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In my last piece, I discussed the importance of creating relevant and robust content on retailer websites in order to build awareness, visitors and in-store traffic. The next step in the evolution of the U.S. convenience store industry is to take a page from other countries, where they are offering e-commerce via their convenience stores. This is one area where countries like India and China are way ahead of the United States.
Convenience stores in the U.S. are building out their fresh offerings — a great predecessor to an e-commerce solution. Now that they have built out compelling content, c-stores should look at developing the ability to service customers through other channels.
Consider the implications of this scenario:
It’s Friday night and a group of friends are gathered together for an evening of charades. The wine is flowing. The wind is blowing. They are starving and running out of food…and toilet paper. No one wants to venture out, yet they all have money to chip in.
If only they could find a place that will deliver their goodies. Karen wants pizza. Bill wants chicken wings. Sharon wants hot dogs. We need some soda and paper plates, too, and maybe some toothpaste and lettuce. They can’t decide on a takeout place. But wait, what’s this? A convenience store that does online ordering. Why, it’s perfect! They can each get what they want and no one has to compromise.
Up until now, convenience retailing has been exclusively bricks and mortar. However, that is about to change very rapidly. Industries in both direct and indirect competition, such as grocery stores and restaurants, have already started transitioning their sales strategies to include e-commerce.
The convenience store industry will need to do the same in order to keep pace; cater to their customers’ demands and desires; and continue to build revenue from additional channels to prevent erosion and increase overall company profits. Convenience store retailers are fortunate in that they have several strategic advantages over their competitors from other industries.
For nearly a decade, Jeremy Neren, founder of GrocerKey, which helps grocery and convenience stores build profitable e-commerce solutions, ran an e-commerce convenience store and delivery service in Madison, Wis. His case study proved the market potential, achieving $400,000 in annual revenue serving just a 2-mile radius in a mid-sized market.
What’s the Customer’s Mission?
Bill Bishop and his team at Brick Meets Click have defined six “Digital Shopping Missions” that lead consumers to purchase a grocery product online. E-commerce convenience and delivery caters to three of these shopping missions, which is more than any other industry can claim (even grocery).
The first digital shopping mission, “Take My Order,” fits very well with the growing amount of fresh food product being offered by convenience stores. This digital shopping mission is about serving the customer with a fresh food product (pizza, sandwiches, salads, etc.) they are interested in consuming immediately. This is already being done successfully by Casey’s General Stores, the Iowa-based c-store chain that operates almost 2,000 stores, via delivery of its pizza.
The second digital shopping mission, “Shop When I Want,” can simply be accomplished by beginning to offer online ordering. Very few convenience stores have started offering this capability, but that will change as more profitable solutions become readily available as well as resources to assist in development of the skill set needed to provide this service at a profit.
Convenience stores are especially well-suited for this mission because they have the ability to get started easily and cost effectively. C-stores can offer 24/7 purchasing through online ordering and provide late-night pickup and delivery, which is a great fit considering the typical assortment.
The third digital shopping mission, “Just in Time,” is about serving the customer within a two-hour period. Convenience stores have a major leg-up on grocery stores in terms of this mission. Given the size of the store and real-time inventory controls, c-stores are very well-suited for on-demand delivery with nearly no out-of-stocks. This is a recipe for a powerful customer experience and huge new revenue stream.
Providing online ordering and delivery is a very natural evolution of the convenience store industry, but more importantly, it’s a very profitable evolution. On-demand consumers are typically not very price sensitive, and when they are rewarded with a great experience, they are extremely loyal.
First steps include building out the functionality to offer customers the ability to purchase your items online and pick them up in the store, where they are waiting.
Delivery is important as a next step, but requires a logistics solution. Start slowly, offering online shopping with in-store pickup first, and then build out delivery options.
The time for convenience stores to make the move into e-commerce and delivery is now. Being first has its rewards. Lagging behind will lead to erosion and customers who will go online elsewhere if they want to shop online for food and beverages.
You have the opportunity to be an industry pioneer and set yourself apart from your competitors.
Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.