What grocers can learn from c-store trends

Supermarkets and convenience stores are different businesses, to be sure. But it's smart for grocers to keep an eye on the emerging trends in c-stores, especially as convenience retailers delve deeper into food sales and retail foodservice. 

The c-store industry's big trade show, the NACS Show, recently wrapped up in Atlanta. Here's a look at some of the key trends identified there by editors from CSP Daily News. 

Exploring retail media

Marketers are facing many challenges. Cookies—the small files stored on an internet-user's computer—are going away, so it will be harder to trace and follow consumers on the internet. More states are enacting laws around user privacy. And consumers have options to limit their data sharing, industry expert Art Sebastian said.

There are a lot of ways to navigate that, Sebastian said, including leaning into retail media networks. A retail media network is an advertising infrastructure that comprises a collection of owned digital, offsite digital and in-store channels that are offered by a retail company to third-party brands for their various advertising purposes, he said.

More and more retailers are launching these, from Amazon to Walmart to Gopuff, as well as convenience-store chains like 7-Eleven’s Gulp Media Network and Casey’s General Stores’ Casey’s Access. Sebastian, retail strategist with Nextchapter LLC, previously helped launch the retail media network at Casey’s, where he worked for more than four years.

“Retail media networks in a very short period of time will surpass even linear TV as the biggest bucket of advertising spending,” Sebastian said. “So, knowing that all these different formats of retailers are launching their version of [retail media networks], knowing that brands have challenges in terms of targeting consumers, knowing that spending is increasing, my callout to the convenience industry is: You may want to figure out how to participate in this.”

Menu innovation

Operational innovation is not the same as operational improvement, according to Stephanie Hurt, head of food innovation and development at Tulsa, Oklahoma-based QuikTrip.

“Innovation is the process through which we turn strategy into new products or services,” Hurt said during a session on menu innovation. “Saying, ‘Oh, if I just change one thing I’m innovating’—that’s not innovation. I’m talking about a whole new process, a new way of doing something: new methods, new processes and services.”

These breakthroughs are not just operational deviations but deep changes, Hurt said. “It’s a real powerful weapon if you can harness this in an economy overdosing on hype,” she said. “It offers a meaningful and sustainable way to get ahead.”

One example Hurt gave was Taco Bell years ago revamping its food preparation process. The company outsourced much of the ingredient creation and concentrated just on the assembly of food in restaurants.

“They got it to 34 seconds from the time you start making a food item to giving it to the customer,” she said. “This changed their game, lowered cost and increased customer satisfaction.”

Slow transition to EV

When it comes to electric vehicles (EV), John Eichberger, executive director of the Transportation Energy Institute, has some advice for convenience retailers: Don’t panic, but don’t ignore them.

“Electric vehicles are a huge part of the future. And they’re a great tool to be leveraged in this path to a lower environmentally impactful transportation system,” he said. “They alone are not going to achieve what the objectives are.”

EV sales hit 7% of the total automobile market this year, he said, citing NACS data. But Eichberger said forecasts for what percentage of sales EVs will be in the future are unreliable and inconsistent.

The increase of EV sales is real, he said, but it is a slow transition.

The cost of low morale

There’s value in building an employee-centric culture. For starters, the cost of employee low engagement to the global economy is $8.8 trillion, nearly 9% of the global gross domestic product. This cost comes in the form of the need to boost recruitment and more.

“Almost three-fourths of employees are not engaged,” said Eric Blumenthal, senior vice president, North America Operating Unit, at Atlanta-based Coca-Cola Co. Blumenthal moderated a session on cultivating an employee-centric culture. Specifically, 59% of employees are not engaged (quiet quitting) and 18% are actively disengaged (loud quitting), leaving only 23% of employees actively engaged in their jobs, said Blumenthal, citing statistics from Gallup.

To combat this, c-stores must ensure that employees feel appreciated and make this part of their culture. Panelist Stephanie Doliveira, executive vice president of people and culture at Altoona, Pennsylvania-based Sheetz, said the company makes it a point to look at work from the employees’ perspective.

“This includes mission, vision, values, but also how easy or difficult it is to get work done here,” she said. “Am I appreciated? Do I have meaningful work?”

New market considerations

Two retail executives offered a revealing look at some of the things they consider when evaluating whether to move their chains into a new geographic market through an acquisition.

Travis Smith, chief development officer of Refuel, based in Mount Pleasant, South Carolina, said a variety of factors comes into play and it’s not a black-and-white consideration.

“There are high-growth markets and there are low-growth markets,” Smith said. “We have a presence in both of those because each has distinct advantages and disadvantages.” Low-growth might be preferrable in one market, depending on what other matters are at play in the market, while high-growth might work better in another.

Meanwhile, Bill Kent, owner of Kent Kwik c-stores, based in Midland, Texas, outlined a few factors he considers:

A new way to check IDs

Convenience stores process 54 million age-gated transactions a day, according to Kyle McKeen, CEO of TruAge. TruAge, created by NACS and Conexxus, is a digital age-verification system that is free to retailers and makes the traditional carding experience more convenient and accurate, according to the companies.

The program could prove particularly useful in states that are transitioning to mobile driver’s licenses, like California. Through a pilot program, people who enroll for the state’s new mobile driver’s license can at the same time also opt into TruAge. Doing so will provide users a TruAge code that can be used at select retailers to verify age, McKeen said. So far, the number of people choosing to sign on to TruAge is exceeding expectations, he said.

Retailers in other states should take note as digital licenses are spreading. McKeen said there are several other states that have introduced mobile driver’s licenses, including Colorado, Maryland, Georgia, Arizona, Florida, Mississippi, Oklahoma, Utah, Missouri and more.

Product is king

“Product, product, product” tops the list of eight important points in menu development for Tony Sparks, who runs Lubbock, Texas-based Curby’s with the title “head of customer wow.”

It’s crucial to have a product on your menu that differentiates your convenience-store chain from the competition, said Sparks, speaking at a session on menu innovation. “It doesn’t have to be the entire menu,” he said. “It can be one line.”

Other highlights:

Make a game of it

Apple watches and games on phones “are great at making things fun,” said Lisa Ham, director of merchandising and space planning at Yesway. The tie between impulse buying and gamification hasn’t been thoroughly researched in the United States, she said. But in Asian markets, games inside apps offer reward points to use on purchases, which causes people to visit sites considerably more often to earn those points.

For this reason, Fort Worth, Texas-based Yesway has partnered with gaming companies to help build its brand.

“Making sure that you are making buying fun, and your customer is happy and enjoying your brand is really going to drive that impulse sale that you can then utilize in your store for things like snacks," Ham said.

Charged up

“EV charging is more than just a pump,” said Scott Sharabura, vice president of electric vehicle charging at Parkland Corp., a Canadian retailer with U.S. headquarters in Charleston, South Carolina.

Many factors go into EV installation at Parkland, including safety precautions. Good lighting is necessary because people are there for a longer period of time—20 to 25 minutes, he said. Curbside amenities present an additional advantage while customers wait for their vehicle to charge. They have more time to clean their car, so Parkland offers vacuums and garbage cans nearby.

Canopies protect customers from rain, and employees are even trained on maintenance basics so they can understand how it works and help customers.

And when choosing sites, Parkland places EV chargers at locations with hot food offerings, seating and nice bathrooms.

This story originally appeared in WGB sister publication CSP Daily News.