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NATIONAL REPORT — For years, convenience stores have lived up to their title, providing accessibility, ease and speed to time-starved customers. But in today’s on-demand world, the definition of “convenience” is changing and, without question, convenience stores need to evolve along with it.
“Consumers’ habits and preferences are changing. With Netflix, people can watch movies on demand rather than go to the movie theater, and even bingewatch a full season of a television show on demand,” Prahar Shah, head of business development at DoorDash, an on-demand food delivery company, told CSNews Online. “Consumers can get so many things with a touch of their fingertips. It’s really an emerging trend.”
Just this week, 7-Eleven Inc. launched a partnership with DoorDash to provide delivery from participating 7-Eleven convenience stores in five major metropolitan markets across the United States. More than 200 stores are participating. Customers in New York, Los Angeles and Chicago can now order products from their local 7-Eleven stores for delivery, with service following in Washington, D.C., and Boston in the coming months.
7-Eleven also recently announced a partnership with Postmates, another on-demand delivery service based in San Francisco, to deliver hot foods, snacks, beverages and other store items from select locations in San Francisco and Oakland, Calif., as well as 36 locations in Austin, Texas.
To place an order, customers download and use the Postmates app for iOS or Android, as well as using the Postmates website. An order is accepted by one of the delivery workers in the area, and the food is prepared, picked up at a 7-Eleven location and delivered to the consumer within an hour.
“In San Francisco and Austin, we have a full catalog in the app,” Holger Luedorf, senior vice president of business development at Postmates, said about the 7-Eleven partnership. “Customers are able to browse 7-Eleven products. We work directly with 7-Eleven to make sure they are the most up-to-date as possible. When a Postmate goes into the store, they grab the desired items, pay with a prepaid debit card and are on their way.”
Delivery is 24/7, and the company charges a delivery and service fee. 7-Eleven is the first convenience store chain Postmates has partnered with, but the company will continue to evaluate other retail partnerships across multiple verticals, and will also be expanding the 7-Eleven service to more cities in the coming months, according to Leudorf.
“7-Eleven doesn’t have delivery trucks and coolers ready to do delivery, so it’s about finding partners that are willing to help,” said Lee Peterson, executive vice president of brand, strategy and design at WD Partners, a retail consulting company based in Dublin, Ohio.
On the other hand, Amazon.com Inc. does and is continually changing the way consumers think of online shopping and delivery. Amazon has become a major competitor to all retailers, including convenience stores, according to Peterson.
“Everyone is waking up to the fact that Amazon is everybody’s competitor,” he explained. “Amazon is all about convenience.”
The company launched Amazon Prime, a yearly subscription that offers consumers free two-day delivery on a wide variety of products. Then in December 2014, Amazon Prime Now launched in Manhattan. Today, the service is available in Miami, Baltimore, Atlanta, Dallas, Austin, Indianapolis, Chicago, Seattle and London.
“Amazon Prime Now is one of the benefits of being a Prime member, and we offer one-hour delivery for $7.99 or two-hour delivery for free,” said Kelly Cheeseman, spokesperson for Amazon, explaining customers can place their orders through a mobile app. “They can search through tens of thousands of items — from daily essentials like bottled water and paper towels; to electronics including a big-screen television, Bose headsets; and a select amount of food items in New York and Indianapolis, including some frozen and chilled items.”
Amazon can accomplish this through its more than 50 fulfillment centers across the United States, along with dedicated teams working on Prime Now orders. As a customer purchases an item and places an order, a map pops up in the app so they can watch their courier as he or she makes their way to them, Cheeseman said, noting the company continues to hear from customers about how they love the speed of delivery.
“Time is the true commodity and only Amazon really gets that,” said Peterson. “They are taking the whole shopping trip off the table and will drop it off on your porch. C-stores need to start testing things like delivery to see what works. It’s not even just about making money. They need to try it to find out as much information as possible.”
Check out the September issue cover story of Convenience Store News for much more on the rise of on-demand grocery and foodservice delivery, and what it means for c-store operators.