7-Elevens could be destined to undergo a konbinification

Discussion
Photo: Getty Images/winhorse
Jan 14, 2021
Matthew Stern

When someone in the U.S. mentions the name 7-Eleven, Slurpees and rollers stocked with taquitos come to mind. However in Japan, the home of the chain’s parent company, 7-Eleven has long offered a higher-end customer experience — one that might be coming to the U.S., thanks in part to the novel coronavirus pandemic.

The Japanese konbini (a term used to describe the country’s high-end, service-oriented convenience store) plays a more comprehensive role in daily life than the U.S. convenience store, a recent article on Medium by journalist Adam Chandler explains. There, going beyond traditional c-store fare, customers can manage pharmacy needs and buy clothing basics, use financial services and Wi-Fi and even book train tickets.

Mr. Chandler points to stateside changes, like the rollout of an enhanced inventory monitoring system to improve stock position, an increased footprint, the implementation of Amazon Lockers, in-store bill payment solutions and app-based delivery, as the slow but sure start of U.S. 7-Elevens transforming into konbinis. Products also play a role in the chain becoming more konbini-like with the pandemic-driven introduction of bake-at-home versions of familiar offerings alongside ongoing rollouts of healthier food choices.

7-Eleven has been trying to figure out how to better meet the needs of a changing U.S. customer base for some time. In 2019, the chain launched its first 7-Eleven Evolution store concept, a location meant to be a testing ground for new innovations. Early in 2020, it announced that it would be expanding the concept to two other cities.

By the end of 2020, the Evolution store count had increased to five nationwide, according to CSP Daily News. 7-Eleven expects to open more Evolution stores in 2021.

Whether the slowly-growing “evolved” concept will eventually become the dominant one or remain a side concept, 7-Eleven will have plenty of potential locations in which to place them. The company just completed an acquisition of Speedway which, when completed, will give the convenience store brand an additional 3,900 stores and gas stations spread out over 35 U.S. states.

In 2018, 7-Eleven acquired 1,030 stores, bumping the chain’s store count in the U.S. and Canada up to 9,700.

DISCUSSION QUESTIONS: Do you think the konbini-style, service-oriented, higher-end convenience store is the future for 7-Eleven in the U.S.? What do you think franchisees will do, given their expressed difficulties in profitably adapting to some of the new higher-end demands?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"With almost 10,000 stores in the U.S., there is an opportunity to offer several different formats relevant to the local consumer tastes, lifestyle, and needs."
"I absolutely think there is an opportunity for 7-Eleven to open a higher-end concept in the United States."
"7-Eleven has an opportunity to change the perception of convenience stores and elevate the brand image."

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18 Comments on "7-Elevens could be destined to undergo a konbinification"


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David Naumann
BrainTrust

Convenience stores have prospered during the pandemic as consumers have focused on limiting their travel and convenience has been a higher priority. Several convenience chains have elevated the level of services and the quality of their prepared foods over the past 10 years, but there are many that still look like the stores we knew 20 years ago. 7-Eleven has an opportunity to change the perception of convenience stores and elevate the brand image. There will be issues with convincing franchisees to make additional investments, especially those that are struggling.

storewanderer
Guest
2 months 30 days ago

7-Eleven controls the majority of the real estate on these sites. 7-Eleven also owns all of the equipment in these franchise stores. The franchisees just run the stores, literally, using 7-Eleven’s real estate, fixtures, and systems. If there are additional investments to be made, that is on 7-Eleven Corporation to do. Not the franchisee.

David Naumann
BrainTrust

Thanks for clarifying the investment model for 7-Eleven. That makes compliance much easier for 7-Eleven.

Nikki Baird
BrainTrust

There are two parts to this question, really. One is, will U.S. consumers accept 7-Eleven as a “premium” brand? I think there is going to have to be a LOT of investment in branding in order to make that repositioning successful, either that or they should plan a slow rollout measured in decades, not years or months.

Two, and I would say this runs counter to the brand perception issue, 7-Eleven needs to think about the long-range future of what drives a consumer to a c-store, and what they expect to do once they get there, and this konbini style concept seems to support that well. If we move hard towards electric vehicles in the next decade or two, the c-store that is designed more as a way station is going to have a lot more going for it. Even the fastest battery charge takes much longer than it takes to fill a tank of gas, and having a service-orientation (rather than grab and go) will serve them well.

Jeff Sward
BrainTrust

I have to admit that I had not heard the term “konbini” before reading this article. But having said that, the underlying logic sure makes sense. It would be great if the plethora of convenience stores across the nation served a higher purpose beyond a distribution point for soda, chips and candy. (Or did I just reveal my personal shopping list?) Convenience, time-saving, and one-stop execution are drivers of how shoppers think about their daily to-do list. Sounds like c-stores can check off a larger portion of that list than I had previously been thinking.

Gene Detroyer
BrainTrust

…after the soda, chips and candy. And don’t forget the cigarettes.

Kevin Graff
BrainTrust
3 months 26 minutes ago

In short, let’s hope that 7-Eleven goes “konbini-style.” The typical convenience store today is a relic of the past. Yes there are outliers who have upped their game along the way. But most lack any innovation or transformation. It’s time to change the way the game is played for everyone — including convenience stores.

Gene Detroyer
BrainTrust

7-Eleven has been in Japan for over 70 years. Their offerings have not morphed from Slurpees to what they offer today. They started with what they are today and are part of the Japanese retail fabric.

In the U.S. 7-Eleven is the Slurpee place. It is part of the brand.

The article mentions pharmacy needs. Already, the biggest competitors for convenience stores are the pharmacy chains. Maybe I will need a quick pair of gloves because it is cold out and I forgot mine. Or it is raining and I will spend $5 on an umbrella? Except for cigarettes (and Slurpees), I cannot image convenience stores being a shopping destination for anything, ever — no matter what the offering is or if there is an upgrade in service.

Georganne Bender
BrainTrust

7-Eleven created the world’s first soda fountain and the first to-go coffee so why can’t it reinvent – or konbinify – its stores? The Japanese version of the store sounds very cool.

I typically drive by 7-Eleven unless we are on a road trip and need to stock up on snacks but that might be a mistake. The Medium article outlined the foods and services 7-Eleven has added in recent years and during the pandemic. It’s impressive and I am all for reinvention, just leave the Slurpee machine alone.

Bob Amster
BrainTrust

I lean towards converting some locations to the konbini-style store and calling it something else – like 7+ – so the company can keep the 7-Eleven brand where it wants continue to operate as it does now, and introduce the higher-end brand where the traffic and demographics merit the upgrade. Raise the flag and see who salutes it. If it does not work, close it or revert.

Brian Cluster
BrainTrust

With almost 10,000 stores in the U.S., there is an opportunity to offer several different formats relevant to the local consumer tastes, lifestyle, and needs. Convenience stores in my experience can be some of the most uninspiring retail environments and, depending on the community, there is room to offer a premium experience, improved meal solutions, and offer better service. Expanding the scope of the Evolution test stores will provide a more comprehensive set of insights across different markets/consumer groups and will help 7-Eleven make the right decisions in merchandising and visual presentation for these new konbini-style stores.

Rich Kizer
BrainTrust

Interesting. One thing that may be a major challenge: the required additional investments and ongoing investments as they change, as well as much more additional training of staff. One thing I learned in my franchise past: franchisees get nervous very quickly.

Ryan Mathews
BrainTrust

I actually think a konbini-style format might work but as a second banner (e.g., 7-Eleven Plus). By setting up a second banner the chain could quickly advance any brand image it wants without necessarily introducing significant erosion to the Slurpee and cigarettes crowd. This would also help mitigate the franchisee problem. Franchisees who wanted to invest in the new format could do so and the rest could operate on a business-as-usual basis. It would require some clever marketing, but I think a dual-format approach could work.

Doug Garnett
BrainTrust

There is clearly room for U.S. convenience to grasp their increased importance for shopping (as opposed to gasoline) and develop specific services which consumers value within a convenience store. Japan, however, has a far different relationship between geography (small) and store — making the convenience format one we should expect to be different in Japan.

It’s good that 7-Eleven is experimenting and I wish them well identifying important added products and services. That said, don’t mess with the Slurpee!

Shep Hyken
BrainTrust

I like that 7-Eleven is innovating. If you keep doing what you’ve always done, you’ll get passed up by competition. What does the convenience store of the future look like? Maybe 7-Eleven will show us!

storewanderer
Guest
2 months 30 days ago
7-Eleven is, as far as the customer experience goes, the worst c-store operator in the US. They have some of the oldest stores, smallest stores, and the majority of their US stores are run by franchisees and the store operations vary widely from one location to the next. These stores are franchised out for a reason: they don’t do enough volume or profit for the corporate to want to operate based on the corporate model (which uses a lot of labor) so they let a franchisee and their family figure out how to run them (long shifts, family members working, etc.). Some of these 7-Elevens are so low volume the corporation pays the franchisee a subsidy to run them. Between the franchise model and the old stores, it is pretty terrible. Also their gas pricing tends to be very high; they seem to price like they are branded fuel (they aren’t). Yeah, they have some concept stores that look great, food service concepts like Laredo Taco they acquired that they are so far maintaining and… Read more »
Gary Sankary
BrainTrust

I absolutely think there is an opportunity for 7-Eleven to open a higher-end concept in the United States. Case in point: years ago no one would have thought a chain of convenience stores that only sells high-end coffee would really work….

There has been a trend in the US Housing Market for a while now for more community focused, walkable neighborhoods. The demographics for these neighborhoods tend to index higher in incomes. These are expensive places to live. Because of that, a neighborhood store with high-turn convenience items makes sense. If they can add some high-demand services, maybe offerings for fresh food and more healthy choices, I honestly think this would be a hit.

The key in this segment is making sure to continue ongoing investments in existing locations to keep them clean, fresh and relevant.

Rachelle King
BrainTrust

As consumer demand evolves retailers must evolve too. Expanding product offerings is a good way to go for 7-Eleven. If done strategically, it could serve to increase brand relevance in communities that already consider the local store their primary shopping destination. It could prove win-win for everyone; stores may see larger baskets while consumers may get more value out of a single trip.

A strategic roll-out will be key to ensuring they are placing the right upgrades and expansions in the right communities. Many of the communities they serve could benefit from pharmacy and financial services as well as healthier product offerings at affordable prices. Speedway locations may do well with clothing basic. If done strategically and with focus on increasing relevance to the communities they serve then franchisees should see profitable gains too.

wpDiscuz
Braintrust
"With almost 10,000 stores in the U.S., there is an opportunity to offer several different formats relevant to the local consumer tastes, lifestyle, and needs."
"I absolutely think there is an opportunity for 7-Eleven to open a higher-end concept in the United States."
"7-Eleven has an opportunity to change the perception of convenience stores and elevate the brand image."

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