Three tips to make delivery work for convenience store retailers.
Kevin Rice, Bounteous
During the pandemic, convenience store retailers and restaurant operators scrambled to keep their doors open and generate sales by whatever means necessary. One approach was through off-premises fulfillment, specifically delivery and curbside pickup programs. The sudden necessity for safety, convenience and flexibility was the perfect storm where digital — which was already trending throughout the retail industry — could take root.
Retailers that had off-premise programs in place before the pandemic fared well during this time, as digital architecture allowed them to be nimble and communicate new offerings to their customer base. Those that didn’t faced significant challenges, and it was the final push they needed to implement programs that met consumers’ need for off-premise options.
As the line between restaurant and convenience retail continues to blur, it’s critical that c-stores — particularly those that serve food — offer more robust pickup and delivery options in order to stay competitive.
The good news is that c-stores don't need a sophisticated delivery program on day one. They just need to start somewhere, test and learn, and continue to look for ways to create value (i.e., safety, convenience and flexibility).
Tip 1: Start a Delivery Program Using 3PDs
When c-store retailers without delivery programs needed to get in the delivery game quickly, they turned to third-party delivery services (3PDs), such as DoorDash, Uber Eats and Grubhub. In the midst of the pandemic, many Americans preferred the new level of convenience and accessibility these services provide, and operators depended on them as they dealt with staffing challenges.
Unfortunately, 3PDs charge significant fees — often up to one third of an order’s ticket price — which are typically passed along to the consumer. Another issue is that these third-party aggregators have exclusive access to valuable customer data, which means retailers have little to no insight into what is driving customer behavior. Additionally, each 3PD service must be managed with a dedicated tablet, which can result in unruly clutter and additional complexity within the store.
There’s no doubt 3PDs were a lifeline for many retailers during the pandemic. Starting with this model lets customers get used to the idea that your products are available for delivery, with minimal startup costs and quick implementation.
But for c-stores playing the long game, the ultimate goal is to collect their own customer data, so they can develop deep insights into their customer base’s purchasing behaviors.
Tip 2: Strategically Create Your Own Delivery Channels
As your first-party online ordering capabilities grow, you can transition to using 3PDs solely as a delivery fulfillment service. This way, you can take the order on your own apps or website, giving you ownership and access to essential data, but also the flexibility to use 3PDs to fulfill your delivery orders.
At this point, it’s a good idea to join forces with trusted industry partners whose portfolios prove their thought leadership in the digital space. For example, the Bounteous Digital Maturity Model can help operators determine where they are in their digital marketing journey and which steps to take next in the process.
Once strategic sales and marketing goals are determined, build out your delivery plan and tech stack intentionally. Once you have your own online ordering channels, you can collect first-party data and begin a customer relationship management (CRM) program.
Start by using marketing automation tools such as Braze or Salesforce that allow operators to identify prospective customers, build out a customer database, scale campaigns, and eventually create meaningful customer interactions that build true loyalty.
Tip 3: Use Loyalty to Reacquire Customers From 3PDs
Digital transformation that allows robust customer relationship management and data analytics doesn't happen overnight: it takes years. Once you have your own online ordering channels in place, you can convert 3PD customers with enticing loyalty programs and offers to purchase from your own apps and website directly.
When it comes to brand loyalty, COVID fundamentally changed consumer behaviors. Millions of Americans began working remotely and no longer needed to stop on the way to and from the office for coffee, breakfast or gas. Decisions were no longer based on which dining spot or retail store had the best selection or atmosphere, but rather who could get items to your door in the safest, fastest way.
We are still in the midst of adjustments as offices and dining rooms reopen and restrictions fade away, which presents a huge opportunity for brands to capture new customers as consumers reestablish and reform habits.
An easy, practical and effective way to do this is with packaging. Even if your food is delivered by a 3PD service, you can use branded packaging, stickers or flyers that promote your native app or ordering website. Offer a welcome deal to customers who sign up for and order through your app. In this way, 3PDs can be used to “reacquire” customers and drive loyalty to your own brand.
Remember, loyalty is different from rewards. Loyalty is an outcome achieved through a holistic customer relations strategy. It is emotional in nature, whereas a rewards program is just one aspect of such a strategy.
Emotional loyalty takes time to build and can be cultivated using strategies such as giving members exclusive access to new products or services, providing convenience-based benefits that save users time (such as order ahead or curbside pickup), or tying rewards programs to a charitable cause. This cultivates the “brand love” needed to create long-lasting customer loyalty.
Kevin Rice is executive vice president at Bounteous, a digital growth partner for the restaurant and c-store industries that helps brands like Dash In, Domino’s and Raising Canes drive incremental revenue through digital experiences. Hathway joined Bounteous in November 2021.
Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.