DigitalCommerce 360 reported an increase of 32.4% in online sales during 2020–meaning that 19.6% of total retail sales were generated from e-commerce sites. Of those, Amazon was responsible for more than a third of online sales. Of course, much of this exponential growth can be attributed to the pandemic and consumers’ desires to reduce their exposure to the virus by shopping online. However, many consumers have discovered how convenient online shopping can be and have little desire to return to an in-person store.
Already suffering from a nationwide labor shortage, retailers have exploited this shift in consumer behavior to create a new type of business: the dark store.
Dark stores are former retail establishments that have closed their doors to the public. Shelves have been transformed into efficient warehouses where employees (or robots) can quickly fulfill online orders from their customers. Many of these locations offer in-store pickup as well as last-mile fulfillment through their own fleets or, more commonly, through partnerships with delivery services such as ShipT and Instacart.
Who operates dark supermarkets, and where are they?
Supermarket retailers have been working on dark store concepts since before the pandemic ever made the news. Major chains such as Whole Foods, Kroger, Stop & Shop, and Giant Eagle have been optimizing online ordering for years. It’s common for most grocery stores today to operate in a hybrid environment–offering both in-store shopping and online ordering with pickup and/or delivery. Still, fully dark stores have taken over real estate in lower-cost areas like suburban and small-town shopping centers.
What are the implications for convenience stores?
Gas stations and convenience store hubs make the bulk of their profits from convenience store sales. Fuel is often a break-even or loss-leader to attract customers, while the promise of quick shopping for essential items seals the deal. Now, the convenience of shopping at dark stores not only lessens the need to purchase items on the go, but e-commerce shopping also reduces the consumer’s reliance on fuel.
Convenience store owners should be strategizing methods to attract shoppers in different ways. For example, now may be an excellent time to plan for the expansion of electric vehicles on the road by installing quick charge hubs and advertising charging availability for tourists. Of course, grab-and-go meals are still popular with workers and busy families, so broadening the choices and making sure they are promoted well will help encourage shoppers to stop by. Well marketed loyalty programs continue to be effective in creating return shoppers and long-term patrons. In short, there is still ample room for convenience stores, but owners may need to be more creative in attracting shoppers.
When You Need a New Strategy, Contact the Experts at GP Energy.
GP Energy can help. We work with convenience store owners every day to help them understand the needs of their local customers and implement product lines and services to increase their bottom-line profitability. By partnering with GP Energy, we can help your business unlock its potential with new opportunities and achieve unimaginable success. Contact us today, and let’s get started.