Innovation Surge

The convenience store industry is listening, learning and evolving to give customers what they want

BY ANGELA HANSON, LINDA LISANTI & DANIELLE ROMANO

INNOVATION HAS come to mean many things in the convenience store industry, and the definition is constantly evolving as consumers adopt new lifestyles, routines and preferences.

Going back to the industry’s early beginnings when dairy stores decided to add non-dairy categories to create a more convenient one-stop shop, the industry has had a long history and clear legacy for responding quickly to changing and evolving market conditions through innovative ideas and business solutions, said Joseph Bona, founding partner and president of Bona Design Lab, which works with retailers to create successful retail formats.

“The industry’s entrepreneurial spirit and capacity to embrace change is what paved the way for expanded hours of operation, which ultimately became the standard for all retail operations. That was followed by expanding their reach through new categories like fuel pumps, self-service beverages, QSR-like food offers, adoption of new technologies from touchscreen ordering/ payment systems to mobile apps and click-and-pay options, [to] elevating the entire retail experience,” he noted.

It’s true that many of these product and service innovations were met with skepticism when they were first adopted. But in the end, Bona believes they show how the convenience store industry’s versatility, vision and innovative thinking has resulted in a “reliable and relevant retail format that continues to fit into most consumers’ busy lives.”

Since the onset of the COVID-19 pandemic in 2020, the definition of innovation in the U.S. convenience channel has evolved at a record pace. “COVID restrictions accelerated innovation in a lot of areas; the obvious is technology,” said Ed Burcher, a partner with Phoenix-based Business Accelerator Team, which works with retailers to accelerate their growth and profitability.

“The more advanced chains used the situation to adapt and adopt new ways of doing business. Ones that were just getting started on their technology journey relied on third parties for things like preordering, delivery and fulfillment,” he explained.

Today, there are a lot more options, as suppliers have caught up with ways to provide solutions in a more cost-effective way, according to Burcher. Areas like third-party ordering and delivery provided muchneeded services during the pandemic, but came with various issues — not the least of which was the c-store not “owning” the customer. Now, there are solutions that allow for the retailer to interact, transact and communicate with the guest.

“Innovation is extremely important today, and can come in many formats,” Burcher said, citing new or upgraded items, entirely new categories, using local and regional suppliers to stock items not available at the larger chains, and innovating around processes. “There can be small or large changes in process that can improve speed, quality and accuracy if approached with the lens of: How do we make this better?”

Balancing Innovation & Familiarity

Kum & Go LC takes a deceptively simple approach to innovation. The Des Moines, Iowa-based convenience store retailer defines the word as giving its customers what they want, when they want it, where they want it — something easier said than done in a rapidly changing market.

One thing more c-store customers want than ever before is quality, convenient food.

Kum & Go met that demand by rolling out a new fresh food menu at its stores in and around Little Rock, Ark., in 2021. The offering of made-to-order grain bowls, premium sandwiches and blended smoothies has since expanded in availability and will eventually reach all Kum & Go stores in the coming years. healthier convenience store food’ from the beginning — giving customers something different, including healthier, better-quality options in the food space, without sacrificing convenience store roots of being a quick, convenient stop,” Jac Moskalik, Kum & Go’s vice president of food innovation, told Convenience Store News.

The key, she believes, is to balance innovation and familiarity. “We’re also after the concept of ‘empowered choices,’” she said. “On the healthier front, we want customers to feel good about their choices and what they put in their bodies with healthier and craveable offerings. But we also want to offer their long-time favorites, so they can indulge if that’s what is right for them that day.”

This balance extends to the menu itself, which features selections that would traditionally fit in a quick-service restaurant (QSR) setting, with the guiding tagline of “Real, Fresh, Fast Eats.”

“We are setting up our ingredient quality standards; that isn’t normally found in the c-store space. Our menu offers ingredients you wouldn’t typically expect, such as brown rice in our lunch/dinner bowls, spinach in our breakfast bowls,” said Natasha Ratzlaff, Kum & Go’s director of category management, food. “But we are still bringing the fun c-store flair to the menu. Some of the toppings on our menu offerings include Takis, Flamin’ Hot Cheetos and Corn Nuts — all of which you’d typically expect to find only in center store.”

To guide the development process, Kum & Go conducted numerous studies on types of customers, what they desire from food on the go, and how their shopping habits and trends are changing both now and in the future. The retailer also learned a great deal from the new food program’s initial pilots in Arkansas and Nebraska.

Kum & Go’s menu innovation will have a long-term effect on how it plans stores. New-build locations are being constructed with the new food program in mind; even if they won’t open with the offering in place, they are being built in a way that will make it easier to retrofit them in the future. The program’s rollout is expected to be completed in the Des Moines market this year, followed by Colorado starting in mid-2023 with the Colorado Springs market.

“We will always be in a state of innovation and feedback,” Moskalik said. “That’s how we feel we will continue to grow and succeed.”

Serving Customers on Their Terms

At High’s, adding innovative technology is supporting the Baltimore-based convenience store retailer’s primary competitive strategy of improving the customer experience.

at the site level for several years now. When High’s planned out its new flagship store in Owings Mills, Md., which is also the chain’s 60th location, it decided to emphasize new technology as a key offering.

The flagship store, which opened in mid-July, offers a variety of the most up-to-date technology options with the goal of making every shopping experience that much smoother. “We strive to provide solutions for every customer that visits our store,” said Meghan Mattern, advertising and social media manager for High’s.

Such solutions range from touchscreen ordering points to frictionless payment. The most recent update is the addition of self-checkout kiosks and mobile ordering through the High’s Rewards app, which allows customers to choose the payment experience they find most convenient. “Customers can skip the line and check out at any point during their visit,” Mattern noted.

A fundamental aspect of innovation for High’s is the ability to keep moving in pursuit of better ways to fulfill customer needs and wants. “Innovation means staying relevant to our customers — making sure that we are continuously exceeding their expectations,” said Senior Vice President Brad Chivington. “We do this by listening to their feedback and creating points of difference from our competitors.”

Listening to its customers led High’s, a division of Carroll Independent Fuel Co., to move to a dual food and technology focus, while still maintaining its connection to the brand’s heritage of dairy and ice cream.

The flagship store is as an extension of the brand’s five-year optimization project, which began in 2019. The goal is to present a fresh, relevant brand and offer across its footprint. High’s has sought to develop a signature point of difference in the marketplace — warm, inviting and delivering a premier experience with a wow factor.

Future High’s stores will have the same size, footprint and offering of the flagship store, but the company is prepared to step into the future with a flexible mindset. “[We] always try to take what we have learned and adjust our concept as needed,” Chivington said.

Testing, learning and adapting is an approach being used also by the nation’s largest convenience store retailer, Irving, Texas-based 7-Eleven Inc., as it brings more “Evolution Stores” to the market.

The Evolution Store concept originated in 2019 and was inspired by 7-Eleven’s desire to reimagine the customer shopping experience to attract new customers and increase the frequency of existing customers. The concept serves as a testing ground for customers to try the brand’s latest products and innovations in a “revolutionary” store format.

For each new store, 7-Eleven alters the design and product mix based on customer feedback and shopping habits. Oftentimes, minor changes such as building deeper shelves or increasing counter space can make a significant difference in improving the customer experience, according to Molly Long, the company’s vice president of store evolution and design.

7-Eleven cut the ribbon on the latest iteration of its Evolution Store earlier this summer. The site is the fifth Evolution Store in the Dallas-Fort Worth area, and ninth in the country.

“Evolution Stores are unique in that they offer a high standard of convenience retailing, yet no two stores are the same,” Long said. “We are very intentional about selecting sites for our Evolution Stores. We like to test a variety of store sizes and location types to see how different consumers with unique needs respond to these concepts. We also factor in the needs of the local community, so we will consider population density, traffic and demographics when selecting a location.”

“Innovation means staying relevant to our customers — making sure that we are continuously exceeding their expectations. We do this by listening to their feedback and creating points of di erence from our competitors.”

— Brad Chivington, High’s

Reaching New Horizons

For decades, Knoxville, Tenn.-based Pilot Co. has prioritized meeting the needs of its guests in order to be the preferred stop for all drivers. However, the travel center operator recognizes that the methods of doing so have evolved significantly over the past five to 10 years.

Pilot announced in March that it was embarking on a three-year, $1 billion initiative to overhaul hundreds of its travel centers across the country and improve the Pilot experience. The project, dubbed “New Horizons,” will include full remodels of 400-plus Pilot and Flying J locations, as well as upgrades at several other sites.

During the New Horizons development process, Pilot sought out thorough feedback from both customers and employees, and came away with several key insights and priorities.

For instance, professional drivers — people who “live on the road” — overwhelmingly spoke in favor of clean, comfortable showers, which led to Pilot bringing every facility up to a minimum brand standard. Additionally, restrooms are getting brighter lighting and added capacity.

Whether they’re professional drivers or average travelers, all Pilot guests value the ability to get in and out quickly. The average non-remodeled Pilot location has four points of sale, but updated technology such as self-checkout is adding three to four new options at remodeled stores.

“We continue to look for ways to help with the changing needs of our drivers, to make things easier,” explained Allison Cornish, the company’s vice president of store modernization. “It’s a lot of fun to go out there and learn and listen — to take those things and put them into action.”

Using technology as a major driver of innovation, self-checkout makes it easier to take care of multiple guests at the same time. Meanwhile, Pilot’s mobile app now provides a personalized, connected experience from the gas pump to the store. “It really starts with the app,” Cornish said.

Food is a top priority as well, cited by 60 percent of the drivers surveyed, so most Pilot locations will add new food options where possible. The retailer is also expanding retail offerings at well over 90 percent of its locations to provide a wider breadth of options.

On the forecourt, Pilot is adding new technology in the form of fast chargers at up to 500 locations through a partnership with General Motors and the EVgo fast-charging network.

“We haven’t stopped. Getting information and feedback is not one and done,” said Cornish, who noted that innovation is “part of the core of the company.”

One notable aspect of the New Horizons initiative is that while every remodeled location is being brought up to a particular standard for a consistent experience, the company’s travel centers come in a variety of shapes and sizes, which requires the retailer to evaluate each site separately to determine its unique needs and what is important to its guests and team members. “Every location is its own puzzle,” she said.

Although New Horizons is a new project for Pilot, the drive to improve itself isn’t. The primary difference is that New Horizons is a companywide effort to double down and invest in updating the entire experience, according to Cornish.

“We always had a history of innovation, but more piecemeal,” she said, explaining that factors such as alternative fuels and a tougher labor market prompted Pilot to take this big step in order to remain an industry leader. “This is the time now.”

More Evolution to Come

While there’s undoubtedly been an innovation surge since the pandemic, the general consensus is that the pace of innovation in the U.S. convenience store industry is not going to slow down.

Bona expects c-store retailers to lead the way in studying and learning how to adjust and embrace multiple fueling choices, from renewables to ethanol, biodiesel, hydrogen, electric vehicle charging, and any other new fuel sources that may come along.

“As the industry transitions away from traditional combustible fuels, new and different consumer behaviors will drive new and different product and service opportunities, with convenience operators leading and innovating the next evolution of retail,” he said.

Bona also wonders if drive-thru is going to prove to be a flash-in-the-pan idea, or will it lead to a more innovative and convenient way of transacting? “We already see some chains exploring drivethru-only formats without fuel, so the early learning is already underway,” he noted. “Where any of this leads, no one knows for certain. But what is certain is that the industry will serve a more fuel-efficient society whose consumers will continue to require a place to stop for a variety of fueling and personal indulgent and immediate consumption needs as they autonomously travel from point A to point B.”

Following the guest’s journey and the various “missions” to see how the experience can improve in the future is how Burcher sees the role of innovation further evolving in the industry. This may mean going where others will not go in order to stand out from the crowd. It may also mean eliminating products or services that are no longer resonating.

He foresees several factors driving more innovation in the industry, including electric vehicles impacting the site and its use; improving customization, accuracy and speed in the fresh food journey; and linking payment, rewards and order history to make the guest experience more seamless.

“Think about the guest and how they use your store and site, and what are the pain points that need to be addressed,” Burcher advised. “Innovation takes a commitment to doing what it takes to implement and maintain new ways [of best serving the guest].” CSN

INNOVATION SPOTLIGHT: 7-ELEVEN INC.

7-ELEVEN INC. introduced the next iteration of its Evolution Store concept in June.

Located in Dallas, the latest Evolution Store spans 6,700 square feet and offers customizable beverages, an array of digital innovations, and a Laredo Taco Co. restaurant.

On the beverages side, the store features a second self-serve espresso machine where 7-Eleven will test specialty items such as cold foam, caramel macchiato, dirty chai (a chai tea latte with a double shot of espresso), white mocha, and horchata latte. Also available on tap are organic smoothies and shakes, and vitamininfused sparkling water.

Unlike the chain’s other Laredo Taco Co. restaurants, this location has an extended covered patio for customers looking to enjoy outdoor seating, frozen margaritas and beer on tap.

The eatery serves up authentic tacos on fresh-made flour tortillas, which can be complimented by a signature salsa bar featuring salsa roja, salsa verde, creamy cilantro, habanero and more. Other Laredo Taco Co. specialties include authentic fajitas, chorizo, carne asada, carnitas, and breakfast tacos made with fresh-cracked eggs.

In terms of digital innovations, this store boasts a redesigned mobile checkout and offers delivery.

Other unique offers within the latest Evolution Store are a wine cellar with an enhanced and expansive selection of wine, and a premium cigar humidor.

INNOVATION SPOTLIGHT:

KUM & GO LC

KUM & GO LC rolled out a new fresh food menu at its convenience stores in and around Little Rock, Ark., in August 2021 before expanding it to a second market in Omaha, Neb. The chain plans to continue rolling out the menu across its existing footprint over time, and it will be part of new market operations in Salt Lake City, Grand Rapids, Mich., and Boise, Idaho, from day one.

Designed to combine delicious, flavorful food with speedy, excellent service, the menu features made-to-order items such as grain bowls, premium sandwiches on fresh-baked bread, blended smoothies, cold brew frappés, and more.

Since its debut, the retailer has relaunched the fresh food offering with additional selections, including freshly made grab-and-go breakfast burritos and made-to-order breakfast bowls featuring the choice of a breakfast potato or wilted spinach base. The menu now boasts four premium breakfast burrito varieties and three lunch burrito options.

In addition to using trial and feedback to relaunch the menu with extra items, Kum & Go introduced web ordering for customers to purchase both food and merchandise. Customers can decide whether to pick up their orders in-store, or have them delivered curbside or to the fuel pump with a minimum fulfillment time of just 10 minutes.

INNOVATION SPOTLIGHT:

HIGH’S

HIGH’S, a division of Carroll Independent Fuel Co., opened a new flagship convenience store in mid-July in Owings Mills, Md.

The retailer’s 60th store in the Mid-Atlantic region occupies 5,000 square feet of space and features a range of updated technology offerings, including touchscreen ordering for food, mobile ordering, self-checkout and frictionless payment.

The new flagship store serves as the anchor location for Owings Mills’ Red Run Commerce Center. It was designed to advance the retailer’s strategic focus on technology and food.

The store’s kitchen highlights a wide variety of signature items, such as handmade pizza, hand-breaded chicken, hand-dipped ice cream, and an expanded hot and cold beverage area.

The site also has a first-of-its-kind Carroll Clean car wash, featuring a large vacuum area.

INNOVATION SPOTLIGHT: MAPCO

REIMAGINING convenience for its guests, MAPCO revamped its store design and offerings to deliver a new “Store of the Future” concept. The convenience store retailer unveiled the new floor plan with five stores in 2021. Seven more new store openings are slated for this year, and the company is rebuilding more than a dozen existing stores using the new model.

Technology-forward offerings at select locations include the MAPCO Scan App, which enables contact-free shopping; Grabango Cashierless Checkout, initially available at two Nashville stores; selfcheckout options for shoppers; and Amazon Lockers.

Store of the Future locations also boast new food displays, including roller grills and hot and cold grab-and-go food options, as well as gondolas of guests’ favorite snacks, commonly needed household items, and a beer cave. Guests can also refresh with a drink from one of MAPCO’s new touchscreen fountain machines. Bright, welcoming messaging throughout the store helps guide guests through their shopping journey.

The Store of the Future design was created in collaboration with retail design firm Chute Gerdeman, Chilean design firm Vial AG, and architect of record HFA.

INNOVATION SPOTLIGHT:

PILOT CO.

PILOT CO. is in the process of overhauling hundreds of its travel centers across the country. Dubbed the “New Horizons” initiative, the project includes full remodels of more than 400 Pilot and Flying J locations, and upgrades at several more locations. It is the company’s largest-ever investment in store modernization.

Key elements of the remodeled stores include top-to-bottom overhauls to interiors and exteriors, featuring energy-efficient lighting, updated branding, refaced walls, and industrial-style store accents; redesigned store layouts that increase food and beverage variety and add more of Pilot’s signature fresh deli items; installation of state-of-the-art retail and fueling technology, including self-checkout; expanded and remodeled restroom, shower and laundry facilities, including touchless where possible; expanded seating and lounge areas with comfortable furnishings; and improved team member areas.

The stores also feature an improved fueling experience, as well as electric vehicle charging stations and the development of a strategy to support low- and zero-emission vehicles.

Technology is playing a large role in Pilot’s investment, as the retailer prepares to adapt to an evolving automotive space. At the same time, the company seeks to provide a consistent food experience, with options offered for every occasion. CSN