NATIONAL REPORT — The COVID-19 pandemic has had countless effects on the convenience store industry, but one of the most significant is the way it's accelerated the implementation of technology. In particular, online ordering and delivery are quickly becoming required offerings to meet the needs of many consumers, who will expect these services to be available for use long after the pandemic ends.
"[Online] ordering and delivery is something that has really accelerated over the past year," Jessica Shelcusky, convenience store marketing specialist at Paytronix, said during a recent webinar presented by Convenience Store News and Paytronix, a provider of customer engagement solutions and loyalty programs for c-stores, other retail chains and restaurants. This is primarily due to the pandemic, although these trends already existed and have now been "put into overdrive."
To stay competitive, convenience store operators need to strategize on how they'll meet their customers' changing needs and demands in the years to come. According to industry experts, there's no time to waste when it comes to implementing digital plans.
In fact, retail consultancy King-Casey predicts that more than half of c-store brands will offer digital ordering and delivery options by the year 2023.
Currently, 60 percent of U.S. consumers order takeout at least once per week, and 40 percent of consumer spending is expected to be attributed to Generation Z in 2021. This is notable because members of Gen Z are not used to having to wait for the goods or services they want to purchase. Retailers will need to cater to the preferences of this large cohort in order to capture their business.
"They're an on-demand generation where everything is at the click of a button," Shelcusky said.
C-stores face a set of challenges unlike restaurants when building a platform for online ordering and delivery, Convenience Store News Editorial Director Don Longo noted during the webinar. This includes differences in menu layout, as well as the operational implications of selling age-restricted items such as alcohol and tobacco.
One of the tougher challenges for c-stores is translating the in-store experience to an online one. Unlike restaurants, a typical c-store sells hundreds of SKUs. Category-based, hierarchical navigation — such as having a beverages tab that contains sub-tabs for product types like soda and energy drinks, with specific products in each sub-tab — makes it easier for customers to locate the item they want.
At the same time, a bare-bones online ordering platform that only lists what items are for sale misses out on the benefits of product marketing offers and vendor funding that in-store shoppers can visually see as they browse.
Retailers should factor in the ability to offer and track redemption of such offers when they select an online ordering provider. Online platforms that use machine learning to support intelligent cross-selling are particularly beneficial.
When customers are automatically prompted to add related items to their current order, such as a beverage or side food item to go with the burger in their cart, this creates "digital aisles" that come closer to replicating the in-store shopping trip and prompt impulse purchases, according to Shelcusky.
The ability to integrate a loyalty program with online ordering is among the most important aspects of a digital platform. Being able to do so allows online customers to continue enjoying benefits of their membership. It also boosts sales; Paytronix reports seeing an 18 percent increase in online-ordering frequency when loyalty is added.
Retailers that offer beer, wine and malt beverages can also take advantage of the increased focus on digital ordering as the pandemic has prompted increased interest in buying such products at c-stores. However, retailers need to go the extra mile to remind shoppers that they will need to show their ID at pickup.
Paytronix recommends platforms offer as many as three attention-grabbing alerts during the checkout process to avoid a situation where the customer arrives without ID and blames the retailer for not making them aware it is necessary to show it.
An on-demand replay of this webinar, "Order & Delivery Best Practices: Managing Menus, Alcohol Sales and More," is available here.