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05/26/2021

Why Convenience Stores (Even the Big Chains) Should Lean into Local

Foxtrot Market combines an upscale corner store and café, and offers delivery in under an hour.

Convenience stores, corner stores, bodegas, mini-marts, whatever you call them in your area, they were a lifeline to many during the COVID-19 pandemic.  

In the early days, when people were avoiding crowds, long lines at supermarkets, and empty shelves at big box stores, convenience stores offered day-to-day essentials and opportunities for brief human interaction. In some cases, corner stores evolved into community hubs or third places, a reinforcing connection with the local neighborhood.

As we began to realize the toll the pandemic was taking on our small businesses, community members rallied around local establishments. In 2020, nearly 70% of consumers in both Canada and the United States primarily shopped locally in order to strengthen the local economy. In the Jackman Human Insights Study, our ongoing proprietary consumer research, we found that 37% of consumers felt a sense of responsibility to those around them and that local sources have become the most trusted to keep consumers safe.

Convenience stores have traditionally been about convenience, rather than selection or value. Consumers know what to expect when they walk in — the products and even the store layouts are predictable. But this is beginning to change and even some of the bigger players are starting to transform.

Here we look at some ways in which the landscape of convenience stores is changing and share our advice on what the big chains can learn from smaller stores.

• Small Stores Think Big
New, trendy corner stores are emerging, their shelves stocked with healthier on-the-go options and goods from small, local businesses.

Some have evolved their traditional store formats, adding cafes and patios where their neighbors can enjoy a coffee or a quick bite. These include: 

POPBOX Mrkt. in Toronto is turning the convenience store model on its head by skipping the junk food in favor of grass fed dairy, gourmet chocolates, healthy juices, and fresh salads. It carries mostly local brands and also offers a full cafe. 

The Lucky Penny Corner Store and Cafe, also in Toronto, carries a careful selection of locally sourced foods. It offers fresh homemade sandwiches, breads and pastries from local bakeries, local cold-pressed juices, farm fresh eggs, locally grown fruits and veggies, and house-made dips and sauces.

Foxtrot Market, a smaller chain in the U.S. which recently raised $42 million in funding, is also an example of the redefined convenience store. It offers typical corner store food like chips and ice cream, combined with groceries, pantry items, and beer and wine.

The large, bright stores have places for customers to sit and enjoy coffee or company but for those who don't want to come in, Foxtrot promises delivery in under an hour. 

• Big Players Make Changes (But They're Still Missing an Opportunity)
To their credit, the big players in the convenience store space are also evolving.  7-Eleven, the biggest convenience store chain in the world, launched its first “evolution store” concept in 2019. The format is designed as a testing ground where the chain can test new concepts, products and services tailored to the individual market, along with tech elements such as "scan & pay." 

There are now eight evolution stores across the U.S., each of which include a restaurant concept. (The chain’s latest evolution store, in Manassas, Virginia, actually includes two restaurant options).

Similarly, Alimentation Couche-Tard Inc., the parent company of Circle K, rolled out its Fresh Food Fast initiative in 2020, expanding its food offering within its convenience stores. In January 2021, the company partnered with McGill University to launch a retail innovation laboratory store. 

While these initiatives seem to be focusing on implementing new technologies and fresh food offerings, the big players are still missing out on an opportunity to connect with local communities. Most locations remain cookie-cutter, with the same products and store layouts. There is still nothing local or memorable about these shopping experiences. 

We've seen big brands in other industries successfully lean into local and customize locations to reflect the community they are in. Nike Unite stores are designed as community centerpieces to help locals connect with sports, the brand, and each other. Displays feature local landmarks, stores carry a curated selection of local specialties, and the dressing rooms are hung with maps of local areas that shoppers might want to explore.

Lululemon brings its community-based retail model to life in each of its stores, particularly its experiential stores. The store in Chicago's Lincoln Park includes an area devoted to local businesses and features pictures of local brand ambassadors on the wall of the restaurant. 

Many other brands from Anthropologie to Warby Parker are making efforts to design spaces that feature local artists and fit in with the nearby architecture rather than just mimic their other locations. 

• Big Convenience Stores Can Continue to Evolve
Here’s what big convenience stores should be learning from the small players:

1. Think Local. As more people continue to work remotely and consumers’ lives shift closer to home post-pandemic, there will be a continued desire to be able to get what you need in your neighborhood.   

Lean into the local communities, curate products, store design, and footprint to the local market and reach consumers where they are. Stock shelves with local products, if possible. 

2. Strive to be a Community Destination. The pandemic reset our priorities, leading many to place increased value on community connections. Rather than just being a quick and easy place to pick up snacks, transform to become a destination integral to the local community and a place for these human connections to happen.

Add features that will bring people in and encourage them to stay. Adding a stylish seating area or an outdoor patio could help transform the space to a community meeting spot.

3. Keep Evolving. Today’s consumers expect convenience – it is no longer enough for that to be your only offering. Continue to find ways to engage and inspire your consumers, by evolving your product selection or service offering in response to their changing preferences and needs.

Convenience stores may still conjure images of giant sodas, weak coffee, and aisles of junk food, but that is changing. New stores are offering fresh food, fun gathering places, and a way to support local brands and businesses. Post-pandemic, the big players in the game should take their cue from new disruptors to keep up with today's consumers.

Stefan Read is senior VP engagement advisory, strategy practice lead at Jackman.

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