Welcome To The New C-Store Innovation Game

Retail innovation labs – incubators or tech hubs – aren’t confined to operations run by the likes of Amazon or Walmart. A new lab store from 7-Eleven underscores the innovation wave that is taking place in the convenience store sector of retail – a sector ripe for change, disruption and growth.

Located in Dallas, the 7-Eleven lab store is designed so that customers can test and purchase the newest innovations from the retailer. The location, which stocks products ranging from craft beers to handmade tortillas – has technology that lets shoppers use their phones for payments. The store also has a space dubbed “The Cellar” that has a craft beer and wine selection, along with a growler refill station. In addition, the store has a bar with cold treats such as ice cream and frozen yogurt.

The company already had operated an innovation facility in Japan.

The news comes as 7-Eleven has recently rolled out scan-and-go options for customers in 14 stores in Dallas, per reports in November, and is looking to equip all of its U.S. stores with the innovation. Using the 7-Eleven mobile app’s Scan & Pay feature, shoppers could scan merchandise they want to buy. At the same time, the app is connected with the 7Rewards loyalty program, which alerts shoppers to discounts and deals.

Innovation Lab Growth

Retailers keep turning to innovation labs to not only design new products and services, but also to craft collaborations and find better ways to reach specific consumer segments. One of the latest examples from the larger world of retail comes from Foot Locker. The athletic shoe and apparel brand has announced its “Greenhouse” incubator initiative, a vaguely-defined concept that will include a think tank and collaborations – and, ideally, will lead to new brands, among other gains.

The 7-Eleven innovation effort comes at a time when the convenience store sector is poised for significant changes, with some chains even trying to reinvent themselves for a new age as millennial consumers approach their peak earning years and the connected vehicle ecosystem starts to emerge. And among the main drivers of those changes are not new products, but new ways of doing payments.

Payments Role

As PYMNTS research has shown, payments – specifically, payments apps – matter when it comes to attracting those younger (though not-so-young) consumers. The PYMNTS “Paying At The Pump Report: What Drives Mobile Adoption” found 43 percent of high-income millennials would be more likely to visit a gas station if its app offered convenience, loyalty and savings.

The research also found 65 percent of high-income millennials – consumers born between 1978 and 1995, with annual incomes ranging from $75,000 to $150,000 – made at least one gas purchase per week. That compares to 58 percent of other respondents who said the same. And half of those high-income millennials said that about 74 percent of their gas purchases were made via mobile apps that encourage them to keep using apps to buy gas.

Other Innovation Areas

Payments isn’t all that’s needed when it comes to convenience store innovation, though. According to one recent analysis, convenience store operators “need to hold fast to customer-centric business models and utilize data to get more information about their customers to create not just a more relevant experience, but also a more resonant experience.” In fact, creating such experiences is among the hottest trends in retail, and helps guide work in other retail innovation labs, not just efforts devoted to convenience store commerce.

As convenience stores work to shed their old images as mere gas stations – and to offer better food and even pre-made meals to meet the demands of busy, hungry customers – grocery stores are also working to make sure they keep up with the push toward innovation.

The Texas-based H-E-B supermarket chain, for instance, recently make public its plans for what one report called an “81,000-square-foot technology facility and innovation lab in Austin for its expanding digital team and its on-demand delivery service, Favor.” The “tech hub will add several hundred jobs to the local economy from a cross-section of professional areas of expertise, such as product management, product design and software engineering,” the report continued.

As PYMNTS readers know, the grocery sector is an area of retail undergoing significant technological development. Now, as 7-Eleven shows, convenience stores are also improving their innovation game.