What C-stores Can Learn From Restaurants’ Omnichannel Experiences
Consumers on average spend a third of their waking hours on their phones, even weaving them into dining and shopping decisions. When lockdowns hit, their convenience store shopping went online as well, as many operators introduced digital ordering along with curbside, drive-thru, in-store pickup, and even delivery.
With these new behaviors now ingrained, c-stores are under increasing pressure to deliver the same frictionless omnichannel experiences those shoppers get at their favorite restaurants and retailers. But they face some unique challenges, as well as opportunities, to deliver an omnichannel experience that drives up basket sizes, visit frequency, and loyalty.
According to Convenience Store News’ 2022 Realities of the Aisle Study, half of shoppers who have tried c-stores’ online ordering services are using them more now than a year ago. More than half are using drive-thru and mobile services such as mobile pay at the pump, mobile pay-in-store and mobile coupons/discounts at the same frequency as during the pandemic.
“When we look at Gen Z and millennials, they’re buying a lot more online than ever before,” says Greg Ehrlich, president of Fremont, Ohio-based Beck Suppliers Inc., which is steadily branding more of its 30 locations as FriendShip Kitchen stores. In 2021, the operator introduced online and mobile ordering, in-store pickup and curbside pickup for five of its food-focused locations, and will continue expanding those offerings.
For FriendShip Kitchen stores, “the driver was our food items, but [shoppers] would fill in their basket with other items as needed,” driving a lift in average basket size, Ehrlich noted.
Tapping Into Lessons Learned
Convenience store adoption of omnichannel services such as mobile ordering lags industries such as dining, but operators can leverage this as an advantage.
“You can take all the learning and mistakes and end outcomes and tailor them for the convenience store market,” says Andrew Robbins, CEO and co-founder of Paytronix Systems Inc., a provider of SaaS customer experience management (CXM) solutions for c-stores and restaurants.
Some of those hard-won lessons include:
1. Build on a Solid Foundation
It’s hard to recover from a customer’s poor first experience. So, ensuring a solid technology foundation is key to ensure consistency across physical and digital experiences.
A customer accustomed to, say, ordering a sandwich and redeeming a special offer on a 2-liter bottle of soda and some gum in-store and paying for it all with loyalty points will expect the same functionality online. To achieve that, the ordering platform will require integration with inventory, kitchen display, loyalty, and marketing/promotion systems. Vendors can help facilitate these integrations.
When New Albany, Ohio-based Englefield Oil Co.’s Duchess Stores added mobile ordering, curbside pickup and delivery to portions of its 120 locations, “we really had to upgrade some of those backend systems that we were using for those platforms just so that we were able to serve our customers in whichever way that they would like to be a Duchess customer,” explained Nathan Arnold, director of marketing.
2. Leverage the Omnichannel Loyalty Link
Omnichannel shoppers consistently account for greater lifetime customer value for retailers. A recent study of grocery shoppers, for instance, found omnichannel consumers shop more often and spend up to 20 percent more than in-store-only shoppers.
Already, seven in 10 c-store loyalty members have used a program’s smartphone app, CSNews’ research found, so adding digital ordering and pickup options can turn these already-loyal shoppers into valuable omnichannel consumers. And because digital ordering requires the shopper to enter their name, cell phone number and/or email, it is easy to drive more loyalty enrollments as part of the ordering process.
“C-stores have seen significant value in allowing order-ahead, and rewards and loyalty points driving business,” says Perry Kramer, managing partner of Retail Consulting Partners in Boston. “Digital ordering is a key feature of user retention and frequency of purchase.”
3. Strive for Uniformity
Omnichannel expectations span not just physical-digital divides, but across the brand as well. It can be difficult to deliver a consistent experience if franchisees don’t all participate. Localized suppliers and product offerings can also add complexity to omnichannel ordering and promotions.
“It’s more difficult to, and it requires a lot of more overhead with the app to, manage availability and prices of certain items” across a franchise network, according to Kramer. To overcome franchisee resistance, it helps to build a strong business case showing the benefits of omnichannel, he says. “It’s got to be a deal that works. Sometimes, corporate will sweeten the pot for their franchisees: if you follow along with this promotion, we’ll give you extra revenue or will guarantee you certain sales.”
Offering more generalized promotions, such as a sandwich or drink discount vs. an offer for a specific local specialty, can help operators skirt the complexities of incentivizing and stocking localized products.
4. Embrace Artificial Intelligence
Many operators are putting off learning to apply artificial intelligence (AI) to data until their omnichannel programs are more mature. But AI doesn’t have to be intimidating, and it may already be built into the enabling software. C-stores are applying AI to everything from recommendation engines to personalization to assortments.
Sylvania, Ohio-based Stop and Go Stores (S&G) is even using its omnichannel presence and an AI-powered software platform to recruit and instantly interview potential workers from among its customer base, linking a shopper in the store, site or app right to the recruitment provider, says Neal Frandsen, vice president of marketing for the 74-unit chain.
After spending six to eight months amassing enough data to gain insight into individual customers, Duchess Stores is using AI to target personalized promotions based on purchase history. “The exciting part is being able to get a new product into someone’s hand, whether that’s at a discounted price, free, or full price,” says Arnold. “I think that’s going to help our relationships with our vendors.”
5. Collaborate With Operations
“Store execution is one of the biggest challenges; just making sure that the operations team is ready,” says S&G’s Franzen. For example, if marketing is promoting a free Hershey bar as part of a geofencing promotion, the store manager needs to order enough product, and team members should be made aware of the promo.
Collaboration is also key to establish processes for picking, labeling, holding and tendering digital orders to customers, particularly for items that must be kept hot or cold. Enthusiastic buy-in from staff translates to positive customer experiences and outcomes.
“It’s important that our store hosts understand the why behind our decisions and when they do, then they’re a lot more apt to understand the decisions and what’s important about them so that they can deliver on those expectations to our guests,” says Ehrlich.
Crawl-Walk-Run to Success
While certain basics are essential to deliver an appealing, successful omnichannel experience, it’s important to build up slowly, testing and learning as you go.
Early investments are already paying off for operators, though. Duchess and FriendShip, for example, saw average basket sizes increase through omnichannel ordering.
“When people add online ordering to the on prem, net-net their overall visit cadence goes up and the churn rate goes down,” cites Paytronix’s Robbins. “You become stickier when you interact with a brand in multichannel, the likelihood of you staying with the brand goes way up, and the likelihood of you churning drops.” That leads to 20-30 percent greater spend, he says.
Operators are optimistic that investment in omnichannel will pay off both in meeting customer expectations and bolstering the bottom line.
“The world is changing,” says Ehrlich. “Consumers expect different experiences and companies that deliver those experiences, we believe, will be rewarded for that.”
C-stores can engage customers in ways that drive incremental revenue and build brand affinity.
Facing growing competition from dark stores and third-party aggregators, today’s leading convenience stores are focusing on ways to win customers with personalized, branded experiences. By aligning digital features with ideal customer journeys, c-stores can engage customers in ways that drive incremental revenue and build brand affinity.
A recent research report from Hathway and Paytronix surveyed 164 c-stores and found that more than half do not have the digital capabilities to support such features as contactless payments, online ordering, loyalty, and or even personalization.
Consider three typical c-store customer journeys and the different assets your brand will need to ensure each journey is seamless, convenient and personalized.
Fill-Up or Charge
The impact of your tech stack begins before customers even choose to visit your store. Having the right technology can mean the difference between a customer fueling/charging their vehicle at your station vs. another nearby.
As an example, a branded mobile app can use geofencing to send an automated message (with a personalized offer) notifying customers they are near a store. This can even tie into car infotainment systems that monitor fuel or battery levels and navigate the driver to the nearest gas/charging station.
After arriving, customers can speed up the time at the pump or charging station with contactless payment options and seamless reward redemption. A mobile app with a loyalty program allows customers to monitor loyalty offers, track their progress, and redeem rewards. For extra security, a digital wallet allows them to pay without having to store a credit card number for the transaction.
While at the pump, mobile apps can send artificial intelligence (AI) crafted offers to bring customers into the store. If a customer decides simply to get back on the road, sending a “thank you” message with a reward boosts retention.
These can be the start of a new customer journey, or a continuation of one that began at the pump or charging station. It’s advisable to craft a strategy around both. Having a loyalty program that links rewards at the pump with those in-store can make your customer experience more seamless. For example, you can send an offer for a free coffee while a customer is at the pump, or you can enable customers to accrue points they can redeem at both the pump and in-store.
Using machine learning, your mobile app can send customers a deal on additional items that pair well with those in their basket. While a customer is waiting in line to buy pretzels, the app can prompt them with a deal on pretzels and a large soft drink.
Lastly, consider the checkout process. A checkout kiosk, either fully automated or clerk-assisted, allows for a consistent and personalized customer experience. A “thank you” message, with space to leave feedback, is an effective way to conclude this customer journey and incentivize the next one.
Mobile Order Pickup or Delivery
According to NACS’ Last Mile Fulfillment Report, the most frequently offered last mile service is mobile orders for in-store pickup. Providing a personalized mobile experience can help your brand stand out from the competition. The best mobile apps have an intuitive and user-friendly interface that’s optimized across devices. Customers can build profiles, access loyalty benefits seamlessly, and save favorite orders and payment options to easily reorder the next time. The best mobile apps enable customers to fully interact with brands while on the go.
If a customer chooses to order for pickup, be sure to set up proper signage both in-store and outside. If they choose to order from a third party for delivery to an alternative location, don’t lose control over their experience. An order intake tool like Paytronix’s Handoff captures orders from third parties directly into your POS system. Using Handoff, brands can track inventory and sales data from one place, while updating menu stock and prices across all third-party apps in real time.
The key is to provide a consistent customer experience across all interaction points. For most customers buying a drink or a sandwich, it’s not about whether they order by phone or pay at the counter. It’s about the way in which your brand puts its customers first — saving them time and money, and providing an experience they will remember.