Category Blurring Is Great News for C-stores | ConvenienceStoreNews
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    Category Blurring Is Great News for C-stores

    By Andrew Swedenborg, King Retail Solutions

    Without a doubt, convenience store retailers should be looking to the future with open-mindedness and optimism. The retail landscape is evolving and traditional retail categories -- e.g., grocery store, quick-service restaurant, pharmacy, big-box, convenience store, etc. -- are blurring. Once viewed within a narrow "snacks, gas, cigarettes and beer" frame by many, the nature of the convenience retailer is now expanding along with consumers’ attitudes about just what types of merchandise they will purchase from a c-store.

    Fifty-seven percent of Millennial shoppers purchase some of their groceries at a convenience store. 7-Eleven, Kwik Trip, Wawa and Circle K stores are among the top 20 places consumers look to buy groceries when they aren’t going to a traditional grocery store. Twenty-eight percent of people will pick up a fresh meal at a c-store, but women are less likely than men to do so. These statistics are loaded with possibility.

    Last year, King Retail Solutions (KRS) commissioned a consumer research study to better understand shoppers’ habits and attitudes when it comes to retail category blurring. We did this research because in store planning and interior designing for our retail clients (c-stores among them), we noticed a trend -- in short, category blurring across the board.

    Knowing there is a trend and understanding why there is a trend and exactly how that trend applies to your business are two different things. So, KRS set out to understand not only how consumers were shopping across categories, but also how they felt about those purchases. Shoppers reported on their purchasing behavior for the preceding 12 months, as well as their shopping attitudes for the coming year.

    What new opportunities are there to be tapped into?

    With 74 percent of shoppers willing to purchase a service from a non-service provider (think getting a haircut at a RaceTrac store); 88 percent of shoppers willing to purchase a fresh meal from a non-restaurant (a salmon spring roll from Kum & Go); 92 percent of shoppers willing to purchase clothing from a non-clothing store (a T-shirt from Circle K); and 96 percent of shoppers willing to purchase groceries from a non-grocery store (milk and eggs from 7-Eleven), shoppers appear open-minded to expanding their horizons.

    Does this mean all convenience stores should expand to offer manicures, salad bars and pajamas? Of course not. But it does mean that tapping into new goods and services, offerings that shoppers may be more than willing to purchase from your store and would appreciate your store for carrying, could be a very wise evolution of your business, or at least an evolution worth looking at more closely.

    Per the study, when it comes to buying groceries, convenience ranks (for the most part) second only to cost in a shopper’s decision-making factors as far as where to make their purchase. For fresh prepared meals and for services, convenience comes just after quality and cost. For clothing, convenience follows on the heels of cost, quality and selection.

    If one were to look at these results and venture a guess as to what new opportunities convenience stores could be looking at in expanding their goods and services, grocery stands out.

    This isn’t surprising. We’ve worked with clients both on the grocery side, looking to create c-store sized markets, and on the convenience side, looking to provide a fuller grocery offering. The results of these projects have thus far proven incredibly successful for the retailers and their shoppers.

    A standout example of this is Green Zebra Grocery in Portland, which goes beyond groceries to focus almost exclusively on fresh, local and even organic fare in a c-store-sized space. Green Zebra is maybe an extreme example on the grocery side, but it illustrates the point nicely, which is that modern consumers are open to any type of retailer that’s going to deliver a shopping experience of value to them.

    The lines between categories, in shoppers’ minds, are blurring and the opportunity to step in and redefine what your convenience store means to them is ripe.

    What are the risks of added competition?

    Taco Bell wasn’t your competitor yesterday, but today you’re considering selling both the ingredients for tacos in your grocery section and potentially even fresh-made burritos in your fresh-food case. You’ve opened up the door to a lot more competition.

    You could avoid this risk completely by sticking with what you’ve always done, but there’s an implied risk there as well -- the risk of getting left in the dust of your current competition that may be taking leaps in new directions.

    What new competition are you willing and best-suited to handle? What’s your game plan? How can you differentiate yourself from both Taco Bell and the grocery store down the street? The answers to these questions are going to vary based on your brand values, your scalability and your goals.

    But they are important questions to be asking before you open that burrito bar or invest in inventory, remodeling and the training required to incorporate a full-service nail salon (a random example) into your already small space. You may be (and probably are) better suited to compete with a Taco Bell than a day spa, or with a grocery store than with a T-shirt shop.

    How do I evolve my positioning?

    Urban, male Millennials (young city guys) are the demographic most likely to purchase some groceries at a convenience store (72 percent already do it). By contrast, only 37 percent of the women surveyed had purchased any groceries from a c-store in the preceding 12 months.

    Expanding what you sell obviously isn’t enough; the expansion needs to encompass your target consumer so you get their attention, keep their attention and provide enough value that you earn their return business. Convenience stores, it seems, have done a decent job of convincing young, city-dwelling men that a c-store is an OK place to purchase groceries, for example. Now, how to expand on that to other demographics?

    Only you know the exact target demographics you’re seeking to reach. I’ll go out on a limb here, though, and say that “women” is likely one of the customer demographics you’re looking to grow.

    Study after study has shown that women make the majority of these types of purchases for their home and yet, they were the demographic least likely to buy these things at a convenience store. Clearly, there is work to be done on the part of convenience stores in broadening their appeal to female shoppers and probably several other key demographics -- Millennials, Baby Boomers, single individuals, people with kids, single working women with kids, the list could go on and on.

    Evolving brand position means taking into consideration your target customer’s habits, values and attitudes and then gearing your business to appeal to those habits, values and attitudes. Not just in what you sell, but how you sell it, how your business comes across and how it feels to shop your store.

    Our survey certainly put some interesting numbers to shoppers’ habits when it comes to purchasing goods from non-traditional retailers. I will say that we predict some retailers are going to expand really smartly, evolve and flourish. Others may attempt to expand in ways that don’t make sense or bury their heads in the sand and hope this category blurring thing passes by. It won’t. And as the smart retailers will harness change and shape the future retail landscape, others inevitably will get left in the dust.  

    The numbers and statistics tell a portion of the overall story and it will be up to retailers themselves to determine how this story pans out (as retail continues to expand and evolve until the end of time).

    Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.

    By Andrew Swedenborg, King Retail Solutions
    • About Andrew Swedenborg Andrew Swedenborg is executive vice president of King Retail Solutions (KRS), a retail store design firm.
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