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04/04/2022

Online ordering and delivery are here to stay

Four c-store specific strategies to get it right.
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Taking to their devices, consumers ordered food like chips, pop and other snacks and had it delivered in record numbers during the pandemic. And while its growth may not be as stratospheric as at the height of lockdowns, ordering food via apps, websites, etc. has become a normalized shopping behaviour, and is set for strong double-digit growth in each of the next few years.

In fact, digital food ordering is set to grow by 17% annually until 2025, according to PYMNTS.

Paytronix, which provides engagement solutions and loyalty programs for convenience stores, recently hosted a webinar, The State of Online Ordering, about the opportunity for the sector. It broke down online delivery orders into the “four Ps” – Product, Price, Place and Promotion – and outlined what you need to know in each of these categories to cultivate a strong connection with both existing and new customers.

1. Product – the menu

According to a study by NACS (the U.S.-based National Association of Convenience Stores), 60% of convenience retailers place restrictions on menu items for order and delivery.  This can be for a host of reasons, like the practicality of delivering a particular item.

It can also be a temporary measure.

Ryan DiLello, a content specialist at Paytronix, says it is best practice to pause incoming order and delivery orders when rushes threaten to overwhelm staff and compromise customer satisfaction levels. This can be done through menu throttling software compatible with both your own channels and third-party apps. The trick, he says, is “knowing when to turn off your online menu and block orders to prevent kitchen backups and order errors. “

2. Price – delivery costs

Whether you’re fulfilling orders for delivery through a third-party aggregator like DoorDash or raising an in-house fleet, there is a cost to that, and c-store operators can struggle with how to best pass that expense onto customers.

A good rule of thumb? According to NACS and Hathway, delivery premiums between 1% to 5% “strike a good compromise between cost and convenience,” says DiLello. “Then you'll want to consider whether you pass along that premium as a fixed cost, a percentage of order or some other configuration.” Financial modeling and/or customer surveys can help identify your customers’ preference, he says. “There's not too much of a cookie-cutter approach if you choose in-house [delivery capability].”

Most third-party aggregators, however, charge a set cost. In this case, offset the commissions by raising your menu prices rather than with an eye-popping delivery fee. DiLello says studies show “customers don’t mind spending more on the food price,” but “tend to be less flexible and sympathetic about delivery prices.”

3. Place – sign of the times

Be sure the store is set up for success. That includes ensuring frontline staff is fully trained on your online order system and delivery solution. “We like to say here that a bad program managed well is better than a good program managed poorly,” says DiLello. Use signage to handle increased traffic from online orders or consider building a special pick-up window. “Signage helps traffic move in an organized and efficient fashion, designating where they need to go, from a customer coming in to pick up an order to a third-party aggregator or delivery driver grabbing something and heading out the door. Keeping those lines of traffic moving can be the difference between a really packed, chaotic, c-store and a smooth-running one.”

4. Promotion – connect where they are

Your audience is online, whether tethered to their mobile device while on-the-go or at home surfing the web. Communicate to them that way, too, advises DiLello. “Notify them through email, social media campaigns and other current channels like mobile apps,” he says. But have something meaningful or of value to communicate. It could be, he suggests, a discount to first-time delivery customers or to existing customers who refer a friend to make a delivery order. But don’t neglect the store; that’s a high-traffic area you’re free to promote the service in!