Mobile Ordering, Delivery & the Next Stage of Foodservice Growth
NATIONAL REPORT — The ability to order food via app or website varies by convenience store retailer, but trends currently shaping the industry indicate that it's important for operators to, at least, consider offering mobile ordering and delivery, according to a recent webinar hosted by Convenience Store News.
Jessica Shelcusky, presenter and convenience store marketing specialist for Paytronix, kicked off the webinar by acknowledging the rapidly changing state of the industry due to COVID-19. She suggested a number of possible responses, such as:
- Reviewing and potentially deactivating campaigns that encourage on-premise dining;
- Maintaining birthday and recurring programs, but adjusting the messaging to acknowledge the reward and offer a delayed redemption;
- Letting customers know how retailers are maintaining the health and safety of their employees; and
- Clearly laying out procedures for how people can place online orders for pickup, as well as setting expectations around timing.
In general, delivery is growing steadily and shows no signs of slowing down, Shelcusky noted. Consumers' rapid adoption of delivery can cause challenges such as operational and food quality issues, as well as accessibility issues.
There are multiple third-party partners that can help retailers make the move to delivery, but they have their own competitive strategies. "They're all in a race to become the dominant provider in the United States," she said.
WHO IS THE MOBILE ORDER CUSTOMER?
Regardless of the difficulties, mobile ordering and delivery represent the next wave of growth in the c-store industry. Apps that tie these services in with mobile payment and loyalty programs will lead to greater success, as they let consumers earn reward points and enjoy special offers while retailers collect valuable data.
Generation Z is the demographic group driving this growth. Currently aged nine to 22, this cohort is the most diverse generation in history and will make up 40 percent of all U.S. consumers this year. More than five in 10 members of Gen Z (55 percent) use their smartphone five or more hours each day; 62 percent of Gen Z find themselves attracted to brands viewed as "fun" or "cool"; and 65 percent say they want real value for their money.
However, it is more difficult to catch the eye of these consumers. Members of Gen Z have an average attention span of eight seconds, compared to 12 seconds for millennials. Visuals may be a key part of doing so, as this generation of digital natives doesn't know a world without technology and is more image/video driven than text driven.
Gen Z sees the world as a smaller place; they are aware of the many different cultures out there and want to experience them. The most accessible way to do so is through the food they purchase, and technology helps connect them to types of food they might not otherwise encounter on their own.
This generation also cares about social justice and wants to know that brands are doing right by both their customers and employees. Transparency is important.
OPTIONS & LOGISTICS
Fifty-two percent of Generation Z and millennials say they would buy from c-stores more if delivery were an option. The more available that delivery is, the more that younger shoppers will take advantage of it.
So, what are the best options for delivery?
Third-party delivery, such as a 7-Eleven Inc.'s partnership with DoorDash, has some notable advantages, such as:
- Exposure: Third-party delivery partners can offer smaller retail brands equal exposure to some of the most well-known brands in the world, and make people aware that larger brands are now available for delivery.
- Convenience: C-stores don't have to handle their own delivery logistics.
- Expenses: C-store chains don't have to maintain their own delivery fleet.
However, 44 percent of customers who have a negative experience with delivery blame the brand; just 25 percent blame the third-party delivery company.
No matter what delivery format a convenience store retailer chooses, they have to consider the entire order-and-delivery ecosystem, which starts at the point of order and goes all the way to the customer handoff, when the food needs to arrive on time, looking appetizing, and at the right temperature.
Other important considerations include what kind of payment to offer for mobile orders. For example, some operators are willing to accept cash at pickup, while others don't want to deal with on-premise payment for off-premise orders. Order throttling, or the maximum number of orders that can be processed at one time, is another key metric. C-store operators may additionally want to create separate lines for in-store purchases and mobile order pickups.
Overall, operators should be aware that the higher the number of different providers for different elements of guest engagement — such as coupons, gift card redemption, online ordering and loyalty — the higher the risk for an area of friction.
"You really want to be seamlessly integrated to have the best experience for your customers," Shelcusky said.
The approach to delivery will vary by operator, but all businesses should keep the four Ps in mind as they decide what works for them: product, price, place and promotion.
Ultimately, a great deal of focus should be on the user experience. Consumers should be able to order from wherever they are, and be able to access the mobile ordering system through whatever format they choose.
"Make sure your mobile web experience is intuitive and easy to use," Shelcusky advised, noting that this will increase the chance that a new customer will return a second time, and then a third time, making mobile ordering and delivery a true value-adding program.
An on-demand replay of this webinar, "Mobile Ordering: The Digitization of Dining," is available here.