Micro Market Highlights from 2020

December 15, 2020

The COVID-19 pandemic overwhelmed the news cycle and impacted every industry in the United States and around the world in 2020. Despite the challenging year for micro market operators, they’ve learned how to adapt-and are well-equipped to apply these lessons in the year ahead.

Here’s a recap of the biggest news that impacted micro markets in 2020:

1. COVID-19 accelerates consumer demand for contactless, cashless payments and unattended retail.

Micro market operators were ahead of the curve on this one, as most operators already offered cashless payments to their customers; many also were already supporting contactless options. For those who needed to make the upgrade, technology suppliers were quick to assist operators in creating a safe environment for micro market customers to purchase food and beverages.

A study conducted by USA Technologies revealed that the rate of contactless payments rose 51% from January to July 2020. This evolution opens the door for operators to enroll micro market customers in loyalty programs and send curated promotions to influence purchasing behavior. When the first Amazon Go store opened in 2018, the concept of cashierless checkout was still novel. Today, there are 26 Go locations in Chicago, New York, San Francisco and Seattle. This year, Amazon moved further into the unattended retail space, piloting Amazon Go Grocery in the Seattle area and Amazon Fresh in Woodland Hills, California, with plans to expand and bring unattended retail to a wider consumer base. Quick service restaurants, grocery stores and convenience stores were among the many retail businesses embracing touch-free payments this year, pushing the concept further into mainstream acceptance.

For operators looking to diversify their accounts—and potentially expand beyond the break room—the growing demand for contactless payments and unattended retail presents an opportunity for growth in 2021.

2. Convenience service competitors upped their game.

With lockdowns and safer-at-home measures enforced across the U.S., many employers allowed employees to work from home in 2020. This displaced workforce required micro market operators to quickly adapt to meet the changing needs of consumers.

Operators tried different strategies, including launching snack delivery programs for employees working from home; upgrading and leveraging technology to gain insight into customers; and sourcing personal protective equipment (PPE) for their employees and customers. Savvy operators went the extra mile with customer service for their accounts, aware that their competitors were finding new ways to encroach into their space.

Restaurants expanded delivery and pickup options, hoping to recoup lost revenue from restrictions on indoor dining. Starbucks, for example, focused on contactless to-go and delivery ordering early in the pandemic, while independent and chain restaurants partnered with Uber Eats, DoorDash, Grubhub, and other delivery services, making meal delivery to workplaces and home offices more convenient. Convenience stores got in the delivery game and started offering contactless pickup and order-ahead services for customers. 7-Eleven is among the c-stores that expanded better-for-you product selection featuring emerging food and beverage brands. Ghost kitchens, or professional facilities set up for food preparation exclusively for delivery, enjoyed substantial growth this year. Uber Co-Founder Travis Kalanick spent more than $130 billion acquiring 40 properties in multiple cities for CloudKitchens, his ghost kitchens startup. And US Foods, Kroger and Chipotle are among the major brands now playing in this space, competing with the convenient meal solutions offered through micro markets. Several brands established or expanded direct-to-consumer offerings to serve customers wary of shopping in-store. Impossible Foods, PepsiCo and America’s Best Beverage all launched e-commerce sites to enable direct-to-consumer sales. Micro market operators need to be flexible and creative to respond to these threats not only during a pandemic, but also into 2021 and beyond.

  1. Acquisitions were mostly put on hold, but partnerships are thriving. The convenience services industry typically sees a healthy number of mergers and acquisitions in any given year. But 2020 was an exception.

Earlier in the year, industry experts advised against selling an operation during the economic downturn, noting that operators would get more bang for their buck once COVID-19 subsides. Now, nearing the end of 2020, some industry consultants are seeing the tide start to turn. But it’s still best for operators to proceed with caution. While major business transactions took a hit in 2020, many companies deepened relationships in the industry to make it through the pandemic. Michigan-based All Star Services partnered with LightSpeed Automation to be the first U.S. operator to offer LightSpeed’s home delivery program, giving customers a streamlined solution to provide employees the same snacks they can enjoy in the office while working from home. Cleveland-based D&S Vending teamed up with CLEANLIFE to distribute PPE to accounts, protecting both operators’ employees and their customers’ employees. Fixturelite, a supplier of micro market retail displays, seating, and design features, deepened collaborative partnerships with several industry businesses—Translucent, 365 Retail Markets and Minus Forty among them—to help operators design micro markets that serve the unique needs of each client, which is especially important in light of COVID-19. Such arrangements account for social distancing and touchless solutions; better still, the planning can be done virtually and safely.

Looking for other ideas that can create an exceptional experience for your micro market customers? Read more here.

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