Keeping up with the changing perceptions and needs of today’s consumers is a sprint. Do your customers want to discover hand-crafted kombucha and organic quinoa bowls in your stores, or would most be pleased that their favorite soft drinks and six packs of beer are always in stock?

The answer, of course, depends on the specific consumer—a rushed parent might need to top off her gas tank and grab a gallon of milk for dinner, while a single millennial may be looking for a private-label juice and an e-cigarette. Yet they both demand a quick and easy shopping trip.

To help convenience retailers better understand and satisfy current and potential customers, the NACS/Coca-Cola Retailing Research Council (CCRRC) partnered with the Hartman Group on the study “Embracing Modern Convenience: Responding to Shopper Needs.” Published in December 2018, the report examines changing consumer perceptions, need states (how a consumer feels before beginning a shopping trip) and requirements of c-store shoppers in order to explore what short-term and longer-term approaches convenience retailers can adopt to remain relevant in an increasingly competitive environment.

The three-phase study was conducted March to September 2018 and included examining relevant Hartman and NACS data; c-store audits in Dallas, Texas, and Orlando, Florida; interviews with key industry stakeholders; and virtual ethnographic consumer interviews, consumer shop-along interviews in Dallas and Des Moines, Iowa; and a quantitative online survey of 2,279 U.S. adults ages 18 to 72 years, weighted to U.S. census key demographic measures and including consumers with different c-store usage levels.

We had to change our strategy from being a more traditional convenience store to become a food destination selling convenience products.

Laurie Demeritt, CEO of the Hartman Group, previewed some of the findings at the 2019 NACS State of the Industry Summit (SOI) in April in Chicago. “Consumer needs are changing and changing at a more rapid pace than they have in the past, and that’s caused a lot of consternation in the retail landscape,” she told Summit goers. “There’s a lot of retail blurring going on,” but “that retail blurring is actually a real positive” because “it’s opening up the consumer to new ways to think about your channel.”

Today, “There’s a lot of freedom for you to develop new products and services to speak to consumers in new ways to get out of that paradigm that maybe they had you in five or 10 years ago,” Demeritt said.

The NACS/CCRRC study outlines various opportunities “so that you can pick and choose the right pathway for you,” she said. The report includes a retailer self-assessment—Readiness for Modern Convenience checklist—to help store operators determine where they are in the process of moving their business toward this new paradigm and where to strategize next. Also included are real-world examples of ways c-stores are innovating to meet consumers’ needs.

The good news is that “convenience is not going away,” Demeritt said, but is changing. This idea of modern convenience, she said, “takes all of the traditional notions of convenience, then layers on top of them the more emotive or experiential ideas of convenience as consumers describe it today.”

Demographic Shifts

Broad demographic and cultural trends are shifting the way that consumers eat and shop for food and other daily necessities. The last U.S. census showed that households are changing, with a marked rise in single-person households. The U.S. is also seeing households with fewer or no kids and an increase in the number of households with two parents who work outside the home.

“They have unique needs,” Demeritt said. “They are the perfect sort of customers that convenience stores should be going after.”

Urban areas and suburbs are growing, and technology is influencing how consumers approach shopping and eating—think mobile orders and food-delivery services. Meanwhile, the middle-income bracket is shrinking, giving rise to shoppers on the high-end and lower-end of the retail landscape. The so-called value shopper and premium or natural shopper are both showing growth.

Consumers now spend more hours outside the home and are more likely to eat alone, to add multiple eating occasions into their day—such as morning snacks—and to seek food and beverages beyond the grocery store. “Fifty percent of all eating occasions include the desire to save time and energy in preparing or cooking food, making convenience the No. 1 driver across occasions,” Demeritt said.

There’s a lot of freedom for you to speak to consumers in new ways to get out of that paradigm that maybe they had you in five or 10 years ago.

Changing Habits

Trips to multiple retailers—which the report terms cross-shopping—are the norm. Forty-five percent of shoppers visited two or more retailers per grocery shopping trip, the study found, and they are frequenting an average of 4.4 channels per month for food and beverages. “Most consumers aren’t shopping one-stop shopping,” Demeritt said. “They go to a bunch of stores. There’s not a single store that stands out in their minds as their primary store—that’s an opportunity.”

Although women continue to be the primary shoppers in a household, the authors observed more shared shopping, with 45% of primary shoppers now male. Immediacy also is on the rise as consumers in continuous shopping mode shift from plan-ahead meals to quick ones. The report found that 73% of consumers surveyed choose their food within an hour of eating, and 51% of dinner choices are made within an hour of eating.

Consumers said they want quick, easy and accessible options, both in food choices and in store locations. Speed of getting in and out of the store and easy parking—both of which c-stores offer—are important to them.

“It’s a quick grab and go to get a wide variety of things,” 24-year-old shopper Brianna told researchers. “In the grocery store, it takes 30 minutes to hunt [everything] down in all the aisles, but in a c-store, it’s a quick loop.”

When consumers step into a convenience store they want to fill an immediate physical or emotional need, grab a beverage, a snack or a ready-to-eat meal—traditional convenience decision factors. Among the traditional convenience channels, which include c-stores, quick-serve restaurants (QSR) and cafés, c-stores have a strong hold on consumers looking to quench their thirst or get a small treat, while QSRs and cafés predominate when it comes to more substantial food offerings and indulgence. At the same time, consumers seek healthy, high-quality and personalized food options offered in an engaging store that makes shopping memorable—the very definition of modern convenience.

C-store Shoppers to Watch

The report profiles three types of c-store shoppers to watch: loyalists, millennials and busy parents.

Seventy percent of loyalists surveyed have a primary c-store, compared with 60% of millennials and busy parents. Interestingly, loyalists signaled the strongest need for delight (33% versus 29% for millennials and 28% for busy parents). They want unique flavors and chances to discover new foods and beverages. Loyalists are more likely to buy a cold or hot beverage and multiple items, both for themselves and for others with them, than the other groups. They also are more likely to buy extra items for later (57% versus 49% among the other groups). In the study, the loyalist group was more likely to cite going inside the c-store than just buying fuel as the motivation for their trips (62% of loyalists versus 50% of all other groups). The ambiance and cleanliness of the c-store, friendliness of staff and item selection are all important loyalty drivers.

Meanwhile, millennials and busy parents are emerging as new focus areas because their modern convenience needs are compelling them to seek retail solutions that other channels aren’t providing.

Road Map for Growth

Convenience stores can respond to the needs of future consumers along a continuum of change—but the evaluation should be gradual to keep pace with the consumer. The report drills down into each of the four areas below.

The first is Maintain: Retain traditional relevance, including speed and ease, location, accessibility and familiarity. Continue to fill immediate consumption needs in food, beverages and the age-restricted categories of tobacco and alcohol, plus fuel and automotive needs, which remain a primary driver to the channel. Continue to focus on safety in and around the store, clean bathrooms and overall store appeal.

On a consumer shop-along in Dallas, observers noted one RaceTrac’s front-of-store positioning of the roller station, with a fresh, clean and appetizing display featuring tamales, a regional favorite. The takeaway: “Placing desirable products close to the front of the store can prompt additional purchases. However, products must have quality cues of freshness, variety and cleanliness in order to spark inspiration,” the report notes.

The next bucket is Improve: Deepen satisfaction. Upgrade basic store features and offerings to create more enjoyable experiences and focus on humanizing your service. “Whenever a shopper is walking into your store they are going to see another human. The fact that you can walk in and see another person and get a smile is so important,” Demeritt said.

Placing desirable products close to the front of the store can prompt additional purchases.

Provide a fresh assortment of healthier foods and perishable items. Eighty-one percent of consumers surveyed said a balance of fresh food and traditional foods at c-stores is appealing, and 74% indicated they would likely take advantage of the offerings.

Consider offering premium indulgence items—for example, self-serve ice cream dispensing with a toppings bar. Try sourcing products locally, and experiment with things like private-label juices and beer. Mendez Fuel, a Miami c-store with four store/fuel locations and a fifth stand-alone juice bar/c-store, has reimagined the c-store with its premium indulgence beverages, the report notes. Local craft beer on tap, freshly made smoothies, cold-pressed juices and full-feature delis are among the draws at the c-store.

The third bucket is to Exceed: Strengthen competitiveness. “The idea of buying for later is especially important for millennials and parents. It’s another way to get them into your store,” Demeritt said. Since a significant portion of c-store traffic occurs during the morning daypart, retailers should prompt shoppers to plan and purchase their afternoon snacks during their morning visit, for example.

Also consider ready-to-eat meals, customizable experiences via self- and full-serve options and digital in-store engagement.

Denver-based Choice Market, for example, is a food-centric c-store targeted to millennials, who are willing to pay a premium for fresh produce, prepared foods and quality premade options. The store offers catering services, online ordering and meal kits.

Partnering with a popular and reliable food truck operator or outside foodservice operator is another way to venture into the fresh and ready-to-eat meal space, the CCRRC report notes. Texaco Food Mart in Bellevue, Washington, partners with O’Bop Korean Barbeque, which operates out of dedicated kitchen space inside the store and advertises its offerings via a life-size, eye-catching food-truck decal on the building.

The final bucket is Expand: Create new relevance. Digital services, such as app-based coupons, pre-ordering and third-party delivery systems, can create additional touchpoints to build greater engagement and loyalty by further demonstrating that c-stores understand both traditional and modern convenience needs of their customers, the authors recommend. Three-quarters of millennials surveyed said they would use digital preordering if provided by a c-store.

Reimagine c-stores as unique spaces for a wider range of functional and social purposes. Provide a welcoming environment for customers to linger or meet up with others, with comfortable, well-placed, WiFi-connected seating. In-store entertainment creates new reasons to stop in. Provide accessibility to public transit users and relevance for ride-sharing drivers and riders, too. In the CCRRC survey, 72% of parents said they would use a seating area if available at a c-store.

“Consumers are looking for more emotional experiences,” Demeritt said. “And they’re open to give you more leeway.”