Though not typically associated with e-commerce innovation to the same degree as other channels, convenience stores have proven more than willing to adapt during the COVID-19 pandemic by prioritizing omnichannel strategies.
On the one hand, convenience stores were quick to deploy curbside pickup services that worked well for grocers and mass merchandisers. Giving customers the option to order and pay remotely before picking up became essential for c-store retailers to ensure they were not being left further behind.
But the real story continues to play out in delivery.
Some c-stores have been able to go it alone — like upscale brand Foxtrot, headquartered in Chicago. Its 60-minute delivery promise has seen success with the urban millennial cohort.
However, many c-stores do not have the resources to offer their own proprietary delivery services, instead opting to partner with third-party delivery aggregators that operate their own mobile apps. This gives retailers exposure to an enormous pool of potential customers without having to invest in building delivery infrastructure themselves.
But despite efforts to expand their online reach, convenience stores are increasingly facing competition from the very partners they have relied upon to do so.
On the back of an explosive 2020, driven by soaring demand for restaurant food delivery, DoorDash introduced its online convenience store platform DashMart. Akin to the delivery-only ghost kitchens that have proliferated throughout the restaurant industry, DashMart’s virtual stores are able to operate at a much lower cost than their brick-and-mortar counterparts.
Elsewhere, Uber recently announced it was partnering with delivery platform GoPuff to offer essential items, having already acquired on-demand alcohol delivery service Drizly earlier this year. The company’s Uber Eats platform is now host to a wide array of products and services that go far beyond restaurant food, providing further competition to c-stores hosted on its app. The success of Uber Eats was underscored by its performance last year when it exceeded the company’s ride-hailing revenue for the first time.
The growing number of options available to consumers on third-party apps is bound to eat away share from the more established c-store players. But with mobility still somewhat suppressed due to the lingering effects of the pandemic, it will be some time before c-stores can fully capitalize on one of the most important segments of their traditional customer base — commuters.
For now, c-stores have little choice but to continue partnering with delivery apps. Over the short-term, a multi-pronged approach to omnichannel — combining in-house services with external partnerships — is perhaps the best way to expand their customer base and drive sales.
The long-term benefits of partnership, however, are less clear.
Once people return to work and pre-pandemic travel patterns fully recover, some convenience stores may decide that offering delivery is a luxury they no longer need to accommodate. But for consumers who appreciate the option of having an emergency bottle of wine or a late-night snack delivered in short order, the genie may well be out of the bottle.
Cameron Parker is a research analyst at Euromonitor International. Parker analyzes developments in the global services and payments landscape, providing insight on consumer trends, marketplace dynamics and competitive environments across industries. Visit Euromonitor.com.