Technological change happens fast, and for convenience retailers, prioritizing which innovations to seize—and which to bypass—is yet another challenge in the race to stay ahead of the competition, especially as the pandemic forced quick shifts in operations and services to meet customer demands. What was important before the pandemic, for instance, implementing technology to support loyalty rewards programs, in many cases has been overtaken by newer customer-facing initiatives like omnichannel shopping and enabling contactless payments to speed in-person checkout.

NACS Research surveyed convenience retail technology leaders this past spring to gather feedback on these challenges and the current landscape of convenience retail technology. The results and recommendations are shared in a white paper, “Building Convenience Retail Success Through Technology,” available at www.convenience.org/research.

The findings help retailers set priorities for implementing specific technologies based on convenience retailer business impact ratings. Benchmarking helps identify whether your company is ahead or behind other retailers in adopting certain technologies, understanding what to consider before implementing a technology and initiating the request for proposals for new technology providers.

“Having a technology roadmap for the future is crucial in setting priorities and understanding what comes next to ensure that technology plays a pivotal role in the success of your business,” said Lori Stillman, NACS vice president of research. “Our survey found that retailers with a technology roadmap that plan at least three years ahead are more likely to allocate resources to customer-facing initiatives and less likely to require reactive pivots in the face of sudden business and economic environment shifts like COVID-19.”

Nearly one in five convenience retailers do not have a formalized technology roadmap, the NACS survey found. Forty-four percent of retailers surveyed indicate their technology roadmap extends two to three years. Not surprisingly, companies with established technology roadmaps “reaped the benefits of planning and evolved their roadmap for what comes next after the pandemic,” Stillman said. These companies were more likely to already have implemented remote work capabilities, contactless payment and mobile ordering at the pump and in-store and a disaster recovery plan. Having these key elements in place helped to limit business disruptions compared with retailers who needed to scramble to adjust to new operational demands.

NACS research examined the convenience retail technology landscape across six categories encompassing 41 distinct technologies to determine:

• Implementation stage (embedded, adopting or exploring)
• Level of difficulty in implementing
• Perceived level of impact on business
• Considerations for technology provider request for proposals (RFPs)

Sixty percent of convenience retailers surveyed believe they have the right technologies in place today to meet future business and market demands, and among these, implementing shopper-experience-related technologies rises to the top.

Just 25% of convenience retailers surveyed said they allocate the bulk of their tech spend to customer-facing projects. Many convenience retailers are underleveraged when it comes to customer-facing and payments technologies, which survey respondents considered the most difficult to implement. These include such technologies as automatic—and anonymous—age verification, just-walk-out technology and personalization. And in the payments space, cryptocurrencies and alternative fintech, such as Venmo and PayPal, have low adoption rates.

Still, retailers surveyed are rapidly adopting contactless payments and pay by mobile apps because they view them as having high potential business impact. These technologies can free up store staff to spend more time on customer-facing activities to enhance the in-store experience. At least 60% of tech spend should go to improving the shopper experience and building customer demand, the report recommends.

Back-office technologies, meanwhile, have captured more attention from retailers who regard them as having the biggest impact on operations. Amid ransomware attacks and other cybercrimes, retailers are prioritizing investments in cybersecurity technology. Although the technology is difficult to implement, retailers recognize its high business impact, the survey indicates. Among other findings, retailers said COVID-19 sped their adoption of last-mile fulfillment ordering, a technology they consider challenging to implement.

Facing a labor shortage, retailers consider technology to help train and onboard store team members as having high business impact and are currently in the “adopting” stage. Foodservice-related technologies also are in the adopting stage and rated by respondents as having a moderate business impact.

When it comes to technology RFPs, NACS researchers identified key areas for retailers to consider when evaluating technology providers:

• Secure internal buy-in first before scoping possible vendors
• Establish KPIs for technology implementation deployment success metrics
• Research potential providers and vet strategic, cultural and technology alignment
• Evaluate provider risk, certifications, security, data architecture and data ownership
• Determine provider fit to current and planned solutions

The analysis is based on a total of 104 responses from convenience retail technology leaders representing over 35,000 store locations globally who took part in the NACS Convenience Retail Technology Survey, conducted from April to June 2021. In the survey, 83% of responses were from the United States, and the remaining 17% were from Australia, Central America, Europe, South America, Southeast Asia and the Middle East.