Convenience stores are located in convenient locations: densely populated areas, bus stations, train stations and are designed to be convenient for customers, with parking spaces or convenient walkways for pedestrians to enter the store.
Convenience stores are small in size. Although they vary greatly in size, a typical convenience store will be 5,000 square feet (150 m2) or less, according to the NACs.
Convenience stores have long opening hours and are open 7 days a week, open until late at night. Usually, these stores are open to serve customers about 16 hours a day, closing at 12 o'clock and opening at 6 o'clock the next morning, but in developed countries like the US and Japan and recently many other countries, many convenience store chains are open 24/7.
The number of goods in the convenience store is always greater than or equal to 500 SKUs
Goods sold in convenience stores are essential goods, convenient for customers' needs, usually canned foods, drinks, snacks, books, magazines, groceries, personal hygiene items... sometimes even office supplies, cosmetics. Convenience stores also provide fast food such as sandwiches, hamburgers, baguettes... But the following types of goods are typical of convenience stores, which are: groceries, drinks, snacks and cigarettes. 3
1.1.3 Location of convenience stores
Besides other types of distribution in the process of distributing goods and services, convenience stores play the role of a retail distribution channel that brings goods from suppliers directly to customers.
3 http://www.nacsonline.com/NACS/Resource/IndustryResearch/what_is_a_cstore.htm
Through the diagram below, we can see the position of convenience stores in the modern distribution system. As a link in the distribution system, convenience stores directly provide goods to end consumers, in addition to supermarkets, hypermarkets, department stores, discount stores, and shopping malls.
Diagram 1: Modern consumer goods distribution system
Retailer
CH
utilities
Super
market
grand
supermarket
CH
department store
Door
sale
CH
normally
Center
commerce
CH
specialized
Manufacturer
Agent, broker
Wholesaler
Wholesaler
Consumers
Synthesized according to Marketing Essential_basic Marketing textbook (Philip Kotler, Statistical Publishing House, 1999)
1.2. Concept of convenience store chain
A convenience store chain is a collection of convenience stores from the same distributor, located in different locations but unified together.
on factors: signs, prices, types of goods, methods of store management, ways of displaying goods as well as store appearance.
2. Compare convenience stores with supermarkets
Convenience store | Supermarket | |
Distribution type | Retail | Retail |
Scale | <150m2 | ≥400m2 |
Service form | Self-service | Self-service |
Product categories | Limited, mainly groceries, snacks and drinks, newspapers and magazines, gasoline is a common item | Rich, many varieties, quantity of goods many times more than convenience stores, no gasoline sold |
Opening hours | 16~24h/day | 13~15h/day |
Time customers buy | Short (usually under 10 minutes) | Long (can be greater than 20 minutes to 1, 2 hours) |
Number of employees | little | Many |
Price | Higher than the price in a regular supermarket | Same or higher than retail prices, lower than convenience stores |
translation | Home delivery, scratch cards, express delivery, train and bus booking, electricity, water, phone bill payment... | There are no services available. |
Accessibility | Because it is located near a crowded area, there is easy access for children to enter the store. | More difficult because it is usually located in a commercial area or far from the city center due to the large area. |
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Parking
Yes, maybe or maybe not, Maximum 8~10 tons for large convenience stores | Wide, can contain hundreds of tons |
3. Advantages and disadvantages of convenience store chains
3.1 Points
Convenience stores are different because of the following features:
The outstanding advantage of convenience stores is the long opening hours, from 16 to 24 hours a day, customers can shop at any time at convenience stores near where they live because these stores are often located in residential areas convenient for customers' needs.
Convenient for customers who need to buy things quickly, customers can easily find what they need in just a few minutes at convenience stores while it would take them more time at regular stores.
Diverse services compared to other modern retail formats, convenience stores have home delivery services, gift wrapping, ticket sales, phone cards, mail services, express delivery..., services that are difficult to find in supermarkets, department stores, and shopping malls.
Compared to traditional store models, goods in convenience stores are clearly listed, the space is clean, the goods for sale have clear origins, and customers are free to choose goods.
3.2 Disadvantages
However, convenience stores also have certain disadvantages, which are:
Goods in convenience stores are limited in quantity and variety compared to supermarkets or department stores, goods such as household items,
Kitchens are often not available, so the customer base and volume of goods sold cannot be compared with these types of retail.
The prices of items in convenience stores are often higher than the regular prices of goods in supermarkets or markets, which is why some low- or moderate-income consumers do not like this type of store.
The basic characteristic of this type of store is its convenient location, in a densely populated area, so the rental price is not small, and the capital turnover rate is slow because the goods are mainly groceries.
4. Types of convenience stores
According to the National Association of Convenience Stores (NACs), most convenience stores used to be similar in size—2,400 square feet with packaged goods—but now, businesses in the industry have come to market with different types of convenience stores and different types of goods. There are mini-convenience stores, traditional convenience stores with diversified food services, and even “hyper” convenience stores, large-scale with a variety of goods and seating for customers to eat in the store. By far, the fastest-growing segment of the convenience store industry is the “non-traditional” store—that is, stores designed with a different area of 2,400 square feet, or larger, or smaller.
NACs divides current convenience stores into six types, which are:
1) Kiosk
2) Mini Convenience Store
3) Limited Selection Convenience Store
4) Traditional Convenience Store
5) Expanded Convenience Store
6) Hyper Convenience Store Below are details about the above mentioned types of convenience stores:
4.1 Kiosk
Kiosk is a type of convenience store with an area of less than 800 square feet (about 24m2) that sells some additional goods besides selling gasoline. In this type of store, gasoline is the main product and the owners of this type of store are usually gasoline companies or distributors. The goods sold are cigarettes, drinks, snacks, and candy. Groceries and food services are completely absent. Revenue from gasoline sales accounts for about 9 parts, revenue from in-store goods accounts for only 1/10. The parking place of the store is always at the gas pump. The opening hours of this type of store vary depending on the location and the owner's priorities. Customers are mainly passersby or local people driving in to buy gasoline.
4.2 Mini Convenience Store
These types of stores, which range from 800 to 1,200 square feet, are extremely popular with gas companies and are also intended to sell gasoline. However, in places like these, the owners consider the sale of merchandise to be an important part of their revenue and profit. Groceries are available but limited, and food service consists mostly of pre-made sandwiches. There is usually no parking other than at the gas pumps, although some stores have limited parking, and hours of operation are typically 6 to 12 hours a day. The typical customers of these types of convenience stores are gasoline buyers, but there are also stores of this size in inner cities that do not sell gasoline.
4.3 Limited Selection Convenience Store
These convenience stores are increasingly appearing, ranging from 1500 to 2200 square feet (45m2 to 66m2), often paired with gas stations as a two-service location. Both gas and in-store merchandise are important parts of the profit, but they differ from mini-convenience stores in that they have a more diverse product line and also sell groceries (though still less than traditional convenience stores). They also sell food such as hot dogs and popcorn. Although gas customers are still the main customer group, the traditional convenience store-style regulars are also important to these stores. Long hours and parking are also characteristics of these stores.
4.4 Traditional Convenience Store
Most convenience stores fall into this category, with an area of 2,400 ~ 2,500 square feet (72m2 ~ 75m2) and a wide variety of merchandise including dairy, bread, snacks, beverages, tobacco, groceries, pharmaceuticals and cosmetics, confectionery, fast food, fresh and frozen meats, gasoline, some store-specific merchandise, and a variety of services. Most have 6 to 12 parking spaces and convenient pedestrian access to the store. Hours of operation are extended compared to other types of retail, with most stores open 24 hours a day. These stores are often part of convenience store chains, but some oil companies also build or own some of these stores.
4.5 Expanded Convenience Store
These stores range in size from 2,800 to 3,600 square feet (84m2~108m2) and are also growing in number. They offer more space for groceries as well as a variety of fast food and more seating for customers. Convenience stores with large areas offering a wide variety of groceries are gaining an advantage as the size of supermarkets
convenience stores are increasingly expanding to over 40,000 square feet. Some large convenience store chains are taking advantage of this, while many convenience store chains are using the space to profit from fast food. The reason is that the rapid increase in the number of small and medium-sized convenience stores (mainly from gas companies) has made it necessary for many convenience store chains to convert to fast food. The goods and services of these stores, other than the above differences, are the same as a regular convenience store. The parking lots of these stores usually have 10 to 20 car parking spaces. These stores have extended opening hours and attract not only the typical convenience store customers but also families, women and retirees.
4.6 Hyper Convenience Store
These extremely large stores arrange goods and services by section. There is a clear distinction in these stores: bread counter, restaurant area, pharmacy area... Many of these stores sell gasoline and the number of employees per shift is quite large, especially when the store has a small restaurant. Parking is spacious and customers spend more time in these stores than in other types of convenience stores. Opening hours are long and customers are as diverse as the extended convenience store type. 4
II. DEVELOPMENT OF CONVENIENCE STORE MODEL IN THE WORLD
1. The birth of convenience stores
Convenience stores are the next model that has many characteristics of many types of stores that existed in the early decades of the 20th century: fruit and vegetable stores, dairies, grocery stores, ice shops (in the pre-refrigeration era)... and also has the characteristics of supermarkets of this period.
4 http://www.nacsonline.com/NACS/Resource/IndustryResearch/what_is_a_cstore.htm
The following information is taken from the NACS research report Convenience Store Industry Marketing Strategies and Store Formats prepared by Gene Gerke of Gerke & Associates, Inc