If there’s one thing shoppers want these days, it’s convenience. And who better to offer that than convenience stores?
The concept of convenience has changed a bit in recent years, however, as the pandemic changed consumer behaviors and startups looked to meet them with items delivered at a blink-and-you-miss-it speed. But c-stores have worked to keep pace, and while some have turned to fulfillment partners like DoorDash or Grubhub to do so, others have moved to build out ops in-house.
- 7-Eleven and Circle K are the latest to make investments in owning their delivery.
“Startups don’t have as much experience with the vendors, with how to think about merchandising, of how to really build loyalty with their customers over time,” Ken Fenyo, president of research, and advisory at Coresight Research, told Retail Brew. “The c-stores have some advantages they can really rely on.”
For some c-stores, that customer experience and loyalty is more important than getting a milk pint to a consumer’s doorstep in 15 minutes flat. Retail Brew caught up with two c-stores, Foxtrot and Casey’s, about optimizing delivery operations and balancing their physical and online channels.
When Foxtrot debuted in Chicago in 2014, its business was solely online, delivering items from local coffee roasters, brewers, and bakers in under an hour—which was “pretty darn fast at the time,” co-founder and CEO Mike LaVitola told us.
But after a few years, the company realized it made more sense to have its own inventory, and has spent the last five years “dialing in” its retail presence, now operating 20+ stores, with four new ones to come in Austin, Texas.
“We don’t experience a lot of customers who only want to shop in retail or only want delivery…Folks need different modalities at different times,” he said. “That means that you need to be native both in retail and online because that’s where your customers are.”
Foxtrot’s delivery ops are all in-house, which LaVitola said is Foxtrot’s “secret sauce to the brand and the customer experience.”
- Over the years, he said, “tight control over [Foxtrot’s] inventory”—ensuring what a shopper orders is exactly what’s delivered to them—has been essential.
LaVitola said 75% of Foxtrot’s product and engineering teams’ efforts is on the “behind-the-scenes work” of back-end systems, like its platforms for merchandising, order tracking, and supply chain. As Foxtrot’s internal systems and courier system have improved, the retailer has cut down its delivery time to 30 minutes, LaVitola said.
But LaVitola said delivering products quickly is “table stakes,” and the quality and differentiation of its inventory, whether that be products from local businesses, its own prepared food, or wine (one of its best-selling delivery items), helps it stand out from other c-stores and rapid delivery players.
Piece of the pie
Since 7-Eleven’s acquisition of Speedway last year, Casey’s is the country’s third-largest c-store chain. It’s no stranger to delivery, first introducing it in 2011, and also offers other digital options like curbside and in-store pickup.
Historically, most of those delivery orders were for its made-from-scratch pizza, but when the pandemic hit, it began to make more convenience items like beverages and snacks available, too, now offering 700 items, Art Sebastian, its VP of digital experience, told us.
- Since the pandemic, it’s seen more shoppers add grocery items to their whole pie orders, along with a boost in grocery-only orders (cereal, milk, and snacks), and more multi-packs versus single-serve items.
The chain uses a few different ordering and delivery systems, he said. At 400 stores, it’s all in-house. Another 1,000 have orders placed through Casey’s and delivered through DoorDash, 1,400 both placed and delivered through DoorDash, and 800 handled by UberEats.
This setup “gives us options, as we look at both economics and experience,” Sebastian said. In-house ops give it control over the process, but outsourced fulfillment lets it scale quicker.
Casey’s, too, is focused on quality and customer satisfaction over speed of delivery. The company has a “smart promise time algorithm” that takes into account what’s in the order (three pizzas and a Snickers takes longer than an order of breadsticks and a Pepsi, for example), plus how many employees are working at the time.
“The most important thing that I think about is meeting the commitment and delivering the great experience versus chasing a time,” he said.
Source: Morning Brew