Driving Store Traffic With Services

Family Express reports that its app-based car wash subscriptions are doing “phenomenally well.”

C-stores are exploring an array of complimentary amenities to attract consumers

By Debby Garbato

CONVENIENCE STORE GROWTH strategies have typically revolved around renovating stores and upgrading foodservice. But the COVID-19 pandemic changed that, bringing digital services to the forefront. In addition to addressing safety concerns, mobile ordering, delivery and other app-based digital initiatives proved just how pivotal the combination of convenience and technology is to the young adults frequenting c-stores.

Now, convenience channel retailers are exploring additional tech-forward services. They include bitcoin ATMs, electric vehicle (EV) charging stations, digital lottery, and car wash subscriptions. These amenities are not major profit centers. Rather, the emphasis is on using these services to further differentiate c-store brands, drive traffic, and increase dwell times.

“For years, c-stores invested in foodservice to get people into stores. Now, they’re looking at the next generation of ‘stuff’ to pull shoppers in,” said Eric Dzwonczyk, a global co-leader of the restaurants, hospitality and leisure practice at AlixPartners in New York. “There’s much convergence of different themes, with formats changing quickly.”

The new traffic drivers require little or no labor. They could help c-stores recoup some of the revenue lost during the pandemic. “They’re looking at things that will be a draw and impact overall margins and revenue,” said Thomas McElroy, principal of the retail and consumer practice at Deloitte Consulting in Charlotte, N.C. “They were hit pretty hard. High-revenue generators like fountain drinks and self-service were often shut down. They’re trying to adjust.”

Electric Vehicle Charging

EV charging is the most popular new service. Its future seems certain, with President Biden calling for half of new vehicles to be electric by 2030. This year, EVs will represent about 3.4 percent of new car sales, according to EVAdoption, but the number of charging stations is already rising. In 2018, there were 64,000 in the United States. By 2020, there were roughly 90,000, according to figures from the Alternative Fuels Data Center and consultancy InsideEVs.

“Top of line with everyone is EV,” noted Dzwonczyk. “It’s going to happen.”

The nation’s largest c-store operator, Irving, Texas-based 7-Eleven Inc., is being aggressive about EVs. By the end of 2022, it will install 500 direct-current, fast-charging EV ports at 250 U.S. and Canada locations. Currently, it has 22 stores that offer EV charging. All of these locations are adjacent to major roads and highways.

Other retailers are optimistic but proceeding cautiously.

“EV is evolving quickly,” said Kevin Kelly, senior vice president of hospitality at Westlake, Ohio-based TravelCenters of America Inc. (TA), which will soon have

charging at nine of its 275 locations. “Good dwell times spell opportunity. We want to drive people to non-fuel transactions. But it’s emerging technology. We don’t want to invest in the wrong infrastructure. How do you balance the cost and monetize it? Do you build a battery facility or a solar field to supply it? We’re hoping government will supplement.”

In the Midwest, Des Moines, Iowa-based Kum & Go LC has been offering EV charging since 2018, but only 22 locations have it. Competitor Ankeny, Iowa-based Casey’s General Stores Inc. offers charging at about two dozen stores. On the East Coast, Pennsylvania-based Wawa Inc. has EV charging at 50 locations. Altoona, Pa.-based Sheetz Inc. also offers EV charging, as do some smaller chains in the region.

According to AlixPartners, 80 percent of charging is done at home, 13 percent is done at highway c-stores, and just 3 percent is done at other c-stores, where dwell time is often short. Hence, not all convenience stores will make for successful EV destinations.

Many c-store operators are concerned about losing fuel volume revenue and customer traffic to EV charging. Fuel can represent 50-60 percent of a site’s earnings. “People buy fuel, then come into stores,” said Dzwonczyk. “How do I offset profits and margins?”

Truck stops and travel centers are well positioned for EV charging. They have interstate locations, with myriad amenities already driving up dwell time.

“We’re not the corner store,” said TA’s Kelly. “Dwell time is long. We have quick- and full-service restaurants and c-stores. You can walk your pet. It’s like a miniature community. Our large sites are a competitive advantage.” TA also serves truck drivers with 29 on-site Verizon stores, 27 barber shops, 26 medical centers, basketball hoops, and fitness centers.

Digital Lottery

Technology, the pandemic and consumers’ desire for convenience are propelling the growth of digital lottery. In 2020, sales increased 25.7 percent, according to Global Industry Analysts Inc. For 2021, digital lottery sales are projected to reach $2.3 billion.

In July of this year, Laval, Quebec-based Alimentation Couche-Tard Inc., the parent company of Circle K, partnered with Jackpocket to begin offering digital lottery through 1,300 locations across Arkansas, Colorado, New Hampshire, New York, Ohio and Texas.

Jackpocket is a licensed third-party lottery app that lets users order official state lottery tickets fulfilled by a licensed lottery retail partner. Digital lottery is not currently legal in all states.

According to Jackpocket, 67.8 percent of digital lottery players were under the age of 45 during the second quarter of 2021. Consumers aged 55-plus have also increased their usage. At Circle K, customers receive exclusive deals via the Jackpocket app and by email, including “surprise alerts to drive foot traffic,” said Jackpocket CEO Pete Sullivan. Circle K is promoting the lottery app in its stores, at fuel pumps, in digital ads, via emails, and via a team member incentive program. This fall, the app will be rolled out to sister brand, Holiday.

“We’re seeing demand for digital options in every industry,” noted Sullivan. “We want to meet people where they are. We don’t anticipate lottery moving away from convenience stores completely. We’re here to offer an option for those who find it easier to play from their smartphone.”

Not all digital lotteries are app-based. In June, Whitehouse Station, N.J.-based QuickChek Corp. (which is owned by Murphy USA Inc.) launched a web-based platform with Lotto.com that lets New Jersey shoppers purchase lottery tickets on any device without having to download an app or deposit money into an account. Payment is managed by PCI-compliant payment providers.

Don Leech, QuickChek’s vice president of marketing and operations, said the partnership complements the chain’s other digital services. “We’ve been providing convenience through mobile ordering, our mobile rewards app, and the ability to order delivery online. Our [Lotto.com] partnership lets us further meet the needs of consumers who prefer shopping and paying online.”

Couche-Tard is partnering with Jackpocket to offer digital lottery through 1,300 of its locations.

Bitcoin ATMs

Historically, c-stores have served unbanked and underbanked consumers with services such as check-cashing, MoneyGram, Western Union, and money orders. Unbanked consumers lack a checking or savings account; the underbanked have one but not both.

According to published reports, 25 percent of consumers overall fit into one of these two categories. And among just the millennial generation, 33 percent are underbanked. These groups are seen as viable customers for bitcoin ATMs, a new, emerging service in the convenience

channel. Bitcoin ATMs let users pay cash to buy and sell virtual cryptocurrencies. Bitcoin can be stored in a digital wallet, sent to others, and used as payment with certain retailers. It is decentralized, meaning it is not controlled by a banking system. There are no remittance fees for international transactions and no currency exchange rates. Transactions are stored on the blockchain.

Worldwide, the bitcoin market grew from around $100 billion in 2016 to $2.1 trillion today, according to CoinMarketCap. Roughly 3 percent of c-stores currently offer bitcoin ATMs, said Brandon Mitz, CEO and president of Atlanta-based Bitcoin Depot.

With c-stores’ complementary demographics and the need to drive traffic, he believes that number will climb. “When you bring customers into stores, it creates many opportunities for impulse buys and to learn about products. The largest category of bitcoin users are millennials. Millennials — and Gen Z — value convenience,” Mitz explained.

Bitcoin ATMs occupy an 18- by 22-inch footprint. Retailers receive rent regardless of performance. If machines perform well, the compensation is higher.

Early entrant Circle K is optimistic about bitcoin, with machines in 1,000 stores. Plans call for expansion to 10,000 stores. “Our Bitcoin Depot partnership gives our brand an important, early presence in the fast-growing cryptocurrency marketplace as a convenient destination where customers can buy bitcoin,” Denny Tewell, senior vice president of global merchandise and procurement for Circle K, said in a prepared statement.

Other retailers are unsure about how bitcoin will fit in and are proceeding more slowly. TravelCenters of America, for instance, is piloting 20 deposit-only bitcoin locations.

“It’s in the early stages and not very transactional from a consumer standpoint,” said TA’s Kelly. “Digital interfaces are becoming more important. But there’s uncertainty about how bitcoin will evolve as a consumer tool.”

C-stores are giving more attention to the car wash business, adding digital subscriptions and more add-on wash options.

Bitcoin ATMs let users pay cash to buy and sell virtual cryptocurrencies.

Car Wash

C-stores have had car washes for years, but innovation in equipment and marketing has been limited. That is now changing, with some c-stores adding more wash options and digital subscriptions.

Add-ons include higher-end waxes, tire shiners, and undercarriage sprays. These can move prices from around $6 for a basic wash to a $26 package at the extreme high end.

App-based monthly subscriptions drive repeat traffic and can link to other business segments.

“Car wash is a nice revenue stream,” said Ken Underhill, director of marketing at St. Louis-based car wash supplier D&S Car Wash, which offers a modeling tool that lets c-store operators “plug in” numbers to make revenue and profit projections following investment costs.

Underhill acknowledges, however, that car wash doesn’t seem to have a high profile compared to the in-store aspect of convenience retailing. “It’s kind of an add-on, and most equipment has been fairly utilitarian. Historically, c-stores haven’t marketed it. I’m not sure why,” he said.

Miami-based Sunshine Gasoline Distributors is one chain bucking the trend. It has invested in better equipment, including rollover and tunnel car washes, and added perks to many of its 100 South Florida car washes, including ceiling LEDs that “create visual stimulation,” said Eddy Alvarez, senior operations manager. “It’s a bit of a Miami light show.”

Last year, Sunshine launched app-based monthly subscriptions at 45 of its locations.

“You don’t leave your car. You open the app, request a code, punch it in, and the wash activates,” said Alvarez, noting that Sunshine promotes its car wash offerings via

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“For years, c-stores invested in foodservice to get people into stores. Now, they’re looking at the next generation of ‘stuff’ to pull shoppers in.”

— Eric Dzwonczyk, AlixPartners

screens at the gas pumps, car wash QR codes, local radio, and in-store associates.

These changes have made Sunshine a destination. Alvarez said the retailer plans to expand the subscription program, continue upgrading its washes, and will add standalone car washes.

Valparaiso, Ind.-based Family Express Corp. launched app-based car wash subscriptions two years ago. Subscriptions are sold at all of the chain’s stores and redeemable at all of its car washes. Car wash same-store sales have increased 30 percent in the last two years.

“They’re doing phenomenally well,” said Family Express President and CEO Gus Olympidis, noting that the subscriptions are “constantly promoted” via social media and alongside its other business segments. The retailer continues adding car washes to more locations.

“The innovation in car washes is how you engage consumers with payments, loyalty and subscriptions to provide value,” Olympidis explained. “It’s bundling car washes with the overall store experience.”

Under a partnership with NCR Corp., Family Express is also letting customers place digital food orders at its gas pumps and have the order brought to their vehicle. This initiative was about 90 percent deployed as of press time.

“They pay at the pump with their existing fuel purchase,” said Olympidis. “Without the technology, these would be separate transactions.”

When it comes to these new services, it still remains to be seen how well they will perform long term and how they will impact c-stores’ other business segments. The jury is also out on which c-store business models they will complement best. But one thing is certain: tech-forward innovations will continue and are here to stay in the convenience store industry. CSN

Family Express is adding freestanding pet wash kiosks to every location that can handle it.

Serving the Furriest C-store Shoppers

When it comes to traffic-driving destination services, convenience stores have not forgotten about consumers’ furry friends, with dog parks and pet washes becoming an important part of some retailers’ operations.

According to published reports, 78 percent of Americans who own pets travel with them, and many of their decisions are made around the availability of pet amenities. Hence, a convenience store with a pet walking or exercise area becomes a planned stop, with those pet owners also fueling up and purchasing food and beverages while they’re there.

Among professional truck drivers, 35 percent travel with pets — and they are always on the road, said Kevin Kelly, senior vice president of hospitality at TravelCenters of America Inc.

The travel center chain has had pet walking areas for 10 years. Today, they are at 238 locations, with the retailer constantly upgrading them. “Usually, it’s a nice green space with shade,” said Kelly. “You can grab a bag for the animal’s waste. We’ve been adding fences, benches and water.”

The retailer is considering adding dog washes to some locations as well.

Edmonton, Okla.-based OnCue Express goes all out with its 8,000-square-foot dog parks. Oversized dog statues make them highly visible from nearby interstates. Fenced-in parks have separate areas for large and small breeds, along with watering troughs, shady areas, fake fire hydrants, and an agility course with ramps and other toys for dogs to climb on and jump through.

Along with walking areas and full-scale dog parks, pet washes can serve as a destination — and provide incremental income with minimal labor requirements. These washes benefit pet owners by eliminating the need to clean a messy bathtub at home.

Convenience store operator Family Express Corp., based in Valparaiso, Ind., is adding freestanding pet wash kiosks to “every location that can handle it,” said President and CEO Gus Olympidis. The turnkey, temperature-controlled kiosks come pre-assembled. Plumbing and electricity are connected in about 90 minutes.

The kiosks are decorated with faux fire hydrants and a custom “FE Pet Wash” sign. They provide 12 minutes of washing for $10. Soap, conditioner, flea/tick treatment, pet deodorizer and disinfectant are dispensed through a water sprayer. The washes are monitored via video camera.

Family Express is using digital promotions to tout the service.

Olympidis believes these pet washes send “a subliminal signal” about Family Express being what its name implies, since “pets are part of the family.”

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