Embracing the New Normal

Operational challenges and changing consumer behavior will drive convenience store retailers to switch things up in 2022

By Melissa Kress

AS THE CLOCK struck midnight on Jan. 1, 2022, it’s likely many people wished for a year when things return to normal — as in 2019 normal. However, as the global pandemic stretches into yet another year, it is becoming clear that the only normal headed our way may be a new normal.

Wanting to go back to normal and actually doing it are two different things. According to a recent survey by AlixPartners, there is rising optimism among U.S. consumers about returning to pre-pandemic habits once the smoke clears. Yet, large numbers of Americans plan to keep spending less or switch the products and brands they spend their money on — or do both, even after the pandemic ends.

The poll by the New York-based global consulting firm found that 73 percent of consumers in the United States are optimistic about vaccines and about the future — which is up from 67 percent in AlixPartners’ previous survey, which was fielded in the winter of 2020.

The most recent poll, released in November 2021, is the third wave of an ongoing, nine-country study of how the pandemic is changing priorities in sectors ranging from consumer products to retail to restaurants to travel and leisure.

The latest survey revealed that more than a third of U.S. consumers say their pandemic-hardened buying habits will go on even after the pandemic ends — and of that group, 36 percent say they plan to keep spending less than they did pre-pandemic, and 20 percent say that while they plan to spend the same amounts, they will switch the product categories and brands they purchase.

As if changing consumer behavior isn’t enough, the convenience channel also has operational challenges it is facing, including a labor shortage and supply chain disruptions.

C-store operators will need to make adjustments and embrace innovation to satisfy the changing demands of the business in 2022. Here are a few of the trends the channel can expect to see in the year ahead:

Trying Something New

Looking to win new customers in 2022? Give them something new to try. According to AlixPartners, 25 percent of U.S. consumers say they are interested in trying new food/grocery brands, and 37 percent are interested in trying new restaurant brands.

Micro-Fulfillment Will Play a Major Role

As consumers increasingly welcome same-day delivery and curbside pickup, retailers have homed in on improving their last-mile delivery capabilities. Having the right technology has been, and will continue to be, crucial to efficiently manage micro-fulfillment, according to David Wilkinson, president/general manager of NCR Retail. One key example is retailers looking for their own e-commerce fulfillment system that can seamlessly blend in-store and online experiences, as well as integrate with existing software, all while being consumer-friendly. Another technology transforming microfulfillment is automation.

Turning Inventory Strategy on Its Head

After coping with pandemic-driven supply disruptions and consumer demand shifts to online and omnichannel fulfillment, retailers are looking at 2022 as the year to revisit their inventory strategies across the supply chain, especially as it relates to getting inventory into the hands of customers, noted Nikki Baird, vice president of retail innovation at Aptos Retail. In 2022, she predicts retailers will flip fulfillment rules, replenishing stores from their e-commerce distribution centers if inventory is moving faster in stores than online, or holding back a replenishment order for stores and sending it to the e-commerce distribution centers instead if the opposite is happening.

Beverages Go Bold

Driven by the long-term effects of the COVID-19 pandemic, the 2022 forecast for beverages is shaping up to focus on celebrating life’s simple pleasures while striving for balance, according to Flavorman, a Louisville, Ky.-based beverage development company. For instance, beverages will go big and bold; drinks with subtle displays of flavor have previously taken center stage, but that is likely to change this year as beverage makers seek ways to differentiate from their competition. Be on the lookout for flavor-packed, but guilt-free beverages.

Healthy Snacking Explosion

Cooking fatigue from the pandemic combined with the trend of snacking as a meal replacement will continue to make healthy snacks even more popular in American life, according to Kim Baker Foods’ 2022 Food Trends Outlook. A growing consciousness around ingredients and nutrition is shifting diet trends, and plant-based snacking will continue to rise driven by strong growing interest among 18-to-24-year-olds and women.

Taking Sustainability One Step Further

Convenience store operators have been making sustainability a priority in recent years. But what if that sustainability push also meant they could stay open when consumers need them most? Budderfly, a Shelton, Conn.-based energy management company, projects that businesses in 2022 will move toward using solar power or geothermal heat pumps, and the batteries that store that power can serve as a generator or backup source of energy in the case of an outage. With micro-grids enabled, in difficult weather or when power systems are overloaded or unreliable, c-stores can stay open and still provide essential goods during emergency situations. CSN