Subscription Services Emerge as Next Evolution of Loyalty

NATIONAL REPORT — For several years, convenience store retailers have been working on their loyalty game, building up a fan base through special in-store offers and fuel discounts. By now, following the evolution from loyalty program punch cards to swipe cards to mobile apps, many c-store retailers have it down pat — leading them to ask: What's next?

For some, it is a continuation of offers and discounts with the addition of getting customers to pay for a loyalty program, even if it's just a nominal fee.

In early 2022, Irving, Texas-based 7-Eleven Inc. introduced the 7NOW Gold Pass, a subscription delivery service. For $5.95 a month, customers can access the delivery service and have the delivery fees waived on all orders. The 7NOW Gold Pass pays for itself in about three delivery orders per month, according to 7-Eleven.

Subscribers with a basket subtotaling at least $10 receive other perks, including the option to select a free product. Additionally, 7Rewards loyalty members can unlock double the rewards in the 7-Eleven mobile app when they order delivery using the 7NOW Gold Pass.

"Our 7NOW Gold Pass subscription delivery service brings convenience to a whole new level, giving our customers the ability to order what they want, when they want it — and now as often as they want without an added delivery fee," said Raghu Mahadevan, 7-Eleven's senior vice president and chief digital officer.

7-Eleven launched delivery in 2018 via 7NOW, and the introduction of new offerings — like the 7NOW Gold Pass subscription delivery service — is part of a companywide commitment to bring value to the customer experience both in and out of the store.

A Familiar Connection

Subscription programs are growing in the convenience channel, and it makes sense when you consider today's consumers are already very familiar with the concept. From Netflix and Hulu to the daily newspaper, consumers are willing to pay for a service.

"Subscriptions started in media and people caught on that once someone signs up for something, they tend to not turn it off, sometimes getting the value," explained Jeff Hoover, director of c-store data insights at Newton, Mass.-based Paytronix, a provider of customer engagement solutions and loyalty programs for convenience stores, restaurants and retail chains.

Subscriptions have since migrated from the media world to the restaurant world. Hoover pointed to Panera Bread as an example. With the fast-casual restaurant chain's Unlimited Sip Club subscription, members pay $11.99 per month and can enjoy a cup of any flavor drip hot coffee, hot tea, iced coffee, iced tea, Charged Lemonade, lemonade or fountain beverage every two hours during regular bakery-café hours, including free refills of the same beverage at any participating Panera Bread bakery-café in the United States.

"I think it has always made perfect sense for Panera. Panera sells food, and drinks are an add-on. If I can get someone to subscribe to the drink program, obviously you're hopeful to gain some of the volume on the foodservice side of the business as well," Hoover noted.

With today's influx of higher-quality foodservice programs into the convenience channel, it's a logical next step for c-store retailers to explore the subscription space.

"Convenience stores are trying to become more like restaurants. They are going to have to become more dependent on what their in-store items are, as opposed to gas, in the future," Hoover said. "I think it only makes sense that they'll look to restaurants for common technology and practices, and see where they need to compete, where those restaurant brands that they're effectively competing with for that inside business are having benefits."

Although the convenience channel to date has been slow to embrace this new avenue, some Paytronix clients are rolling out their own subscription programs, such as Savannah, Ga.-based Parker's, which operates 76 convenience stores throughout southeast Georgia and South Carolina under the Parker's and Parker's Kitchen banners.

In early March, Parker's introduced Chewy's Drink Club, a dispensed beverage subscription program that is available to Parker's Rewards members for $6.99 per month. Subscribers can redeem one large fountain drink per day at any Parker's or Parker's Kitchen store across the retailer's operating footprint.

"In response to customer demand, we've launched Chewy's Drink Club, so our loyal customers can get their daily fix of Chewy Ice and their favorite fountain drink, freshly brewed southern sweet tea or Parker's Fancy Lemonade," said company founder and CEO Greg Parker.

He also noted that the program saves Parker's customers time and money, and offers them a frictionless experience at checkout.

Food, Beverage & Beyond

This year has also seen Altoona, Pa.-based Sheetz Inc. enter the subscription arena. The convenience store chain, which operates more than 600 stores in Pennsylvania, West Virginia, Maryland, Ohio, Virginia and North Carolina, offers two such programs.

Customers can subscribe for unlimited "fryz" for $9.99 a month. Through this program, they can order fries via the Sheetz mobile app every two hours, and there is no limit on how many times they can use the subscription from month to month.

Sheetz customers can sign up as well for an unlimited self-service drink subscription for $14.99 a month. Like the fryz subscription, they can get a drink every two hours.

Drinks are also the focal point of a Circle K subscription service. The global banner of Laval, Quebec-based Alimentation Couche-Tard Inc. aims to build on its reputation for extensive beverage offerings and endless flavor combinations with the Sip & Save subscription service. For $5.99 a month, members can choose any one of Circle K's coveted beverages, including iced tea, iced or hot coffee, Polar Pop or Froster, in any size cup daily. Since its rollout less than a year ago, Sip & Save has amassed 400,000 active subscribers.

Outside of food and beverages, there are other areas of a convenience store operation that a retailer can tap when it comes to subscriptions, too. Thinking outside the literal box, some are rolling out subscription programs for their car wash customers.

In early 2021, South Florida-based Sunshine Gasoline Distributors launched an app-based car wash subscription program in partnership with Liquid Barcodes Inc., becoming one of the first c-store retailers to offer a subscription program for unlimited car washing.

More recently, Truesdale, Mo.-based Warrenton Oil Co., which operates 59 FastLane stores throughout the state, debuted monthly car and truck washing subscription services. Customers can subscribe through the existing FastLane app and select from several wash subscription packages, all offering a contactless wash experience. Warrenton Oil operates 17 car wash locations and one FastLane Truck Wash location.

Staying outside the store, Atlanta-based RaceTrac Inc. rolled out a monthly fuel subscription program, RaceTrac Rewards VIP, in 2020. For $2.49 a month, RaceTrac Rewards VIP members can save 10 cents per gallon on their first 40 gallons and 3 cents per gallon thereafter.

RaceTrac Rewards VIP is a premium add-on to RaceTrac's standard loyalty program, RaceTrac Rewards. VIP members receive discounts at the pump in addition to various coupons and promotions on RaceTrac's in-store products.

Paytronix's Hoover encourages other c-store retailers to explore the subscription space. And he noted that rather than subscribing for a specific product or service, it could be an added benefit like a special pickup location or curbside pickup for premium customers.

"I think retailers have to treat this as a true product area that they're going to grow and expand in the future," he advised. "At least, consider doing that because I think we're inevitably going to see c-stores and many other restaurants do similar things, especially if it's a special window or counter that you go to pick up your things that costs nothing for you as a retailer, but as a customer I get to skip the line."