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The rise of convenience stores is a result of supermarkets moving to suburbs and becoming larger

While supermarkets meet consumers' shopping needs, they also have drawbacks that cannot be ignored. For example, many supermarkets are far from shoppers' residential areas, requiring transportation; the large store area and wide variety of goods consume a lot of shoppers' time and energy. Thus, a small supermarket that can meet purchasing needs—the convenience store—came into being.

In 1927, the prototype of the convenience store was born in the United States. In 1946, the Southern Company of Texas created the world's first true convenience store, 7-Eleven. In the early 1970s, Japan's Ito-Yokado signed a franchise agreement with the Southern Company and opened its first store in Toyosu, Tokyo. Since then, traditional convenience stores have developed rapidly in Japan as a unique retail format.

In the late 1970s, convenience stores were promoted in Thailand and Taiwan, while the mainland China convenience store industry started relatively late. It was not until the late 1990s that convenience stores entered mainland China, mainly developing faster in economically developed coastal large and medium-sized cities. In January 1995, Shanghai Milk Company opened the Kedi convenience store, followed by Shenzhen 7-Eleven and Hualian Lawson, which were the first batch of convenience stores in China.

Looking at the development history of convenience stores worldwide, they are generally divided into gas station convenience stores and traditional convenience stores. With the involvement of oil giants, convenience stores have become more geographically dispersed, and gas station convenience stores have shown strong vitality in Europe and America. In China, gas station convenience stores are becoming increasingly active and have significant growth potential.

Behind the achievements, problems are gradually emerging

Convenience stores, operating 24 hours a day, 365 days a year, provide consumers with convenience in shopping time and location, and are loved by consumers. With the rise of e-commerce, offline retail such as department stores, hypermarkets, and fast fashion brands have faced a "wave of store closures," but convenience stores have achieved good performance in the market with strong vitality. In 2016, the penetration rate of convenience stores in China rose from 32% to 38%, 3 percentage points higher than online shopping.

According to the "2017 China Convenience Store Development Report" recently released by the China Chain Store & Franchise Association and Boston Consulting Group, the number of chain-branded convenience stores in China has approached 100,000, with annual sales reaching 130 billion yuan.

These figures are exciting, but it is also necessary to clarify the problems facing convenience store development. First, operating costs are rising rapidly. Currently, capital continues to focus on convenience store development, store resources are becoming increasingly scarce, and the pressure of rising rental costs will persist in the future. In addition, with the rise in labor costs, the high turnover of convenience store personnel will further increase personnel costs. It is worth mentioning that costs such as water and electricity are also on the rise. The rapid increase in operating costs will become a major issue troubling convenience store development.

Second, digitalization is in its infancy. With the rapid development of the mobile internet, mobile payment technology has been popularized in convenience stores, but the value of mobile payment needs further exploration. According to the "2017 China Convenience Store Development Report," among 37 sample enterprises, only one had not introduced mobile payment, but mobile payment accounted for an average of 17% of total payment samples. Therefore, on the basis of the already high level of technology penetration, it is particularly important to further activate the application scenarios of mobile payment. In addition, half of the enterprises have introduced online shopping, with online shopping accounting for about 11%, which has not yet reached an ideal level.

Of course, issues such as imperfect franchise mechanisms and inadequate membership systems also need to be resolved urgently. In short, convenience store enterprises still have some shortcomings and a long way to go. If enterprises want to gain an advantage in fierce competition, they need to improve their business management level.

Unmanned convenience stores may be the trend of future development

Earlier, a news article titled "Another Wave of Unemployment! Unmanned Convenience Store BingoBox Expected to Expand 5,000 Stores in One Year" attracted attention. How can unmanned convenience stores be so popular? The data provides the answer. According to public information, since BingoBox began testing in the Zhongshan area of Guangzhou in August 2016, it has received tens of thousands of users, with zero theft incidents and a repurchase rate as high as 80%. Therefore, BingoBox plans to deploy 5,000 boxes nationwide within one year.

However, this is not the only case. Alibaba has launched "Tao Cafe," where users can register as members via the Taobao APP to make payments. Wahaha has also signed an agreement with a technology company to purchase 100,000 checkout systems for employee-free stores. JD.com CEO Liu Qiangdong also stated that he wants to open 500,000 JD convenience stores nationwide. Lawson has opened two stores in Shanghai's Hong Kong Plaza and MixC for retail automation pilot projects. Five major convenience store chains, including 7-Eleven and FamilyMart, have also announced that they will introduce unmanned checkout systems by 2025.

All this has made people see that the windfall of unmanned convenience stores has arrived. Although there are still many obstacles in the development of unmanned convenience stores, and there are also many pessimistic voices, judging from the current development, overcoming operational difficulties, technical difficulties, and other obstacles, the rise of unmanned convenience stores is only a matter of time.

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