COVID-19 causes change in convenience chains

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COVID-19 causes change in convenience chains

By Dan Berthiaume - 09/11/2020
7-Eleven's cashierless store pilot in Irving, Texas.

Convenience retailers are increasingly adopting cashierless checkout, on-demand delivery, and targeted merchandising programs in response to the impact of COVID-19.

The convenience sector is especially vulnerable to the COVID-19 pandemic. More than most other retail verticals, convenience is dependent upon passing foot traffic and impulse purchases. In an era where consumers are increasingly staying home and buying in bulk online, its underlying tradeoff of higher prices for quicker service becomes less appealing.

However, convenience retailers are not standing still. Following are three technology-related strategies an increasing number of c-store chains are enacting to remain viable in the “new normal.” 

Hold the cashier
When Amazon first pioneered the cashierless convenience store format with Amazon Go in January 2018, it was an interesting novelty. Leveraging computer vision, artificial intelligence (AI) and mobile self-checkout technology to eliminate the need for human cashiers streamlined the shopping experience, reduced store footprint, and freed store associates to perform other tasks. 

Pre-pandemic, 7-Eleven began piloting a cashierless store at its corporate headquarters. However, the high upfront cost of equipping a store with the necessary technology infrastructure to support cashierless retailing left many observers convinced it would not become a widespread offering. 

Since March 2020, convenience retailers including Circle K and QuickEats (operated by Aramark) have launched cashierless efforts. In addition to streamlining brick-and-mortar operations, the model minimizes the need for personal interaction and provides a hygienic touchless payment option, meaning more c-store chains are likely to follow suit as the pandemic continues. 

We’ll be there for you (at your home)
As mentioned above, the convenience vertical’s central value proposition of easy, quick shopping with generally higher price points has lost some of its luster in the new normal. In response, c-store retailers are expanding their on-demand delivery and pickup services.

Since April, 7-Eleven has introduced same-day delivery at select stores with partners including Instacart, Postmates, DoorDash, and Google, as well as
regional providers Favor in Texas and Vroom Delivery in Hawaii. In July, the convenience giant started offering customers the option to order and pay ahead of time via its proprietary 7NOW delivery app.

At the beginning of September, Casey’s General Stores rolled out curbside pickup at all stores. The trend is promising enough that DoorDash is now operating its own online convenience channel called “DashMart,” stocked for local delivery with items from more than 2,500 participating convenience stores across more than 1,100 cities nationwide.

Get into the mix
Since the arrival of the COVID-19 pandemic, consumers have increasingly turned to e-commerce sites and large discount chains to fulfill their shopping needs. These retailers offer a much broader and deeper assortment than any convenience operator can realistically match. 

In response, convenience retailers are stepping up efforts to provide customers with a highly targeted product mix. Casey’s, Kum & Go, and Yesway are all attempting to better align product discovery with customer demand by utilizing the RangeMe platform. The solution enables convenience chains to increase direct access to suppliers and products to more precisely tailor their product mix and create localized assortments.

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