Technology | Mobile Ordering & Delivery
WHAT DO DELIVERY SERVICES REALLY DELIVER? How do delivery services fit, or not, in a convenience store distribution strategy? Richard Crone • Crone Consulting LLC
Should your convenience store embrace third-party, aggregated delivery services? As the pandemic stretches on, it’s time to re-examine the pros, cons, risks and costs. Could the pros of paying others for delivery services, ostensibly justified in net-new incremental sales, be far outweighed by the cons of unknowingly donating your SKU-level sales data to thirdparty intermediaries that use it to their own gain? Understanding how they use this data is paramount to updating your own distribution strategy and reducing the risk and cost of supporting these services, if at all. As with home buying, the top three differentiators for convenience stores are timing purchase and traffic patterns with their ‘location, location, location’ (which is the alpha and omega for defining any distribution strategy). For the 81% of convenience stores supporting it, fueling is the driveway to their location advantage, 62
CSTORE DECISIONS •
February 2022
putting potential customers less than 15 to 45 feet of a door-swing to their convenience store. A convenience store’s location advantage is further bolstered by the fact that their biggest competitors, such as restaurants, grocery and dollar stores, don’t typically offer fuel. Prior to the pandemic, the average consumer fueled their vehicle about once per week. Convenience stores have a long history of monetizing this touch point, with The National Association of Convenience Stores (NACS) reporting that 48% who fuel their vehicle enter the convenience store, and of those who enter the store, 53% buy at least one beverage. NACS also reported that “cumulatively, the U.S. convenience store industry alone serves nearly 165 million customers per day, and 58 billion customers every year.” Most convenience stores make more money on the slotting, placement and trade promotion revenues for the products they stock than they do in EBITDA, all premised on door-swings for their location.
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