Convenience retailers are increasingly challenging the notion that customers should only visit their stores to fuel up and grab snacks, especially in light of the rise of car-sharing and hyper-efficient cars. Some, like Kum & Go, are adding features like growler stations. Others are investing in services to drive customers into the store, like USPS goposts, which have been popping up in numerous convenience store locations. These innovations are no longer just nice to have. They are becoming necessities for profitable brick-and-mortar retailing.
Some convenience stores are also emulating restaurants to draw traffic, adding outdoor seating areas, free Wi-Fi, or drive-thru windows. For example, Duchess designed a prototype store concept with a greater focus on foodservice, including made-to-order menu offerings, an in-store dining area, and touch screen ordering options. Similar to kiosk ordering, some convenience retailers are also adding at-the-pump food order screens.
Taking on these types of capital-intensive projects presents both great opportunity and great risk for executives. If managed correctly, they can drive significant profit growth. However, some of these programs may not pay off. With each new initiative comes questions regarding their implications. For example, which categories should retailers downsize to create space for self-service lockers? Will introducing a made-to-order foodservice concept drive enough incremental transactions and add-on purchases to cover the associated costs? And which locations will respond best to at-the-pump ordering screens?
The best way to answer these questions is to first pilot each concept in a subset of representative locations, then closely monitor their performance. This approach allows convenience retailers to ascertain whether the initiative warrants further investment, based on incremental traffic and sales. Overall, there are three key questions executives must answer before making decisions on broader rollout.