Drink fountains and gas pumps, prepare for a jolt. The predicted growth of electric vehicles could lead to a revolution in the convenience store industry.
There are over 2 million electric vehicles on the road today, and their popularity continues to grow – 45% of new car sales could be electric by 2035, reports Reuters. California lawmakers in August approved a plan to phase out the sale of new gasoline engines cars and light trucks by then, with 35% of sales expected to take effect by 2026. And the ramifications will likely extend beyond California – other states including Massachusetts, Washington and New York, set similar goals.
This means almost all 12,000 “C-stores” in California alone (Statista) could have the opportunity to become electric vehicle stores if they add charging stations. (Of the nearly 150,000 convenience stores in the United States, nearly 117,000 — 80% — sell gasoline.)
And with these charging stations, convenience retailers will need to add the conveniences to keep their electric vehicle customers busy, and rapidly.
Think: Convenience stores thrive on habits, but habits could be changed. Who’s to say there aren’t already business models on the horizon that could alter these routines? Not just EV charging boxes, but rows of charging stations located in walkable plazas or EV service centers where multiple companies operate.
There is a sense of urgency in which convenience store operators should consider these ramifications.
But first they must overcome mighty obstacles
California represents a fertile testing ground for retailers to transform from quick stop points to stay hubs. But some may even find it difficult to sale electricity.
According to National Association of Convenience Stores (NACS), US policymakers could encourage government agencies and electric utilities to build, own and operate their own power plants. Such guidelines, which may vary from state to state, “would retard the ability of the private sector to invest in electric vehicle charging infrastructure and ultimately impede the development of a charging market.” robust,” NACS says on its website.
Yet this potential hurdle may be of less concern to retailers watching the cost of investing in charging stations. The cost of installing an EV station that provides a full charge in three to six hours could range from $3,000 to $13,000depending on the quality and conditions of installation, estimates the transport information group Inspire Advanced Transportation.
Some are willing to make that investment, including 7-Eleven. In June 2021, chain store C announced plans install 500 charging stations at 250 of its sites by the end of 2022.
That’s a lot of Slurpee sales.
Electric vehicles require creative outlets
C stores that can afford to add charging stations will inherit the opportunity to redefine who they are. Some retail experts may claim that they will in fact be obligatory to change their formats, because charging stations will force customers to hang around much longer than what convenience stores were designed for.
How long? It may take 30 minutes to several hours to charge an electric vehicle, according to US News & World Report, so those owners will be looking for something to do. Here are five affordable ideas convenience stores can consider to transform their spaces:
- Designer hot dogs and fountain drinks. When the dynamic of the C-store stop changes from grab-n-go to sit-n-wait, the nature of the food on offer should also change. Think better, quick, casual meals that can be savored, but don’t require a full kitchen. Ethnic and gourmet condiments and surprise ingredients (think herb chipotle pepper) can turn a hot dog or burrito into an Instagrammable snack. Fresh juices and meatless options can be offered to health-conscious EV drivers.
- Rental workstations. Granted, this service would need upgrading or expanding, but if C stores audit their inventory, they may find categories that can be reduced. A reasonable rental fee for a work module, with Wi-Fi, can help cover sales as well as reduce fulfillment, storage, and storage expenses. Point of reference: these work cabins at the airport, which could charge $30 an hour or more. Chains that offer rewards programs could allow members to earn and redeem their points at those stations.
- Streaming video booths. These workstations? They can be converted into video streaming booths if the store is able to invest in a few monitors. Fees may be slightly higher and may encourage the purchase of snacks and non-alcoholic beverages. Again, reward members can earn and redeem points for this use, while providing deeper and more diverse information about their preferences.
- Automotive detailing services. A menu of additional automotive services, from interior cleaning to exterior polishing, can be contracted out to specialists who can work on electric vehicles while they’re charging. This doubles the convenience for customers, while convenience store operators can collect a percentage of the fee.
- Charging hubs for small devices. Hey, it’s just a “because we care” convenience. Convenience stores could add free charging stations for other electronics in their customers’ lives to use while waiting. These stores may also set up displays of Chargers for sale nearby.
Although the market size of the convenience store sector has increased on average by 3.1% per year from 2017 to 2022, its growth in 2022 is expected to be just 1.8%, reports IBIS World. Among the factors affecting growth: competition from supermarket fuel chains, nearby dollar stores and smaller-format food vendors. Electric vehicle charging stations, while a big investment, could be the only investment that will accelerate a C-store’s growth beyond the average.
Time, place and technology are all important factors. Convenience stores in California, for example, are probably already assessing the cost-benefits. Operators in other states should be very careful. Electrical energy, after all, will not short out. It is itself a vector of growth.