Demand for delivery is surging during COVID and retailers are scrambling to keep up -- especially those who are new to the delivery scene, like so many in the c-store industry.
But a handful of c-stores have been ahead of the game, offering delivery before COVID, and we can learn a lot from them. Case in point: 7-Eleven. They began experimenting with delivery three years ago.
"When 7-Eleven began offering delivery in 2017, we certainly didn't foresee a pandemic accelerating on-demand ordering platforms from convenient to essential," said 7-Eleven COO Chris Tanco. "This year, we've doubled our delivery footprint and quadrupled our daily delivery orders.”
The massive c-store chain now delivers in 43 metropolitan areas encompassing 514 cities. They offer 24/7 delivery on over 3,000 products.
Here are eight lessons c-store owners should learn from 7-Eleven’s deliveries.
1. Choose wisely between in-house systems and third-party apps 
Image credit: 7-Eleven
One of the most important decisions you’ll have to make is whether to handle delivery in-house or to partner with a third-party provider (like UberEats or Instacart).
At first glance, it may seem like a no-brainer to go with a third party. After all, they handle everything, right? Well, in some ways, yes. They certainly solve a lot of (or most) logistical issues. But they aren’t without their own problems.
In fact, NACS recommends running a full cost-benefit analysis of third-party providers to determine if using store staff is a better option.
Here are some of the most important things to consider:
- Profitability
Fees from third-party providers can take up to 30% of the ticket, negatively impacting margins.
Of course, the flip side is they cut overhead costs such as delivery staff and vehicles.
Third-party distribution services can also help increase sales, attracting customers who already use their services. You’ll need to run the numbers to see if it’s worth it.
- Data ownership
Data from delivery customers is typically richer than what's collected in-store since the customer has to input their info or create an account. It shows where customers live, what they ordered, when they ordered it, how often they order, how long it takes for them to pull the trigger, etc.
Whoever owns this information has a major competitive edge. And according to NACS, many retailers report that data sharing is often not as expected with third-party providers.
- Logistics
Usually, the final hurdle to consider is logistics. This includes everything from developing an ordering system to managing the supply chain to hiring and training new staff. Do you have the resources, both financial and human, to pull this off on your own?
When evaluating this, remember that even though customers haven’t experienced delivery from you yet, they do have existing expectations about delivery service in general. So you need to provide an experience that meets (or exceeds) those standards.
The NACS report on last-mile fulfillment in convenience retail shows that the chief concerns of retailers with third-party providers are:
Image credit: NACS
So, what did 7-Eleven choose? Both, actually.
Customers can order via the proprietary 7Now app or through seven other platforms including UberEats, GrubHub, Instacart, Postmates, DoorDash, Google Food Ordering, and Favor.
It didn’t happen all at once though, which brings us to the next lesson…
2. Start small and expand your services as you go
Image credit: 7-Eleven
When 7-Eleven launched its delivery service, it was available in just 10 locations. All locations were in the Dallas area, and customers could only place orders through the 7-Now app.
This allowed 7-Eleven to collect data and make changes before expanding into other markets. When the pandemic hit, they added in a slew of third-party services to quickly expand their footprint and become more accessible.
Of course, you don’t have the luxury of time like 7-Eleven did back then. But there’s still wisdom in starting small and expanding as you go. It allows you to experiment and figure out what works for you (and what doesn't).
Whether it’s starting with a select number of locations or a single delivery method, you can always add things in as you find success.
3. Promote delivery to reach new customers
Delivery allows you to reach new customers by removing location constraints. This is a huge factor in the c-store industry where shoppers almost always go to the closest store.
It also opens up a new market beyond traditional c-store shoppers, especially during the pandemic. Let’s say a customer is wrapping presents, for example, and runs out of tape.
How can they get one small item, almost immediately, without going to the store? Enter c-store delivery. Small basket, high frequency.
You can use promotions to reach these new customers and incentivize delivery orders. As you can see in the tweet above, 7-Eleven ran a contest back in 2018 where delivery customers were entered for a chance to win Cowboys tickets.
They also delivered free Slurpees in conjunction with their annual “National Slurpee Day” promotion in 2020.
Luckily, running promotions is an area where we can help.
One idea to promote the launch of your delivery program (or to give it a boost) is to run a countdown campaign, offering something free or discounted each day. To ensure profitability, it can be done with a minimum purchase or product pairings.
For example:
- Get a free donut when you order our new Christmas Latte for delivery!
- Free fountain soda with pizza delivery!
- Add one of these household items to your food order for free!
- Free coffee with any $5 delivery order!
4. Make it easy
Image credit: 7-Eleven
Remember how delivery removes location constraints, allowing you to reach more customers? Well, it’s a bit of a double-edged sword because competition increases too.
That’s why you need to make it as easy as possible to order from you as opposed to someone else. This is why 7-Eleven added so many third-party providers this year.
If a customer normally orders through Instacart, for example, it’s easiest to continue using that same platform (at least at first). They don’t need to download another app or sign up for anything new. They can just do things the way they’ve been doing it.
Another way to make it easy is to enable voice ordering, as 7-Eleven did in 2019. Customers can also search for "7-Eleven near me" on Google Search, Google Maps, and Google Assistant to order from nearby locations.
“We continuously challenge ourselves to find even more ways to offer convenience and value to our customers, when and where people need it most,” said Raghu Mahadevan, 7‑Eleven vice president of digital and delivery.
5. Offer contactless delivery
Image credit: 7-Eleven
Contactless delivery was not a term many of us were familiar with before the pandemic.
In fact, the phrase went from a score of 2 in Google’s popularity index on March 1st to a 100 on March 29th. (For reference, 100 is the highest possible score…)
In response to demand, the vast majority of retailers and food ordering apps now provide contactless delivery as a standard option, including UberEats, GrubHub, Instacart, Dominoes, McDonald’s, and more.
To ensure that customers feel safe ordering from you, you’ll need to do the same.
As 7-Eleven’s COO Chris Tanco said, “How convenience is defined is completely different today than it was just a month ago. Our customers are now looking for more convenient shopping solutions at home.”
6. Optimize your supply chain and other logistics
Image credit: Supply Chain World
Before diving into a delivery program, you should take a good look at the speed and logistics of your supply chain. You’ll need to be able to quickly re-stock items in the event of unexpected sales.
7-Eleven store operators, for example, place their inventory orders by 10 a.m. each day. Orders go to the warehouses and bakeries that support these stores across North America.
Sandwiches, salads, and baked goods are prepared fresh and immediately time-stamped. Trucks are then dispatched to deliver products between 9 p.m. and 5 a.m. the very next day.
Another thing to consider is whether you’ll fulfill delivery orders from your own stores or from a warehouse or “dark store.” 7-Eleven uses its own stores for customer delivery orders. And according to NACS, they’re in good company, as 90% of operators do the same.
7. Go beyond the home
Image credit: 7-Eleven
In yet another innovative move, 7-Eleven now delivers to public places like parks and beaches using 7Now Pins.
To order delivery to a pin location, shoppers use the 7Now app. It auto-locates their current position and shows nearby pins (or hotspots). Each pin corresponds to a public place where they can receive the delivery.
A courier picks up the order from the nearest store and delivers it to the pin location in 30 minutes or less.
In 2019, 7-Eleven had 2,000 of these hot spots, including New York’s Central Park and Venice Beach in L.A.
According to Gurmeet Singh, 7-Eleven's executive vice president and chief digital information and marketing officer, they envision reaching over 200,000 pins.
"We've been on this journey to redefine convenience," Singh said. "This makes it easy for people to stay in the moment."
8. Always be innovative and forward-thinking
Image credit: 7-Eleven
7-Eleven took a big risk being one of the first in the industry to implement delivery. At the time, many viewed it as unnecessary for c-stores.
But 7-Eleven saw the writing on the wall and started making moves to figure it out before the competition. And while it’s clearly given them a leg up during COVID, it would have worked out to their advantage regardless.
According to Inc. Magazine, “If a business will not or cannot evolve alongside market trends, it will lose its most valuable employees, its reputation in the industry, and its most loyal customers. But the more adaptable an organization, the more relevant and advanced it becomes, and the more resilient it becomes in the face of competition.”
Here are a few benefits of being an early adopter:
- Early adoption of technology gives you the freedom to experiment and improve before it becomes mainstream.
- When you’re the first, everyone else will look to you as an expert. Look at this article, for example. We’re writing an entire piece about 7-Eleven’s deliveries so that others in the industry can follow their lead.
- Customers and business partners tend to be more collaborative when you try something new. Both sides need each other’s input to make it work.
Conclusion
Delivery and other last-mile fulfillment services are surging in the retail industry, and c-stores are no different.
If you’re struggling to implement a delivery program, use these 8 lessons from 7-Eleven’s deliveries:
- Choose wisely between in-house systems and third-party apps
- Start small and expand your services as you go
- Run promotions to reach new customers
- Make it easy
- Offer contactless delivery (and promote it!)
- Optimize your supply chain and other logistics
- Go beyond the home
- Always be forward-thinking and innovative
