Convenience Stores Might Not Be Amazon-Proof

Convenience Stores Might Not Be Amazon-Proof

Amazon Go is already changing consumer attitudes

Convenience stores were once a retail segment that seemed immune to online competitors. Just like the name says, they are convenient, as well as plentiful, always there if the mood for a Slim Jim or lottery ticket strikes. 

Yet as Amazon starts to encroach upon categories thought of as “Amazon-proof,” the online retailer is also slowly creeping into territory traditionally reserved for the 7-Elevens of the world.

Even though there is only one Amazon Go location in Seattle, opened nearly a year behind schedule in January 2018, thanks to media attention most people have probably heard of the “Just Walk Out Shopping” concept, where the store has no cashiers or checkout at all.

An AlixPartners report released in March 2018 gauged consumer attitudes about convenience stores generally and as it related to Amazon. A majority (58%) of US internet users surveyed said they didn’t foresee any changes in buying c-store products (beverages, prepared foods, snacks, etc.) on Amazon in the next 12 months.

When asked about changes in behavior if an Amazon Go—or other Amazon-branded convenience store—were to open nearby, most respondents said they wouldn’t change their shopping habits. But over one-third said they would shop somewhat less at convenience stores, and 9% said they would do so significantly less.

Of course, hypotheticals aren’t the surest gauge of real outcomes, but even taking Amazon Go out of the picture, convenience stores aren’t immune to new technology and ecommerce advances. Even services that don’t seem directly related—food delivery like Uber Eats or meal kits like Blue Apron—could impact the space with their emphasis on convenience.

Despite threats of robots taking over our jobs or automating human tasks, for the time being an Amazon Go-type experience could not be easily replicated by retailers en masse. But offerings like self-service checkout and mobile payments could be—and have been—realistically implemented.

According to the AlixPartners survey, the top three technologies ranked by convenience store importance were mobile loyalty programs, self-checkout and mobile coupons received prior to arrival (mobile payments ranked eighth). There haven’t been many new consumer surveys about Amazon Go, but one of the most recent was conducted in January 2017 by Shorr Packaging ahead of the reported launch. It found that the biggest obstacle to shopping at an Amazon Go store among US internet users polled would be the inability to use coupons, cited by 34% of respondents.

Amid the razzle-dazzle of new technology, it’s easy to forget the importance of discounts and rewards for US consumers. Walking out the door without paying is good, but being able to use a coupon or a loyalty card is better.