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Challenges Facing Convenience Stores

Pre- to Post-Pandemic Factors Will Continue to Challenge C-Stores

candy isle in a convenience store
C

-Stores sales activity appears to be ever increasing and will continue to see a boom.   C-Stores have traditionally been synonymous with a place where you could fill your tank, but that’s an old notion.  From household supplies to frozen food to freshly cooked food on the spot, modern C-Stores offer an abundance of products.  

That being said, there are significant challenges facing C-Stores.  For example, it’s tough to gauge ever evolving consumer demands.  This can exacerbate problems such as inventory mismanagement, distribution problems, etc.  The pandemic added its own dimension – with its own set of peculiar problems.

“One of the biggest C-Store challenges has been the use of digital spaces to place orders.  Previously, C-Stores that preferred the offline mode of selling were more than happy continuing that way.  Now, disruptive digital technologies have changed the C-Store space, and only those who rode the storm, weathered the storm!”

In this article, we’ll discuss the various C-Store challenges currently in play and what can be done to tackle them.

What Were the Pre-Pandemic C-Store Challenges?

What Were the Pre-Pandemic C-Store Challenges?

Managing a C-Store is no easy task.  Managing this operation can be quite daunting, from inventory management to estimations of consumer demand in near real-time.  These organizations cater to different types of clients daily and, coupled with distribution problems for C-Stores, a number of ‘pain points’ evolved.  Some of these problems include:

  • Inventory mismanagement:  More often than not, when you walk into a store and can’t find the one thing you came for, you’re going to leave as a dissatisfied customer.  Unless they understand the supply and demand equation for their products, they will accumulate dissatisfied customers.
  • Issues with planning:  Planning is a crucial part of maintaining a C-Store, and most of them order their inventory 2-3 weeks in advance.  This means that they understand their distributors and their cycle times and coordinated them within specified replenishment periods.
  • Optimization of the supply chain:  This is a critical challenge for C-Stores.  Having the inventory scheduled, delivered, and stocked is cost and effort intensive.  

Of course, they also have to deal with both expected and unexpected problems.  Natural calamities, untoward incidents like burglaries, political issues, and questionable practices by employees and supply chain managers, etc.

Major Issues Facing C-Stores During the Pandemic

The pandemic brought in a whole new set of issues for small business owners, and C-Stores were hit hard.  One of the biggest C-Store challenges has been the use of digital capabilities to place orders.  Previously, C-Stores that preferred the offline mode of selling were more than happy continuing that way.  Now, disruptive digital technologies have totally changed the C-Store retail space, and those who rode the storm, weathered the storm.

Another critical issue that has come to light recently is that US subsidies and severance packages have made unemployed individuals comfortable with unemployment exceeding the normal rates, last year.  Agitating the employment situation C-Stores are suffering from.

Tax and regulatory laws will impact C-Stores in the coming year – and not in positive ways.  This is also one of the reasons why the adoption of digital technologies could actually be a boon.  Optimizing workflow, improving tracking information, automating procedures and providing added services and benefits to customers could be decisive factors in a C-Stores ability to thrive and survive.  

Order delivery, curbside pickups

An important example of changing consumer needs would be the increasing demand for healthier food options at C-Stores – starting prior to the pandemic but increasing significantly during it.  At the time, there was no vaccine or potential treatments available, which adding to existing consumer desires to look for food products that might ‘boost’ their immunity, so to say.  

Healthy food options in C-Stores were an up-and-coming issue prior to the pandemic.  Its importance grew immensely during the pandemic.  While C-Stores do offer healthy options such as salads and wraps, and stocked items like yoghurt, granola bars etc. they don’t always have the best reputation for provisioning healthy food items.  

With heightened customer awareness of health needs, C-Stores are focusing on offering more fresh produce, less processed food, cleaner snacks and even healthy beverages such as Kombucha or Kefir.  The pandemic seems to have accelerated this healthy change.  

How can we rectify C-Store challenges?

Many of the issues facing C-Stores can be successfully engaged but the effort will require adoption of new thinking.  While so called “digital disruption” is a game-changer in the C-Store industry, it will nonetheless lead to progress.  

The first thing that will need to happen is a holistic assessment of operations and the issues at hand.  Which aspect of the business needs improvement?  What products and services need introduced or expanded?  Then the proper mix of digital systems need to be selected.  Are delivery systems in place or planned?  Does an automated inventory system exist?  Many platforms exist for specific purposes, implementation must be selective.  For instance, you might want to automate your inventory management, but outsource delivery to specific service providers.  

Most owners realized that distribution problems in C-Stores were a challenge.  Due to lockdown measures being imposed everywhere, communication with supply chain managers became difficult.  But sending out automated requests to suppliers through a digital platform offer an opportunity to save time and money.  Another example of business improvement would be to  expand their delivery areas beyond their usual service area to harder-to-reach areas and even include curbside pickups for to ensure ease of access to a wider range of consumers.  

In the case of inventory automation, Enterprise Resource Planning (ERP) systems could be used to improve the overall planning and management process in multiple disciplines.  They can get real-time data about inventory, deliveries, sales, consumer behavior, and this information into related modules like accounting.  

This information could help them further their efforts in the marketing space where they could take their business online and use marketing systems to advertising and increase their sales over time.  

What Challenges Does the Future Hold?

While we have identified potential solutions to the significant issues facing C-Stores, the process will be difficult. Change always presents its own set of problems.  For example, implementing digital systems will be expensive and time-consuming. Existing employees and management need to adapt and receive the proper training.  

With customers heading back to stores in person, digital technologies offer promising possibilities as a safety measure.  Implementing cashless transactions, delivery, and pickup of products through pre-ordering minimizes the amount of time customers spend in the store, thereby decreasing the risk of infection to themselves and others.

Another aspect that requires examination is not limiting themselves to one channel of marketing.  In this day and age, it’s essential to understand that constantly pestering potential and existing customers with messages doesn’t work.  Instead, C-Stores need to focus on their target audience using comprehensive digital marketing strategies.  

A substantive C-Store challenge in 2021 is the maintenance of brand loyalty.  Previously, it was not so difficult to get loyal customers who visited and shopped from a given store because it was locally convenient.   This old order is now in a state of change.  Due to the advent and deployment of technologies such as digital ordering systems, consumers have access to a broader base of C-Stores.  As such, C-Stores need to identify and explore brand loyalty options – from the use of persuasive marketing or discount strategies, to providing in-demand products and services.

Conclusion

C-Stores will continue to face significant issues.  The key to continued success is to adapt and implement.  Early adoption of technologies has always been an issue because C-Stores did not necessarily see the need for them.  A certain reactive disposition existed.  C-Store owners and employees need to understand that simplifying processes, improving tracking abilities, streamlining operations and expanding service capabilities will be critical factors in C-Store success.

September 5, 2021

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