News

To deploy, or not to deploy

September 2, 2004

C-store operators understand the relationship between convenience and profit. By selling products such as fuel, tobacco, snack foods and beverages, C-stores have built a base of convenience-oriented consumers.

Still, C-store operators face challenges. C-stores sell approximately three-quarters of the gasoline purchased in the U.S.

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But fuel margins continue to narrow. "Gasoline is inherently a low margin product," said Jeff Lenard, director of public affairs for the National Association of Convenience Stores. "You don't make your money at the pump; you make your money inside the store."

Since there are smaller profit margins with fuel, C-store operators face a unique challenge: How can they get the consumer to come inside?

Moving beyond gas and cigarettes

To drive additional footsteps, operators have started to offer services such as prepay, bill pay, money transfer, ring tones, gift cards and photo finishing, in addition to their existing products.

But offering services can increase staffing costs, fill precious floor space and take a bite out of any potential profit.

This is where multi-use kiosks come in. "Kiosk's that sell services are the next generation of pay-at-the-pump," said Lenard. "The idea is to take the people who don't need assistance and get them away from the counter. That way, customers who need the clerk have the fastest transaction time possible."

C-stores and multi-use kiosks complement each other because both exist to provide convenience. "C-stores attract a wide demographic of people looking for any number of things; the [multi-use] unit reflects that," said Tom Weaver, vice president of sales and marketing for Kiosk Information Systems. "It allows you to advertise several popular options to drive someone to the unit. Once they're engaged, they may take advantage of other services that they hadn't initially considered."

"The tough part is figuring out what the customers want before they know it," said Lenard. "There is a difference in sticking something in your store because you think it will help you and sticking something in your store because you will address a customer problem that people will come to your store to solve."

ATMs are a perfect example of that. "I don't think there was a big cry for C-store ATMs 20 years ago," said Lenard. "Now people can't live without them."

Tread carefully

According to Lenard, C-store operators should move cautiously when looking to deploy a kiosk solution. Any time you put a new product or service in a C-store you have to take something else out, due to space limitations. While a kiosk can generate a lot of buzz, to succeed the application has to fit the core mission.

"Any time you have a self-service application where you are asking consumers to change their behavior or do something different, you have to offer something of benefit and convey that benefit to the customer," said Lenard. "If that's not done, you will not succeed. Just saving the retailer money is not a compelling enough offer for customers. The key is you have to demonstrate what's in it for the customer."

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