Stepping Up the Pace

Striving to better serve busy consumers, convenience stores have spent the past few years slowly building and perfecting mobile ordering and delivery platforms for foodservice. But when COVID-19 hit this March, on-the-go consumers stopped going anywhere. Within a few short weeks, retailers had to shift gears to accommodate this new mindset. Working at breakneck speed, they launched and expanded programs. Initiatives involved everything from new menu options, to delivering non-foodservice offerings to markets served, to new third-party delivery partners. Some replaced existing apps with more sophisticated technologies. Others added options like curbside and contactless order pickup. “C-stores responded aggressively, rolling out programs faster than planned,” said Eric Dzwonczyk, global co-head of the restauarants, hospitality and leisure practice at AlixPartners. “7-Eleven began using Favor for delivery in Texas, while Sheetz rolled out Grubhub to almost 400 stores. Some chains expanded what could go into a mobile order, like groceries and general merchandise. Several months ago, many were just experimenting. Now, the world is fundamentally different and has challenged business.” Traditionally, c-stores test concepts for several months or more. But the pandemic’s rapid spread left no time for pilots and phased rollouts. “C-stores’ game plan has typically been, ‘let’s try this at a few locations to see what it means,’” said Tim Ridgely, Paytronix’s head of order and delivery. “But many are moving faster.” An AlixPartners study conducted during the height of the pandemic (April 20-24) found many foodservice customers were choosing limited-contact options. Drive-thru (43 percent) was most popular, followed by traditional takeout and curbside pickup (33 percent each), telephone ordering (27 percent), online ordering (25 percent) and third-party delivery (18 percent). Industry Leaders Several c-store industry leaders in both foodservice and mobile ordering/delivery are in the Northeast, an area heavily affected by the coronavirus. QuickChek Corp. operates in the particularly hard-hit states of New York and New Jersey. In April, it rushed to add curbside delivery to its app. This doubled the basket size of typical mobile orders, helping to recoup some otherwise-lost business, said Don Leech, QuickChek’s vice president of marketing and development. “Overall sales declined 50 percent. But curbside grows weekly, increasing monthly performance. We’re getting customers we didn’t have before.” QuickChek launched mobile foodservice ordering four years ago and was slowly working on curbside pickup. “In mid-March, we realized we must speed up,” Leech explained. “By April 15, every store was on curbside, with special parking lot signs.” Kitchen monitoring systems inform the staff whether orders are for in-store or curbside pickup. Since curbside customers were requesting pantry items, QuickChek added about 50 popular non-foodservice SKUs to its mobile app offering. Come July, guests can also order through an upgraded loyalty app tied to DoorDash’s delivery platform. Another regional leader in the convenience channel, Altoona, Pa.-based Sheetz Inc., now offers mobile ordering thorough its own app and ordering/delivery through Grubhub. Stores feature drive-thrus and in-store pickup areas. Meanwhile, competitor Wawa Inc. now delivers to 95 percent of its markets via DoorDash, Uber Eats and Grubhub. Wawa is also expanding curbside pickup. On April 30, Pittsburgh-based GetGo, the convenience store division of Giant Eagle Inc., launched mobile ordering/delivery with DoorDash at 86 of its 270 locations. “We’d been working with DoorDash in a selective pilot,” said spokesperson Jannah Jablonowski. “But consumer habits were changing rapidly. Fewer people came into the stores. COVID-19 forced us to be aggressive about streamlining the experience. It was a catalyst.” Aside from DoorDash, GetGo orders can be placed through parent company Giant Eagle’s app. The two-year-old app processes payments as well. Customers can choose pickup locations and times. GetGo stores have dedicated pickup areas and new curbside service. “We wanted to step it up with contactless pickup,” said Jablonowski. 7-Eleven Inc., with almost 12,000 North American stores coast to coast, launched its proprietary 7NOW ordering/delivery app three years ago. It now serves 400 cities. Available items include 3,000-plus foodservice, grocery, general merchandise and alcoholic beverage items. This May, 7-Eleven added the Ready to Bake at-home line of refrigerated pizzas, chicken tenders, wings and taquitos to its ordering platform. It also partnered with Postmates, DoorDash and Google to expand mobile ordering/delivery to 90 percent of participating U.S. locations. “When we launched 7NOW, customers were time starved,” said Chris Tanco, chief operating officer. “[But] the definition of convenience has rapidly evolved during this pandemic. Extraordinary times have accelerated efforts. Customers need delivery to stay safe and get products. We’ve seen an uptick in demand.” Additionally, 7-Eleven’s Stripes stores teamed up with Favor and Postmates this past spring to offer delivery from 380 Stripes locations, as well as Stripes’ Laredo Taco Co. restaurants in several markets. These partnerships — along with the 7NOW app — also serve 7-Eleven’s four new Evolution Store test locations, which have restaurants. “We’re continuing to explore and expand delivery options for restaurant concepts to ensure customers can get what they want from the comfort of home,” said Tanco. Beyond the Northeast While initially less affected by the coronavirus, large regional c-store chains outside the Northeast were equally aggressive about growing mobile ordering/delivery services. In April, Iowa-based Casey’s General Stores Inc. expanded its DoorDash relationship to include 579 locations across 16 states, and made dozens of non-foodservice items available for delivery. Casey’s also employs its own drivers and delivers from 1,000-plus stores. QuikTrip Corp. expanded mobile ordering via its app for its 800-plus stores. The March initiative followed successful testing in QuikTrip’s hometown of Tulsa, Okla. Groceries and general merchandise were added to the offer, and it introduced On-Lot Pickup. Spokesperson Mike Thornbrugh said QuikTrip wants “to make shopping more seamless and convenient. We’ve been working on this [app] for several months.” While it is early to gauge results, he noted that “most orders have been for full-service kitchen items.” (QuikTrip first launched a mobile foodservice ordering app for select locations in 2017.) Experts applaud these retailers’ quick reactions to changing shopper demands. Still, AlixPartners’ April study found that just 7 percent of consumers prefer c-stores for off-premise ordering during the pandemic. This puts c-stores at the bottom of the list. The top choices were fast food (52 percent), pizza (51 percent) and casual chains (40 percent). Ben Jakes, a principal at Kearney’s consumer practice, said c-stores with mobile ordering/delivery are still a small part of the overall c-store pie. Winners have both successful technologies and strong foodservice brands. “You must be known for something to win in digital ordering. Casey’s has pizza, Wawa has sandwiches, and 7-Eleven is known for Slurpees and snacks. They emphasized foodservice pre-COVID. But they represent about 10,000 stores, a small piece of the c-store industry. QSRs are more than double the penetration,” Jakes noted. For convenience stores without strong foodservice brands, physical and mobile customers do not behave alike. Those who order food at physical c-stores are often drawn by tangible convenience. “Most people buy c-store foodservice because it’s physically convenient when they’re getting gas or it’s down the block,” said Gray Taylor, executive director of Conexxus, a nonprofit, member-driven technology organization dedicated to the convenience store and retail fueling market. Proprietary mobile apps can help c-stores attract mobile ordering/delivery customers and build brands. They communicate directly with shoppers, allowing retailers to lure and retain customers with special offers, loyalty programs and promotions. Additionally, they do not highlight other foodservice brands, as opposed to third-party apps that do. “Third-party apps are a great acquisition channel,” said Paytronix’s Ridgely. “But when you open Uber Eats, there’s other options. With first-party apps, you own guest relationships, data and transaction history, and can include promotions and loyalty programs. The big hurdle is getting guests to download them. Offering a full digital experience is super important.” Many c-stores are not there yet. While leading chains have stepped up timetables and added mobile ordering/delivery apps and amenities, others continue testing technologies. “When they say they’re doing it, many people are kicking tires and experimenting,” said Taylor. “Some haven’t worked out the economics. Many things must function well for this to work. It’s no small job. And many convenience stores haven’t justified foodservice enough for it to stand up online.” CSN

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