To see the original publication of this article visit CSP Daily News ‘The State of C-Store Distribution’ Magazine.
Plenty of convenience stores and gas stations shied away from last-mile services and other e-commerce offerings before the COVID-19 pandemic. After all, launching curbside pickup or contactless checkout adds a layer of operational complexity to an already complicated business. Not to mention the fact that the c-store business model is built on getting people inside the store.
But when fear of infection and shelter-in-place directives kept people home, many retailers felt obliged to offer e-commerce options or risk losing potential revenue. Fast forward to today, and the reasoning behind touchless retail has become less clear.
Will last-mile revenue hold now that someAmericans are returning to work? Will there be a boost in foot traffic in the store?
CSP spoke with MikeWelsh, Chief Creative Officer for Mobiquity, that helps retailers including Wawa and Kum & Go navigate the digital space, about the changing times and how to meet them.
The operational challenges from last- mile services could hinder retailers if they do not prepare to meet them in advance, according to Welsh. He says employees making deliveries or answering customer service phone calls especially need to be prepared with the tools they need for the job. “If you don’t get those presets done, what ends up happening is your labor costs can go through the roof,” says Welsh. Another way to ease the process for employees or delivery drivers is to use a system that allows them to alert customers when they have arrived, such as an in-app notification system or geofencing.
“The trick is making sure that your operation is as efficient as it can be, which means you need dashboards and data, and you need analytics,” says Welsh. “You need to plug all that stuff in before you flip on the switch for curbside.”
Without these preparations, says Welsh, employees are stuck troubleshooting problems instead of getting products to customers. “And that tends to be something that when we see clients run into trouble, it’s because they’ve gone ahead and done something first when they should have gone and done the planning, operations, call center, employee training, which is always the non-glamorous painful stuff, but it is the plumbing part that makes this go,” says Welsh.
Wawa, for example, kept curbside operations simple by making every parking spot in its lots a potential pickup area instead of limiting the pickup area to a few parking spots. “It doesn’t make people have to jockey for position and parking,” says Welsh.
That’s not to say there’s only one way to execute curbside pickup. Different store formats require different last-mile implementation strategies, says Welsh. For instance, stores by the highway might consider moving pickup areas to the backcourt so trucks can navigate the forecourt more easily.
Welsh says different climates also require different considerations. Managing curbside pickup during winter in the Midwest requires more preparation to keep food warm. “In [New] Jersey they pump your gas, but that guy pumping your gas because of OSHA guidelines may not be able to go in and go grab food without going in and scrubbing his fingerprints off his hands,” he says.
While use of last-mile services and e-commerce options might ebb and flow, Welsh says it’s unlikely consumers would be happy losing options once they are implemented. He says people have adapted to a new way of doing things and new amenities. “But people that like to go in and get their coffee every morning that have a conversation and relationship with their associates, they will continue to return to that,” says Welsh.
He adds that offering customers a variety of mobile payment options is important to make e-commerce successful. Different people use different payment services, he says, and more options to pay means more people will use the service. “I’m a Venmo dad,” says Welsh. “I have three daughters. I have to Venmo them every three days. ‘Hey dad, I’m at the gas station. Can you Venmo me something?’”
While Welsh is not generally a believer in loyalty programs, he says a healthier way to think about them is membership programs that require continuous management. “Meaningful membership programs that have tiers, that have a level of thoughtfulness in them—consumers feel that. They get that and they hang onto that,” he says. “Give me more control over it and I’ll consume more from the business.”
That feeling of control is important for consumers, says Welsh, and giving consumers plenty of options is one way to give them some control. “Payment is really something that companies have to get around where that customer is at the center of the decision-making, not the business,” says Welsh. “What’s convenient for a c-store company may not be convenient for the consumer.”
He also recommends retailers focus on the customer experience after they have made their transaction and are on their way in order to bring them back. He says relevant, targeted offers are important to the idea of a membership program that consumers feel works for them.
With e-commerce and last-mile services becoming less a tech add-on and more a part of a store’s operations, Welsh says it’s time for c-store retailers to start thinking like online businesses. “Treat your store like an e-commerce platform,” he says. “Stop treating it like a plan-o-gram.”
Amazon democratized the idea that consumers could make purchases in the physical world as easily as they do online with its “just walk out” technology, says Welsh, and some retailers are already moving in that direction.
Wawa, he says, is “building an ecosystem and a platform that will give them lots of opportunity in the future.” He is also impressed with the frictionless fuel payment system at Alltown Fresh, which allows fuel customers to pay digitally for gas using their tollway transponder and texting. Also, “Kum & Go is out there with pump activation, and now they’re doing pickup and order in-store,” he says.
“There are a lot of fast followers out there,” says Welsh, “and I think the instinct might be to go with what you know as opposed to taking that risk. And I think that’s something that will show in the quarters ahead. The ones that have made the investment, taking the risk, are seeing the benefits.”
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