In 2020, retail changed forever. Instead of focusing on growing their businesses, hiring new employees or expanding offerings, many retailers found themselves in survival mode. But it wasn’t all bad.
After the COVID-19 pandemic, professionals in all industries learned that the current state of operations is delicate and can change at any moment. It became clear that there is no single right or wrong way to run a business — especially in the c-store industry, where adaptability became key.
Operators learned to adapt to the pandemic. Order ahead, delivery, curbside pickup — all of the existing amenities that sprouted into the spotlight when COVID hit were being used to their full potential. While many retailers likely weren’t planning on changing operations so rapidly, it showed that they could. And, in many cases, it showed retailers that there were resources available to modernize their operations.
Many businesses didn’t survive, but the ones who did came out stronger. It was through this drastic event that the industry learned it was capable of providing differentiated convenience based not only on what their customers want, but what they need at a certain time.
Now, retailers are continuing to adapt and evolve to different challenges. It’s no secret that the line between quick-service restaurants (QSRs) and c-stores is becoming blurrier every day. To compete, convenience retailers are looking at QSRs for insights into how to close that gap even more.
One incredibly useful tool that the c-store industry has “borrowed” from the QSR industry is the drive-through.
According to the Bluedot Convenience Experience Report, 62% of consumers reported that they would visit a convenience store more often if drive-through or curbside pickup was available. On the foodservice side, according to Restaurant Business, nearly half of consumers would skip a restaurant that does not have a drive-through.
Pak-a-Sak’s Drive-Through Success
To learn more about the impact that drive-throughs can have on a convenience store, CStore Decisions caught up with a retailer that is doing it effectively and seamlessly — Amarillo, Texas-based Pak-a-Sak.
Pak-a-Sak operates 25 locations throughout Amarillo and west Texas. Of the 25, 16 offer drive-through services. The drive-through concept, according to Pak-a-Sak District Manager Terry Wiley, came about roughly a decade ago at one of the company’s Amarillo sites.
“One of the owners at the time had a vision watching all these fast-food places with long lines, and thought, ‘I bet we could get some of that business,’” said Wiley. “So that’s where it came from.”
Since then, the drive-through concept has taken off for the chain. Wiley noted a variety of benefits that the retailer has seen from the offering, but above all, it is an excellent tool to foster relationships with loyal customers.
“We have some customers that come every single day. We have a lot of moms with small children that come every single day, before school and after school, and even elderly people that love it,” Wiley continued. “But I think the customers that go through the drive-through absolutely love it, because they can get anything they want (very easily).”
Long-time Pak-a-Sak employee Sidney Myers.
Wiley sees drive-through as being “like curbside pickup, but better.” With curbside pickup, interactions with the customer begin and end with a handoff, which gets rid of the customer connection that Pak-a-Sak thrives on.
This point is exemplified by a standout Pak-a-Sak employee, Sidney Myers, who has become a staple in her community thanks to the level of service she provides.
“I was a manager of one of our best drive-through stores, and I had an employee (Sidney) who would work Monday through Friday, and whenever she was on vacation, oh my gosh,” Wiley said with a laugh. “The people that come in every morning, they’re all asking, ‘Where’s Sidney? Did something happen to Sidney?’ So, I would tease Sidney and say, ‘You can’t go on vacation!’”
To Wiley, this is the kind of customer service that would be missing without a drive-through. Sidney knows her customers to the point where she is aware of how much ice they like in their Coke, or how much sweetener in their coffee.
“She’s a great human being and a great worker,” Wiley added.
The Pak-a-Sak System
Pak-a-Sak’s drive-through program is unique. The calling card of each drive-through is its outdoor cooler selection, which boasts six refrigerators on the outside of the drive-through window. Displayed in the coolers are cold beverages, their lineups are dependent on location and consumer preferences — depending on the demographic and behavior of the customer base, the retailer adjusts to make sure that the optimal products are displayed.
Non-refrigerated products are also displayed at the point-of-sale (POS), in addition to age-restricted items like beer and cigarettes.
“We try to just stock our top selling items in the drive-through, even candy and salty snacks, chips, cigarettes. Our drive-through feels like a store within a store, because you have almost everything that the customer wants right there on display,” said Wiley. “So, that clerk doesn’t have to go very far to get the items they’re looking for.”
Wiley believes that Pak-a-Sak’s ability to sell age-restricted items through the drive-through is something that really differentiates the company from other stores using a similar format. That, on top of the retailer’s selection of grocery items that may not typically be available in other c-stores, are essential for the chain. He noted that something as simple as a gallon of milk could make a difference for customers.
”You think about a grocery store, where do they put the milk? It’s clear in the back, you have to walk a mile to get a gallon of milk,” he joked.
While customers take advantage of Pak-a-Sak’s drive-through to purchase their grocery items, they can also use their Pak Perks loyalty card to save money on in-store purchases, fuel and more, leading to a more loyal customer base.
For retailers looking to implement drive-through at their chain, Wiley said that training and dedication are essential.
“If (you) are going to add drive-through into (your) stores, you need to have a commitment, and you’ve got to make sure your people are trained properly,” noted Wiley. “These drive-through customers, a lot of times, are the same customer, day after day, every day. And if they can get that customer service feeling, they’re coming back.”
Considering The Logistics
When it comes to actually implementing a drive-through program, however, it’s not always straightforward.
John Matthews, founder and president of Gray Cat Enterprises, Inc., a Raleigh, N.C.-based management consulting company, weighed in with his thoughts about the operational side of a drive-through offering. Matthews has held executive positions at top QSRs including Jimmy John’s and Little Caesar’s.
According to Matthews, when it comes to drive-through challenges, some of the biggest questions come in-house.
“The biggest challenge c-store retailers face is determining what products are available through the drive-through. Unlike the QSR industry — which has perfected drive-throughs with nearly 70% of their sales funneling through the drive-through — they are doing so with a limited number of products (less than 100 or so),” he said. “A convenience store can have 2,000-plus SKUs and not everything can be pushed through the drive-thru, or it will be an operational disaster for both the retailer and the customer in wait times.”
However, once a retailer is able to whittle down its drive-through offerings to the best-selling, most cost-effective selection possible, then they will start to see a different level of convenience.
Then, once the refined menu is set, customers will see shorter wait times, more efficient service and an enhanced experience. Couple this with a well-trained staff and customers are sure to be impressed.
“Given the acceptance in the last five years (due to the pandemic) of pickup and drive-through, this would dovetail nicely with customer expectations,” added Matthews.
Granted, a drive-through program won’t work for every operator — there are a variety of factors that go into the decision. Above all, location and store format play the biggest role.
“In more urban locations, for instance, navigating the drive-through queuing and mobility on the lot will impact its success far more than anything else,” noted Matthews. “With rural locations, you may have the space, but perhaps not the customer acceptance. Each location can pose both pros and cons for drive-through success, depending on a number of consumer preferences.”
So, let’s say you have determined that your store could use a drive-through. Logistically, what’s next? According to Matthews, the very first thing a retailer needs to do is to determine the wants and needs of the customers — what kind of service do they want? What kind of products would they expect in a drive-through?
Once the operator has determined that their space is appropriate for a drive-through and the customer preferences are known, that is when logistics come into play. Matthews suggested conducting a capital cost analysis and proforma to calculate the expected return-on-investment (ROI) as soon as possible.
Once the store is operational, retailers need to keep a keen eye on operations — make sure that your store layout is conducive to your customers’ needs, drive-through employees are thoroughly trained and product offerings have been meticulously calculated.
From there, a lot can be learned from observing other established drive-through programs, specifically from the experienced QSR sector.
“As I mentioned before, the QSRs have figured this out and are now doubling down on this success with multiple drive-through lanes,” said Matthews. “It is a live case study — understand thoroughly how they are executing this and apply it in your c-store.”
Integrating other strategies, such as loyalty, EV charging capabilities and strong foodservice programs can also draw in more loyal customers.
Integrating Tech
For retailers that simply can’t deploy a drive-through program, there are alternatives. A drive-through is a means to an end — that being a potentially quicker, more convenient shopping experience. It’s not, however, the only way to do that.
One retailer that has already impressed the industry with its future plans is a new face in the c-store space, Major Oil. The company recently purchased its first two c-stores of a planned 500. These two sites will initially serve as a research opportunity for the retailer so that it can learn how traditional c-stores are operated, but the plan for the future is more complex.
Major Oil’s format is extremely unique — it’s not the kind of c-store layout you would typically see walking down the street. The company has taken the convenience of a drive-through and made it completely portable and autonomous.
“So (the structure is) going to show up to a property on three flatbeds. We’re going to take it off with cranes and, just like Legos, build it in three days. We’re going to fill it up with inventory and fuel,” said Major Itule, CEO of Major Oil. “We’re going to add EV chargers on the outside perimeters and turn it into a hybrid energy station and be open several days later.”
Transactions could not be simpler. Customers simply tap their card at the door and walk out.
“No employees, no point-of-sale system to deal with. Your credit card gets charged, you go back, you finish fueling up and you’re out the door. The fastest gas station experience in the country,” continued Itule.
Backed by investors, Major Oil plans to open 50-100 stores in Texas and another 400 throughout the Southeast Conference area. All sites will be dubbed Convenience Store Portable Above Ground Stations (CPAGs). This innovative approach to convenience is yet another example of how this industry continues to evolve when it comes to service.
Now, this isn’t to say that retailers need to uproot their c-stores and convert them to autonomous stations — not by any means. But what they can do is look at programs like Major Oil’s and see what kind of ideas they can borrow.
Adding technology like frictionless checkout, EV charging, mobile apps and loyalty programs can help retailers without drive-through capabilities maintain a similar level of service, and customers will appreciate the effort as well.
As the industry keeps marching forward amidst uncertain futures, the one certainty is that it will adapt to whatever comes next.
