At the heart of Convenience Summit Europe is the ability of global retailers to discover where the future of their business is heading, depending on which part of the world their stores are located. Or, as NACS President and CEO Henry Armour expressed it: the global life cycle of convenience retail.
Quoting futurist William Gibson, who famously said “The future is already here, it’s just unevenly distributed,” Armour described how different countries experience a particular issue at different stages—tobacco regulations, the growth of electric vehicles, supply chain changes, trends in delivery/last mile, sustainability and so on.
This global issues life cycle, said Armour, can help retailers predict and prepare for potential legislation and regulations by understanding how retailers in other countries have already handled them.
NACS surveyed individuals from retailers and suppliers, as well as industry consultants, to find out which strategic industry issues he/she had knowledge of, in which country, and the maturity rate of each issue per country.
It became clear that people liked the convenience aspect and the people, but stores were mostly just pit stops instead of destinations.
Of the 250+ responses representing 43 countries, these issues ranked high:
• Inflation, inflation, inflation • Labor, particularly the labor shortage • Advanced technologies like artificial intelligence • Loyalty • ESG from a sustainability lens • EV penetration
Content shared during the 2023 NACS Convenience Summit Europe touched on most of these topics, and then some. Record attendance, the diversity of retailers and industry suppliers and the networking proved that there is much to learn from the developing world, as well as many ideas about where convenience retail will go in the future.
Emerald Isle Convenience Retails
NACS Ideas 2 Go store tours took attendees into scenic Ireland and downtown Dublin, featuring food-focused formats that make Ireland a world leader in fresh “foodvenience.”
Located in a modern office complex, Market X is a frictionless convenience store. By downloading a mobile app and storing a payment card, building tenants can access food, snacks, beverages and other on-the-go items. The store is reminiscent of Amazon Go stores, with more than 90 cameras and artificial intelligence technology combining to make payment automatic.
Donnybrook Fair has evolved into one of Ireland’s leading gourmet destinations, featuring gourmet meals, soups, pizza, baked goods and sandwiches. The first thing attendees noticed walking into the new flagship store in Dundrum Town Centre was the seafood counter and the fresh produce—the reddest and freshest strawberries! The store is a culinary delight and the vast beer, wine and spirits selections feature local and high-end labels. Upstairs is a restaurant, Loft, serving fresh and locally sourced food and drinks.
SuperValu is part of the Musgrave Group, Ireland’s largest grocery and food distributor. With 200+ stores throughout Ireland, SuperValu is a landmark and has earned a reputation for local foods, a strong value offering, consistent support of local producers and excellent customer service. (We loved the nod to keeping it Irish on signage throughout the store.)
With nearly 200 locations in Ireland, Applegreen understands that “hunger is not a good passenger.” That’s why Applegreen embraces multiple foodservice concepts to satisfy any type of craving: Braeburn Coffee, Chopstix, Bueno, Burger King and Bakewell. This store had some elements you would typically find in U.S. convenience stores, like the Coca-Cola Freestyle fountain drink machines.
The Circle K service station in Kildare has a strong focus on grab-and-go convenience items and foodservice from strong brands, including Camille Thai, McDonald’s, and Circle K’s proprietary made-to-order and grab-and-go sandwiches and salads, as well as baked goods and ice cream, with generous seating areas.
This Maxol store won the 2021 NACS Best of the Best Store award, and it’s easy to see why. Customers have options ranging from savory to sweet to healthy to indulgent thanks to an extensive array of foodservice offers, including Rosa Coffee, Maxol Deli, The Rotisserie, Burger King and a large convenience store. Aramark operates the service station.
Centra Junction 13
This convenience store has an array of hot and cold foodservice options, like made-to-order burgers and chicken from The Burger Buff, Frank and Honest gourmet coffee, Centra-branded pastries and breads, wings and sandwiches from The Kitchen, and Moo’d Ice Cream. Centra is part of family-owned Musgrave Retail Partners.
Junction 14 Mayfield
Considered one of the most acclaimed service stations in Ireland, as well as a market leader in forecourt convenience, Junction 14 has a food-hall atmosphere, with nine different foodservice brands—Zambrero, Subway, Freshly Chopped, Gino’s Gelato, Supermac’s, Papa John’s Pizza, Insomnia Coffee Company, Mayfield Fair, Offbeat Donuts—and a Spar convenience store. Located off the M7 at Monasterevin Co. Kildare, the store has been open since 2011.
Case Studies From Around the World
Three convenience retailers that are leaders in their countries shared insights and strategic developments within their companies. The overarching theme? Convenience retail is both global and local.
OXXO’s Growth Trajectory
When Mexico-based OXXO’s leadership created a vision to increase store count, they asked whether to transform the value proposition or focus just on accelerating growth. The decision evolved from an either-or proposition to a realization that they must do both.
“We had to work with the culture first to embrace the change,” said Carlos Arenas Cadena, CEO of FEMSA Proximity Division, which operates more than 21,000 OXXO convenience stores across Latin America. “We need leaders—not just bosses—who can create positive contexts that enable us to mobilize the organization towards our goals and reach the vision we all strive for,” he said.
Carrefour’s Focus on Convenience
Anne-Laure Plettner, group growth formats executive director at France-based Carrefour, shared the company’s ambitious strategy for growing its convenience store portfolio. Each year, Carrefour opens around 700 new convenience stores all over the world; around 75% of the retailer’s stores are convenience stores. “This format is important for us, and our ambition for convenience is extremely strong,” she said.
Plettner explained that the retailer’s private label strategy is not to oust national brands, but to compliment the store offer. “We know that private label is a reason our customers come back to our stores,” she said. In Belgium, for example, 40% of sales are private label.
In Europe, 90% of Carrefour’s convenience stores are operated by franchisees. Plettner explained how important these relationships are for Carrefour’s c-store growth. “They are our first internal customer and they are an asset to succeed, but they are also one of the biggest challenges,” she said. “We have to work better with them. We frequently ask what they think of us as a franchisor, and we use what they tell us and work together on the solution.”
Lekkerland’s Eye on Customers
Germany-based Lekkerland SE realized the potential of the growing convenience retail market, which led to its relatively recent partnership with REWE Group. During the global pandemic, Lekkerland recognized the need to give consumers new reasons to actively choose its stores as their destination.
By surveying 3,000 respondents in Germany on their thoughts on convenience retail, COO Hilmar Hübers explained, it became clear that people liked the convenience aspect and the people, but stores were mostly just pit stops instead of destinations. The response? Create better value and new store formats and focus on pricing and ease of shopping.
“We need to give our customer good reasons to come to our shops every day because she has a lot of alternatives where she can do the on-the-go shopping,” said Hübers. He said “she” because Lekkerland recognizes that female shoppers are the most promising when it comes to understanding why customers engage with the brand—or don’t.
AI In Action
“I believe that at the end of the century the use of words and general educated opinion will have altered so much that one will be able to speak of machines thinking without expecting to be contradicted,” said Alan Turing in 1950.
Turing, who died in 1954 and is widely considered the father of computer science and artificial intelligence, proved that a basic computer could be “taught” to solve a problem by an algorithm. In 1956, John McCarthy, a math professor at Dartmouth, hosted the first conference on artificial intelligence, which he defined as the “science and engineering of making intelligent machines.”
Here we are 67 years later and AI is still a hot conference topic—and rightly so. Its evolution is impressive and it is proving to be a viable advanced technology for retail. As Gray Taylor, executive director of Conexxus, pointed out, the applications for AI in convenience retail are significant and include:
• Inventory management • Dynamic pricing • Hyper-personalized marketing • Loss prevention and security • Operational efficiencies • Predictive analytics
What Is AI? AI is a catch-all term for computer systems or machines that can 1. Perform tasks that would typically require human intelligence, such as: • Observational data acquisition • Visual data acquisition • Data acquisition, both structured and unstructured 2. Learn and improve on their own 3. Serve as processing engines for increasingly huge amounts of data 4. Generate increasingly accurate and actionable predictions 5. Provide actionable conclusions, including automated machines
While the world may seem to be AI’s oyster, technology for technology’s sake can be a trap. This can be a watch-out for going all in on AI if a business doesn’t first establish a fundamental question, which Frank Gleeson raised: “What problem are you trying to solve for?”
With AI, Armour suggested starting with the business problem before unleashing the technology. “Because if you just unleash it, you’re not going to get an effective answer. I’m a huge believer that the answer in almost anything resides in the question that you ask. So be very thoughtful on what the question is,” he said.
Taylor presented an AI roadmap to help retailers:
1. Consider AI a strategic weapon • Top-down support, investment and engagement • Platforms, people and culture—not functions 2. Establish clean, consistent, flowing data throughout the enterprise • Establish a central repository for data • Require vendors to support your data dictionary 3. Start slow, build culture and capabilities • Create a data-driven culture with transparency at all levels • Consider simpler robotic process improvements • Consider Internet of Things (IoT) and Web of Things (WoT) additions • Establish potential use cases, responses and clear benchmarking • Test and learn constantly 4. Constantly evaluate and adjust progress to your strategy
“What you can do with technology is incredible in terms of actually solving problems and being able to automate things,” said Mark Goldspink, CEO of The AI Corporation, adding that AI “has to have a strong business case and, let’s be honest, we’ve created more data, so why not use it?”