The Online Shopping Threat – A Red Herring

A few weeks ago I attended the NACS Leadership Assembly in Miami (which I highly recommend, by the way, if you can get an invitation).  One of the objectives of the LA is to look over the horizon to see threats to the c-store business of the future.

The main topics of this year’s session dealt with the Internet and the new businesses that it is enabling – online shopping, next day or same day delivery, and grocery ordering.  Admittedly, the Internet is allowing people to have faster access to a wider array of goods and services.  You can buy almost anything online today and have it delivered tomorrow – or even this afternoon.  There is no doubt that retailing has been forever changed.

My contention, though, is that online shopping is a red herring as far as the convenience industry goes.  I don’t think that it will have a significant or long-term impact on our section of the industry.

Almost by its very nature, online shopping appeals to people who plan and think ahead or have mobility issues (either through a disability or lack of transportation alternatives or a babysitter).  They realize what they need, figure out where to find it, take the time to order it (usually in conjunction with must have items such as household staples or one-off items or gifts), and plan for its delivery time and place.  Those who think ahead get the most out of the online experience.

Alternatively, the core convenience store shopper is driven by typically by two things – the need for gasoline products and impulse/immediate gratification motivation.

The fuel customer component is pretty obvious.  Aside from a few very limited attempts to do at home refueling (which is still illegal in most jurisdictions due to fire safety issues), being able to order gasoline online is still pretty far off in the future.  For the overwhelming majority of fuel customers, the only place to buy gasoline will be at a real world gas station.   The advent of the all electric car may be a cause for concern but we are at least a decade away from there being a sufficient number of cars to have a measurable impact.

On the other hand, the impulse/immediate gratification customer is on the move and wants their item of desire NOW!  There is no time for ordering online and sorting out the delivery issues.  It may be that they are driving and can’t operate their phone while they drive so they can’t order.  If they are walking they don’t want to wait until they get to their destination to pick up their delivery.  The best solution is to just pop into the local convenience store and pick up what they want.

The real casualty of online shopping will be the traditional grocery store.  Consumers will want to save time and money by ordering their weekly grocery store order online and having it delivered to their homes.  It will save them money (lower prices and transportation costs) and time (transportation and shopping at the store).  It also will eliminate the need to carry the groceries to the car and into the house or walk your shopping bags home from the store.  The larger average grocery shopping trip is much more suitable for disruption than the stop by the local c-store.

As long as humans have immediate gratification needs and act on impulse, the convenience store has a retailing future.