National

The corner convenience store is being disrupted, driven by the increasingly familiar consumer desires for technology-driven convenience and healthier products. 

Why it matters: Global, national and even regional brands need to plan accordingly as the next generation of convenience stores starts to gain traction with millennial consumers and investors. This could prove yet another example of technology hollowing out working-class jobs, as convenience store clerks go the way of gas station attendants.

What's new: Last January, Amazon opened Amazon Go, its high-tech version of a convenience store in Seattle, and has now announced its expansion to San Francisco and Chicago.

The impact: Grocery store stocks plummeted following Amazon's acquisition of Whole Foods, and convenience stores may be next. Expect increased convenience store competition on two fronts:

Technology-driven convenience: The use of AI, machine learning, smartphone apps and scanning technologies will eliminate sales clerks and checkout lines. Consumers will be able to walk in, grab their items, and walk out, their credit card charged automatically as they exit. 

"Artisanal’" selection: The shelves of next-wave convenience stores are often stocked with local, niche brands accompanied by the quality — and prices — you’d expect at more upscale stores. Foxtrot has been a leader here, but Amazon is trying to catch up.

Yes, but: The Japanese-owned 7-Eleven has an impressive footprint with 65,000 locations around the globe; even Amazon would have a difficult time catching up. And while more consumers are seeking out healthier foods, it will continue to be gas, alcohol, cigarettes and accessible price points that drive the category.

Still, it would be wise for 7-Eleven and others like it to plan so they aren’t playing catch-up.

Tige Savage is a managing partner at Revolution Ventures.


Next-wave convenience stores to upend traditional brands and jobs

Convenience store clerks may go the way of gas station attendants.

A shopper walks out the the Amazon Go store, on January 22, 2018 in Seattle, Washington. After more than a year in beta Amazon opened the cashier-less store to the public. 

A shopper walks out the the Amazon Go store on January 22, 2018, in Seattle, Washington. Photo: Stephen Brashear via Getty Images

Business

Convenience stores

Expert Voices

World

The corner convenience store is being disrupted, driven by the increasingly familiar consumer desires for technology-driven convenience and healthier products. Why it matters: Global, national and even regional brands need to plan accordingly as the next generation of convenience stores starts to gain traction with millennial consumers and investors. This could prove yet another example of technology hollowing out working-class jobs, as convenience store clerks go the way of gas station attendants.

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Amazon's move to provide shipping services to its business customers extends a trend at the e-commerce giant of subsidizing its operations by converting a cost center to a revenue source. For the first time, it puts Amazon in direct competition with key logistics providers FedEx, UPS and the U.S. Postal Service. 

Why it Matters: Amazon has a history of disrupting incumbents’ billion-dollar categories (think: Amazon Web Services). Expect Delivery-as-a-Service (DAAS) to enter the e-commerce lexicon and shipping expenses to reduce their drain on the company’s earnings.

Amazon can now capture margin shared with shipping partners (increasing profitability), lower costs through scale (extending its advantage over e-commerce competitors), and further entrench itself as a critical supply chain partner for other online and offline retailers.

What's next:  Logistics incumbents will want to oppose the move as anti-competitive, but consumers and businesses will benefit from lower costs — rather than be subjected to monopoly prices — so there's little reason to expect anti-trust traction. 

The big picture: Amazon provides a master class on building a virtuous cycle, continuing to lower its costs as more third parties ship with Amazon. Those savings could then be reinvested into lower prices for Amazon's consumers, ultimately extending its reach over the competitors who use its DAAS service.

Tige Savage is managing partner at Revolution Ventures.

What Amazon’s expansion into shipping means for FedEx and UPS

The online shopping giant will compete with the logistics companies it's depended on.

An Amazon-branded Boeing 767 freighter, nicknamed Amazon One. Photo: Stephen Brashear / Getty Images

Expert voices

Future

Amazon&#x27;s <a class="gtmContentClick" data-vars-link-text="move to provide shipping services" data-vars-click-url="https://www.axios.com/amazon-shipping-service-ups-fedex-8599bff5-d749-48fe-8ce1-47f4b198c545.html" data-vars-content-id="7a466cda-e1c3-47f9-985b-527ff873b6a5" data-vars-headline="What Amazon’s expansion into shipping means for FedEx and UPS" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/amazon-shipping-service-ups-fedex-8599bff5-d749-48fe-8ce1-47f4b198c545.html" target="_self">move to provide shipping services</a> to its business customers extends a trend at the e-commerce giant of subsidizing its operations by converting a cost center to a revenue source. For the first time, it puts Amazon in direct competition with key logistics providers FedEx, UPS and the U.S. Postal Service. Why it Matters: Amazon has a history of disrupting incumbents’ billion-dollar categories (think: Amazon Web Services). Expect Delivery-as-a-Service (DAAS) to enter the e-commerce lexicon and shipping expenses to reduce their drain on the company’s earnings.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Last month, Sears announced its plan to close another 72 stores and identified 100 as unprofitable, after its 26th consecutive quarter with diminishing sales. Sears and similar retailers have suffered largely because of changing consumer behavior and market dominance of Amazon, which was responsible for 44% of all U.S. e-commerce sales last year. 

But, but, but: While sales have declined the past six years for Sears, brick-and-mortar sales overall have increased each of the past four, driven by retailers who blend online and offline commerce and deliver memorable experiences. Companies such as Amazon and Apple built on consumer-first retail DNA, while other leaders such as Walmart and Target have acquired that DNA through aggressive acquisitions of next-generation brands such as Jet.com, Bonobos and Shipt.

Flashback: Never forget Blockbuster, the once-leading but now-defunct movie rental business. Blockbuster didn’t embrace digital change despite an opportunity in 2005 to purchase Netflix for $50 million, doubling down instead on the brick-and-mortar model by acquiring Hollywood Video. Today, Blockbuster is gone and Netflix is bigger than Disney, Comcast and Fox. 

Lessons learned: Retailers that want to satisfy tomorrow’s consumer demand have to embrace trends, invest aggressively and acquire smaller, well-positioned companies, brands and management teams. Sears could have leveraged its retail footprint, scale, supply chain, iconic Craftsman and Kenmore brands and distribution advantages in concert with startup strategy to transition its business, but missed the opportunity.

The big picture: Successful retailers meet consumers where they want to be, providing value, variety and minimal purchase friction. Those that hold on to dated brands, distribution channels, experiences and value propositions will likely be left behind.

Tige Savage is a managing partner at Revolution Ventures.

How brick-and-mortar retailers can adapt to the age of e-commerce

Retailers who blend online and offline commerce have seen a rise in sales.

A Bonobos 'guideshop' stands in lower Manhattan on April 18, 2017 in New York City. 

A Bonobos in lower Manhattan on April 18, 2017, in New York City. The high-end men's clothing retailer is in talks with Walmart for an approximately $300-million sale. Photo: Spencer Platt via Getty Images

Future of Retail

Last month, Sears announced its plan to <a class="gtmContentClick" data-vars-link-text="close another 72 stores and identified 100 as unprofitable" data-vars-click-url="https://www.axios.com/sears-holdings-closures-retail-amazon-kmart-9136d9c0-d066-4aa6-b5ff-45869ccd278a.html" data-vars-content-id="cd690317-504a-40f8-b139-c99e798cf144" data-vars-headline="How brick-and-mortar retailers can adapt to the age of e-commerce" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/sears-holdings-closures-retail-amazon-kmart-9136d9c0-d066-4aa6-b5ff-45869ccd278a.html" target="_self">close another 72 stores and identified 100 as unprofitable</a>, after its 26th consecutive quarter with diminishing sales. Sears and similar retailers have suffered largely because of changing consumer behavior and market dominance of Amazon, which was responsible for 44% of all U.S. e-commerce sales last year. But, but, but: While sales have declined the past six years for Sears, brick-and-mortar sales overall have increased each of the past four, driven by retailers who blend online and offline commerce and deliver memorable experiences. Companies such as Amazon and Apple built on consumer-first retail DNA, while other leaders such as Walmart and Target have acquired that DNA through aggressive acquisitions of next-generation brands such as <a class="gtmContentClick" data-vars-link-text="Jet.com" data-vars-click-url="http://jet.com/" data-vars-content-id="cd690317-504a-40f8-b139-c99e798cf144" data-vars-headline="How brick-and-mortar retailers can adapt to the age of e-commerce" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://jet.com/" target="_blank">Jet.com</a>, Bonobos and Shipt.

Tige Savage

Stories

How brick-and-mortar retailers can adapt to the age of e-commerce

Next-wave convenience stores to upend traditional brands and jobs

What Amazon’s expansion into shipping means for FedEx and UPS