Experiences begin online today, and successful convenience retailers must compete with innovation standards that have become the norm for customers. Today, shoppers want what they want, when they want it, and they want it personalized.
The in-store experience is just one touch point. The same positive experience must be replicated when ordering from a brand’s app or website or initiated through a third party such as Uber Eats, DoorDash or Grubhub.
Have you thought about investing in online order/delivery/pickup, but you’re not sure if it’s worth it? Or do you have it today, but it’s not doing much for you? Here are some facts to consider:
- 98% of U.S. DoorDash customers have access to non-restaurant stores. The platform — once just for restaurants — is rapidly expanding across additional channels of retail.
- $31 is the average basket size for convenience retailers on third-party platforms, and this is even higher in areas where tobacco is permitted.
- 5% is the average overall lift in sales when a convenience retailer lists at least 2,000 articles online, organized and accompanied with images.
If this isn’t convincing enough, let’s look beyond our industry for a moment. Chipotle has reported that its restaurants now average over $1 million in annual sales per store that are initiated through mobile ordering. Shake Shack has reported that 43% of its transactions are mobile. While the percentage of its branded app versus third party is not divulged, both brands are part of third-party platforms. Imagine if your brand had half or even a quarter of that.
Third Party vs. First Party
That brings us to our next point of third party versus first party. One of the biggest mistakes I see retailers make is putting all their focus on first party versus third. Sure, we would all like to own our customer data and experience firsthand, but there is a reason why the largest retailers and restaurants such as McDonald’s, Starbucks, Dunkin’, Target and CVS are all part of third-party platforms, even though they have their own app. Third-party platforms are the digital malls that people go to when they are in a need state and, simply stated, you are a part of it or you are not.
Even for small to mid-sized retailers, the technology is there today making things easier than ever to integrate both first- and third-party ordering. Order aggregator technologies can connect through your point of sale (POS), and some products can connect directly to an API (application programming interface), completely bypassing the POS.
These order aggregator technologies link to your Pricebook and directly pass along inventory movements, sales, taxes and markups, without the complexity of tablet farms and non-integrated technologies that you may have seen in the past.
Convenience stores have an unparalleled advantage over other retailers. There is no other segment of business that operates 24 hours or close to it where popular essentials, quality foodservice, beverages and other services are stacked together at quick in-and-out locations. The multichannel experience for our industry opens more doors of revenue from digital sources leveraging additional efficiency of scale. Frankly, this is one of the easiest ways to increase revenue in a meaningful way and build your brand, all while simplifying versus adding complexity to store operations.
Peter Rasmussen is a strong industry advocate, recognized convenience and energy veteran and CEO and founder of Convenience and Energy Advisors (Convenienceandenergyadvisors.com). He can be reached at [email protected].
