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02/03/2021

Trends on the Post-COVID Fast Track

ALEXANDRIA, Va. — For convenience stores and gas stations, the COVID-19 pandemic inspired customers to step on the accelerator pedal when it comes to trends that had become commonplace in other retail channels, but were much slower to take hold in the convenience segment.

Now that the dust has settled from the reactionary period of early 2020, when the coronavirus was just beginning to spread across the United States, many of these trends seem to have staying power.

Take e-commerce penetration and last-mile delivery, for instance. Online grocery reached $5.9 billion in August 2020 — almost five times what it was the year prior, Frank Beard, director of Safe Shop, an organization that independently certifies retailers who meet and exceed customer expectations for safety, cited during an education session as part of the recent NACS Crack the Code Experience.

Anthony Perrine, president of single-store Lou Perrine’s Gas and Groceries, which has been in business for more than 60 years in Kenosha, Wis., noted that even though his store has done in-house delivery for about seven years, “during the midst of COVID here in Wisconsin, we were up 500, 600 percent in deliveries. It came down a bit, but now [it’s] back up again because of higher COVID cases in Wisconsin.”

Lou Perrine’s continues to test more facets of delivery, including perfecting the shipping of its iconic Mama P’s Ho Ho Cake outside the local store area. It also now utilizes third-party delivery services.

“It took a long time prior to COVID for people to get used to gas stations delivering, but now with DoorDash and others, it’s accepted more and is here to stay,” Perrine said.

John Nelson, CEO of Chicago-based Vroom Delivery Inc., which touts to be the first ecommerce platform specifically designed for the convenience store industry, echoed that the pandemic “really accelerated the adoption curve” of delivery in the convenience channel. “Folks who were previously reluctant tried it during the pandemic and found it was easy,” he said.  

Many c-stores broadened their delivery customer base in a matter of weeks, which might have taken years otherwise without COVID, he observed. Like Perrine, Nelson witnessed stores that were already delivering see their volumes go up around 500-600 percent within days of lockdowns.

“It’s still trending around 400 percent above the volume pre-COVID,” he reported.

Noting that winter, in general, is better for delivery, Nelson said his company expects volumes to remain high for the foreseeable future. Right now, Vroom is seeing a morning spike for delivery. “Traditionally, the e-commerce came later, when people got home after work, and on weekends or when the weather was bad. Now, we’re seeing a spike when stores are opening or in the 9-11 a.m. timeframe,” he said.

For Thorntons Inc., which operates 200 c-stores in six states (Kentucky, Illinois, Indiana, Ohio, Tennessee and Florida), the key to the delivery piece is tying it to the inside-store piece, according to Brian Scantland, vice president of fresh food operations for the chain.

“How do we shift our model, with food and labor, to meet guests where they are?” he posed. “Having the flexibility to meet guests where they are is the key. That can be inside the store, at the frontcourt, or online.”

Interacting with guests on-site and online needs to be seamless in that both experiences must fit the personality of the brand, according to Scantland.

It’s also crucial that c-store operators verify their online profile information, such as that on Google Maps. This is a very necessary — but often overlooked — step for all of this to work, advised Greg Sterling, vice president of market insights at Uberall, which helps companies gain greater control over their online presence and reputation with software solutions.

If c-stores are not in the places where customers can discover them electronically online, they “will be bypassed for a competitor,” he said. “You need to be present, trusted, and easy to use.”

The panelists also discussed the advantage in accepting EBT payments for delivery during these COVID times. Nelson noted that the U.S. government recently started allowing online EBT transactions, but only with a handful of players such as Walmart and Amazon. “We’re trying to get in that space as quickly as possible,” he said. “It’s the biggest missing piece.”

Perrine agreed that it’s a “game changer” for delivery and is “not on DoorDash’s radar.”

Young & Mobile

Another big trend accelerated by the pandemic for c-stores is mobile payment. It seems consumers who don’t want to touch screens for health and safety reasons have discovered how easy and convenient mobile payment is — and never looked back, Beard said.

People of “the younger generation, which is just getting their first jobs, is driving this,” added Perrine. “They’re used to what’s quick and easy,” and that is mobile pay.

“It’s definitely an age thing,” Sterling agreed.

Vroom was cashless since day one for reliability reasons, Nelson noted. Once a payment form is saved on the platform, customers realize how easy it is to reorder the next time, he said.  

For Thorntons, the shift to mobile wasn’t nearly as notable as customers moving from cash to credit.  However, Scantland said the retailer has seen a sizeable switch to self-checkouts, which were originally designed for speed, but are now playing a big factor in customer safety.

Other key takeaways from the panelists included:

  • Remember that your employees are living through this pandemic, too; explain the “why” to your team members, advised Scantland.
  • When stores start delivery, “we usually recommend that they look for volunteers in the organization,” said Nelson. Vroom has found that employees are often excited to do this for the financial incentives and the chance to get out of the store.
  • Bring as much of your store online as you can; make it easy for customers to find you and buy from you, said Sterling.
  • Status quo is obsolete in the gas station industry now. COVID increased everything technology 10 times faster, even for the small players, stated Perrine.

The NACS Crack the Code Experience was a five-week digital event that brought together convenience store industry retailers and suppliers virtually in lieu of an in-person NACS Show this year. It ran from early November to early December.