Managing the Future of C-stores: Mobile Ordering & Delivery
Michelle Tempesta, Paytronix
Even before the pandemic hit, a major change faced the convenience store industry: mobile ordering and delivery. The need to offer an alternative to in-store shopping has only increased as the pandemic has taken hold and left people sheltering in their homes. What started as purely an area of increased revenue and expansion has become a lifeline to keep stores open.
As we entered 2020, several brands were already delivering convenience goods to the home. One of the most well-known is venture-backed goPuff, which launched by offering ways for consumers to get bags of chips without leaving their couch. Now, it finds itself delivering everyday needs like over-the-counter medications, as well as pantry staples like pasta, bread and canned goods. Meanwhile, industry giant 7-Eleven has been working with DoorDash for years — at least in some states — to offer delivery of just about everything.
When it comes to mobile ordering and delivery, c-stores should keep three objectives in mind:
Plan properly. Mobile ordering and delivery is an aspect of the business model that can bring great advantages. However, it’s important to think through the brand’s goals before simply jumping in.
Understand third parties. Delivery services like DoorDash, Uber Eats and the rest can add value, but they also bring complications. Determine where they fit into your overall model.
Build a great customer experience. Everything should come back to the brand and how customers perceive it, from the mobile frontend to the product to the delivery packaging. Consider the true brand value and how to communicate that even when the customer experience is external to the store.
Offering delivery isn’t as easy as just inviting in a third-party operator to pick up some goods and drop them off at a customer’s home. It’s about creating a strategic plan for owning the entire consumer experience, from the moment of the initial phone interaction to the time that products are delivered.
Picking the Right Partners
The order-and-delivery market is perhaps most mature in the restaurant industry, where consumers spent $10.2 billion on delivery services in 2018. That figure reflects a 42 percent increase from the previous year.
Some restaurants worked almost exclusively with third parties like DoorDash, Postmates, Uber Eats and Grubhub. These platform-to-consumer companies are in a race to be the dominant provider in the United States, and the “Big Four” constitute more than 75 percent of the market.
Still, the future looks turbulent as they compete for market share under the pressure of producing profitability. The challenge for convenience stores is predicting which ordering partners will be the best provider not only today, but also for the long term.
The aggregators represent both an opportunity and a challenge. The aggregators’ consumer-facing model means they have the mobile engagement for attracting new customers, many of whom may never have come into a physical location. The downside, however, is that the third parties can own the full customer experience, from the mobile frontend to the delivery endpoint, even as they attach your brand to the ordering process.
Restaurants offer a cautionary tale. No matter how efficiently the order-and-delivery system may function, mistakes happen. According to the Takeout, Delivery & Catering Study conducted by Off-Premise Insights, 82 percent of customers blame the restaurant and not the driver or the ordering app.
A better course of action is to implement a long-term strategy that can take advantage of the third-party delivery providers as both a source of new customers and a method of delivery, while also creating a way to earn the long-term brand loyalty of those new customers.
One proven method is to develop a custom mobile app that pushes through offers and tracks loyalty members during remote ordering. This enables a brand to offer deals, discounts and sales directly to the mobile audience the way it’s done in the store. The truth is customers who don’t enter the store never see the signs and deals that are integral to today’s physical retail model.
A mobile app also enables a retailer to sell brand-specific products like specialty food and drink offerings. This, in turn, creates another set of issues around brand experience. If a brand offers custom sandwiches, then the app must be developed with the right options in place. However, that also means ensuring the app can be easily updated when an item is unavailable or if there’s a limit on a specific product. It’s an interaction that happens naturally on-premises, but one that requires easy-to-use technology to alert the consumer before the delivery person arrives.
Retail will likely look a lot different when this crisis is over, but we can be assured that mobile ordering and delivery will be a key component of any business model. Having a carefully considered plan, as well as choosing the right technology partner, will greatly increase the chances of success.
Michelle Tempesta is head of marketing at Paytronix. Listening to the market, making recommendations for scalable product requirements, and developing useful content are the services her group brings to Paytronix users.
Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.