Ready to swap out that gas station hotdog order for a sustainably sourced organic apple from a farm near you? Just make sure to save some time by using a self-checkout with a crypto, hands-free payment on your smartphone or watch.
All jokes aside, the C-store landscape is quickly changing, and while it’s still about convenience at its core, convenience is a bare minimum expectation. To remain competitive your C-store must do more, and adapt to the times by providing the value that customers demand, while overcoming obstacles the industry presents.
Let's delve into the key trends shaping the C-store sector in 2024 and the challenges it faces.
Embracing Trends for Competitiveness
Using AI to Analyze Data and Streamline Operations:
A study by IBM shows that the number of companies that use AI in the retail and consumer products industries is expected to jump from 40% to 80% in the next three years.
Utilizing artificial intelligence to predict suppliers’ needs based on past transactions helps refine inventory management, reducing the cost of goods sold and optimizing storage expenses. When you only keep necessary stock, you profit more by limiting the cost of storage space and holding expenses, which can be huge for C-stores with minimal storage space.
If you haven’t, now is the time to implement AI inventory tracking and analysis to your store, preferably in cohesion with your POS system.
Increasing Cybersecurity Measures:
With an increase in digital payments, C-store retailers are strengthening their cybersecurity measures to keep both theirs and their customers data safe. Robust cybersecurity measures, like SD-WAN technology for data encryption and managed detection and response services, are crucial for safeguarding against data breaches.
Without these you risk losing money and reputation with customers in case of a data breach.
Mobile Payment Acceptance:
According to IBIS World, the shift to digital payments is accelerating, with projections indicating a $37.7 billion valuation in 2023. According to Visa, 41% of consumers intend to shift exclusively to digital payments within the next two years.
With this knowledge, it’s safe to say that cash is quickly being replaced in favor of digital payments for convenience, traceability, and safety. The best way to adapt to this is to offer mobile payment options at both the counter and the pumps.
Omnichannel Experience:
Modern shoppers have grown to expect seamless omnichannel experiences. With all the massive brands that are recognizable no matter where in the world they are, you must compete to do the same. Consistency across all channels has been the status quo for the heavy hitters in the C-Store industry, and it’s important to utilize for smaller chains as well.
To put this into practice, make sure that all your brandings visual elements and messaging remain consistent across all channels, such as in store, print and digital advertising, apps, and social media.
Online Ordering and Delivery Services:
According to a study by Hathaway, 49% of U.S. consumers have ordered from C-stores in the past year, which is an increase of 6% since the same survey was conducted three months prior, showing rapid adoption. To take advantage of this trend, make sure your C-store is available on delivery services like Grubhub, Uber Eats, and Instacart.
Focus on Organic and Fresh Foods:
It’s expected that the global organic food and beverage sector will hit a growth trajectory with a valuation of 361.9 billion USD by 2027, according to Bonafide Research and Marketing. This shows consumers' health-consciousness driving a global push towards organic foods.
C-stores are diversifying their product lines to include fresh, nutritionally balanced items to meet varied dietary preferences. To meet this need it’s advised to have strategically placed produce sections to catch customers’ eyes as soon as they enter your store, and to stay stocked on fresh organic produce in demand in your area.
Sustainability:
C-stores are engaging in sustainability through their design and practices, as well as through the products they sell. Energy efficient stores that utilize reusable bags and containers, while also selling eco friendly products in sustainable packaging are satisfying the desires of the growing environmentally conscious consumer demographic.
Promoting sustainability through energy-efficient designs, biodegradable packaging, and local sourcing satisfies eco-conscious consumers.
Challenges Faced by C-Stores
Increased Competition:
In 2023 there were convenience stores around every corner, and more continue to pop up. To make sure you maintain a competitive advantage over these other stores, you must build customer loyalty, so they pick yours over other stores, no matter where they are.
To overcome this increasing competition, make your stores setup, visuals, and messaging consistent across all stores so your customers know they’ll get the same experience across all your stores to keep them coming back.
Impact of E-commerce Giants:
Traditional brick-and-mortar stores face stiff competition from e-commerce platforms due to wider product ranges, doorstep delivery, and competitive pricing.
To overcome this, have your store available through delivery services to breakthrough to next level convenience, and differentiate the instore experience by having faster and convenient product finding and purchasing through signs visible from the entrance, and self-checkout to get customers in and out as fast as possible.
Influx of Younger Demographics:
According to a report by Alchemmy, 67% of the general population make purchases based on values more so than pricing, but 75% of Gen Z consumers make these purchases based on values.
As time goes by, Gen Z will make up more of the market, meaning your C-store must adapt to this growing demographics demands. While competitive pricing is still important, aim to cater to this growing demographic through sustainably sourced products, and plant based, organic offerings.
Greater Security Threats:
With the rapid growth of digital payment at the counter and the pumps, threats to your customers data have never been greater. Cyber criminals are more common than they’ve ever been, so it’s up to you to protect the data you’ve been trusted with.
Protect this data through secure and reliable POS systems, SD-WAN technology for data encryption, and managed detection and response services to make sure customers data is safe at your C-store.
Supply Chain Disruptions and Geopolitical Tensions:
It’s becoming harder to find reasonable prices on certain products due to supply chain disruptions caused by geopolitics and unrest around the world. Tensions with China and additions to the BRICS+ (Brazil, Russia, India, China, South Africa) Alliance mean that these countries have more options outside of the U.S. for trade, therefore causing the U.S. to get less favorable prices on products sourced from these locations.
This election year could also pose a threat to relations at the southern border with Mexico, who we are increasingly reliant on because of losing viable options in the east due to BRICS+ and China tensions.
Most products will still be attainable, but they’ll cost more meaning lower profit margins, and having a harder time selling in store at higher prices, making some items not worth buying in the first place.
Then on top of all that, the U.S. is facing a labor shortage, which impacts product creation in the U.S., and more importantly the distribution infrastructure in the form of a lack of haulers.
To address all these issues, it would be a good idea to diversify the source of your products by getting them from multiple sources so when one gets more expensive, you have other options.
Adapt to Stay Ahead:
It’s safe to say that there are substantial changes coming to C-stores in 2024. If you’re aware of these changes in the industry, and you plan accordingly, you can come out ahead and have a very successful year. Despite all these trends and challenges, some things will never change. So, stay true to your brands offering of convenience, and remember that many customers will still prefer that gas station hotdog over the organic apple.
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