’re walking into a Starbucks,” said Jeff Hoover, director of strategy and insights for customer experience vendor Paytronix.
Using AI to improve labor
Some experts foresee technologies like cashierless checkout and AI-enabled scheduling impacting how c-stores approach labor next year. Gautham Vadakkepatt, director of the Center for Retail Transformation at the George Mason University School of Business, noted that such technologies can not only remove “mundane” tasks from employees, but even offer them the “safety and security” needed to do their jobs more efficiently.
“[Technology] replaces jobs and creates new jobs,” he said. “That’s historically been the trajectory.”
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