Last-Mile Impact on Convenience Retail

Convenience and fuel retailers share how they’re coping with pandemic-related constraints and adjusting to new consumer behaviors.  

August 31, 2020

By Chris Blasinsky

LONDON—Last week on Shop Talk Live, Dan Munford, host of the weekly Global Convenience Store Focus web series, discussed with panelists from the U.K., Dubai and Australia how some of the disruptions seen throughout the global convenience retail industry may become disrupted themselves amid a pandemic climate that has caused massive shifts in consumer behaviors. 

Customer Engagement

Paula Thomas, chief content officer at Liquid Barcodes, shared how Pressbyrån in Sweden is providing everyday rewards to customers with digital vouchers via an online coupon store. This unique ability to “surprise and delight at scale” offers convenience retailers a new way to extend loyalty programs to larger B2B companies or corporations like banking or insurance, utilities, telecom, car dealers or travel and transportation.

She explained that the “corporate coupon” concept makes sense for many reasons, including a need among companies to reward staff or customers with affordable products like the gift of a lunch or a sweet treat. Digital coupons also can be a unique selling point and serve as a differentiator for convenience retailers who invest in this next-level loyalty proposition.

In testing which products resonate most, the winners are treats like ice cream, chocolate and coffee, which consumers often purchase at a convenience store on impulse or as a reward. Companies have found that digital vouchers can change people’s moods and boost the energy in a workplace: ice cream on a sunny day after days of rain or a change in season, for example.

Thomas will share more compelling and creative ways that global convenience retailers are innovating in the loyalty space in an upcoming Convenience Matters podcast that airs on September 28.

Last Mile and Delivery

Sophia Nadur, BP’s e-mobility innovation director, noted that the move toward digital work environments could become more permanent, but we’ll likely see a balance between the physical and digital shopping space related to food and convenience items. “We’ll find a middle ground as people get back out,” she said.

DoorDash’s entry into the online c-store space with its DashMart concept may initially seem like a disruptor in the U.S. market, but Nadur noted that these types of formats have existed for years in global markets like China, Japan and Dubai. “There’s a place for it,” she said, noting that there are many different routes retailers can take to reach customers, and that this is one of them. “I think we’ll end up with different business models that suit different consumer needs and their changing behaviors,” she said. 

Growth in the last mile delivery market will also be fueled by mergers and acquisitions. Dutch company Just Eat Takeaway.com is set to become the world’s largest food delivery company outside China, with the recent acquisition of Grubhub. Matt Maloney, CEO and founder of Grubhub, commented in a press statement that when he found the company the online takeout industry didn’t exist in the United States. Combining Takeaway.com and Grubhub means “that two trailblazing start-ups have become a clear global leader.”

‘Business as Unusual’

In May, Warren Wilmot, CEO of On The Run (OTR), Australia, commented in a previous Shoptalk webinar that the virus had been well contained and measures to close borders between states and social distancing were working. Today, however, some regions in the country are back on lockdown, but overall business has been strong. “July was the biggest growth month I’ve seen in my 28 years in convenience retailing,” he said. Customer counts saw a short two-week decline and bounced back quickly.

Joe Barrett, COO at Applegreen, gave a quick update since his previous Shoptalk webinar in early May, where he said local petrol shops were performing well compared with the company’s motorway operations. Today, the larger motorway sites are bouncing back, as 95% of the food offers are in operation. While customer counts are down, those who are shopping the sites are increasing their basket size. Also, drive-thru business has increased, as well as the number of customers opting for touch-screen ordering that limits person-to-person interaction.

Another positive is that the notion of traditional petrol sites becoming obsolete is no longer true: Barrett said that due to their proximity in communities, these sites have become a hub for locals to shop closer to home.

EV Adoption

The panelists were mixed on whether consumers are embracing electric vehicles. Nadur noted that there could be greater EV adoption as consumers continue to see the impact cleaner vehicles have on the environment. “We could see growth in EVs because of an overall desire to find more sustainable and cleaner transport,” she said.

In the U.K., Barrett noted that EV adoption is greater in cities but less so as you move into the countryside, where consumers prefer diesel-powered vehicles due to greater commuting distances.

In Australia, however, that may not be the case. Wilmot noted that very few EVs have been sold to create much of an impact on the current fleet, and if fuel prices remain depressed it could take some time until consumption increases. And as more Australians holiday within the country, driving distances are significant and would make EVs a less desirable mode of transport with limited recharging infrastructure.

Register for this week’s Shop Talk Live webinar, “Building Future Leaders and Professionalizing the Global Convenience Industry,” on September 4 at 2 p.m. (BST).

Chris Blasinsky is the NACS content communications strategist; she can be reached at cblasinsky@convenience.org, and on Twitter and LinkedIn.

Advertisement
Advertisement
Advertisement