C-stores weigh tech investments against ROI demands

Convenience store operators face pressure from customers demanding speed and personalization, expensive labor markets, and the operational complexity of expanding foodservice. This environment forces leaders to scrutinize technology investments through a much sharper business lens, according to Gary Price, executive director of convenience stores retail technology sales leader at Toshiba Global Commerce Solutions.

The cost of staying behind

“While legacy systems can require a significant amount of investment to adapt to changing market expectations, the larger issue is the unmeasured cost of inaction,” Price said. “When existing systems prevent retailers from keeping pace with the market and the experience guests expect, they’re leaving revenue on the table from declining customer satisfaction.”

Although retailers recognize the potential in upgrading technology, today’s economic environment means that every capital investment must be tied to quantifiable business objectives. From improving loss prevention and operational efficiency to creating more seamless customer experiences and building a foundation for future growth, technology investments must demonstrate clear returns.

Three questions before you buy

Before evaluating features or comparing vendors, c-stores should start with the desired business outcome. Three questions can help guide the decision process.

Will it deliver measurable ROI?

The first step is to quantify what the investment is expected to deliver, from revenue growth to expense reduction. Retailers should also consider the value of being able to respond faster as market conditions and customer expectations change.

Better data can be particularly valuable here, Price notes. “By analyzing transactions and customer behavior through loyalty programs, retailers can gain insights that inform product mix and accompanying pricing and promotional strategies,” he said.

Loss prevention provides another tangible opportunity. Price points to camera-vision solutions that can keep tabs on activity throughout a store, including at the sales counter, ensuring cashiers ring up the correct number of items and that all cash sales are accounted for.

“When multiplied by thousands of locations nationwide, we see that brands are able to save hundreds of millions of dollars a year through these investments,” he said.

Self-checkout offers another example of how a relatively small productivity gain can add up across a large store network. While it may not deliver a one-to-one reduction in staffing as it can in grocery, Price said his team has found it can effectively reduce or redeploy the equivalent of one full shift per week, which can be significant when extrapolated across 52 weeks and an entire store base.

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Will it improve operational efficiency?

As c-stores look beyond traditional sources of differentiation, such as fuel pricing and increasingly compete in areas like foodservice and customer experience, removing friction for both associates and customers becomes essential.

For associates, that might mean simplifying workflows or improving back-of-house and kitchen operations. Reducing day-to-day obstacles gives them more capacity to engage with customers and deliver more personalized service.

For customers, operators should prioritize factors such as reducing checkout friction, improving inventory management or making foodservice operations faster and more consistent.

“Technology solutions should cover the entire store, offering speed at checkout and the ability to manage inventory and other activities,” Price said. “You want to have a seamless system that supports all those functions holistically.”

Will it provide long-term growth and scalability?

A technology investment should solve current operational challenges while giving retailers the flexibility to respond to what comes next. That means looking beyond the initial feature set to assess whether the underlying architecture can adapt as the business evolves.

For large operators, scalability can also create immediate efficiencies. Price recalls working with a retailer managing five different hardware platforms; moving to a single, out-of-the-box solution streamlined operations while cutting expenses and boosting output.

Tapping outside perspectives

Building a strong technology business case shouldn’t happen in isolation. Price encourages retailers to tap trade associations and connect with operators in other regions to discuss best practices. He also recommends taking advantage of the perspective technology providers can offer.

“Because we regularly talk to hundreds of retailers at Toshiba, we can bring that broad perspective on emerging solutions and common challenges operators face to our consultative approach,” Price said.