7 Reasons Not To Buy Convenience Stores
Ah, the convenience store. It seems like there is one on every other corner. Actually, when I was living in Chicago downtown, there were three 7-11’s not far from my apartment. These stores do serve a purpose. Unfortunately, they hustle you as well.
While I know many of you will argue that your experiences with your local convenience stores are vastly different from mine and I understand this post may be construed as an offensive piece, I still think it’s worthwhile for me to explain my distaste for convenience stores because I’m sure at least some of these points will be applicable to you.
Ultimately, I strongly believe you can and probably should avoid the convenience store for the following reasons:
Convenience stores are struggling to make a profit.
News articles in the last few months have highlighted stories about Macy’s, Bed Bath & Beyond and the Gap and the difficulties those individual stores are experiencing. Even at Nordstrom, where customer service is king, has soft sales and their stock is down 42 percent from a year ago.
Why are convenience stores struggling?
Here are seven reasons:
The Switching Economy:
According to Accenture, one of the largest consulting firms in the world, the “Switching Economy” has increased 26 percent since 2010. Customers are becoming less and less loyal.
Competition has never been greater:
Third party sellers such as Amazon, Walmart, Wayfair make it easy to find the same item for less money. Start-up companies such as Uber didn’t even exist prior to 2009 and are now worth over $50 Billion. Consumers are connected to their mobile devices and at any point in time, a competitor can entice your customer with a promotion offer even at the point of purchase.
Brick & Mortar and E-commerce work in silos:
Convenience stores were shortsighted when developing their on-line businesses. The physical store and e-commerce each have their own organizations and rarely interact with one another. A customer could have been a loyal brick & mortar customer for ten years, but online, the same customer is a newbie with no history.
Consumers are encouraged to shop on-line:
For some reason convenience stores think it will be more profitable for customers to vacate the store, go home and shop online. However, the Internet allows competitors to advertise a similar product perhaps at a lower price point. The customer is drawn away from your company’s products to whatever is available for less money. Products become commodities and personalization is lost.
Budgets can no longer be reduced:
Since the economic downturn in 2020, corporate America has been managing to squeeze profits by reducing budgets, stretching staff thin and adding technology to replace human labor. Even big and established stores like Macy’s are now considering selling their brick & mortar stores they have owned for decades and leasing them back. I’m not sure if that’s the best long-range plan.
Knowledgeable sales associate is rarely valued:
Customers have become more knowledgeable, while experienced sales associates are far and few between. Too many stores eliminate seasoned staff with a history of building strong customer relations with inexperienced help who only way to lower the cost.
Millennials trust friends and people they know more than brands:
Before Millennials make any purchase they read reviews on social media. They trust their friends and even strangers more than corporate messages. For Millennials especially, stores must ensure that quality is integrated into their products as well as service delivery. They also want to do business with companies who have totally integrated social responsibility into their corporate mission and messaging.