One-third of convenience stores want to upgrade customer loyalty tech

Dive Brief:

A new Zynstra report, which focused on convenience stores that had an average revenue between $10 million to more than $999 million, found that 44% of convenience store shoppers said they would be interested in technologies that let them pay instantly and bypass checkout lines, but only 45% of shoppers said they entered a convenience store and left with their purchases in under three minutes.
According to the survey, 96% of convenience store directors and IT managers said that they would implement new applications and services more often if it were easier to do so. Among the top IT challenges that convenience stores face, 47% of respondents cited the high cost of regulatory compliance and security protocols as their top challenge, followed by 35% who cited the inability to handle lines during peak trading hours in high season and 35% who cited the inability to push promotions across various touchpoints in-store and at the pump.
However, upselling customers remains a high priority for convenience store retailers. Per the report, 39% of convenience stores said that upgrading customer loyalty programs was a key IT priority, along with improving staff productivity through technology, followed by 38% who said reducing costs and improving operational efficiencies was a key priority.

Dive Insight:

The convenience store sector has set its sights on faster service for some time now, and consumers have an interest in technologies that will speed up their checkout time. A 2018 report released by the National Association of Convenience Stores found that 45% of shoppers leave the store with their purchase in three minutes and 65% of shoppers who frequently go to convenience stores indicated that they would be interested in technologies that would let them pay for purchases instantly or skip checkout lines.

The report gives some insight into why convenience stores have a hard time adapting new technologies that streamline the customer experience. Overall, though, only one-third of shoppers are using new retail technologies, an A.T. Kearney report found.

Among the technologies that convenience stores want to introduce to compete with Amazon, 43% want to roll out scan-and-go technology and mobile app payments, and 42% want to implement buy online, pick up in-store capabilities, according to the Zynstra report.

Convenience chain 7-Eleven appears to be at the forefront of this change. The convenience store chain rolled out mobile checkout at its New York City locations in late August, a move which followed the retailer's introduction of Apple Pay and Google pay to its U.S. stores.

Given that shoppers are spending less at Amazon Go stores than competitors like Walgreens, CVS and Rite Aid, Amazon Go stores don't have the same stronghold of existing convenience retailers yet. However, as Amazon Go, Zippin, Grabango and others enter the market, established chains must keep their technology up to par.