Online delivery startup Gopuff, for example, reached a valuation of $15 billion during the summer of 2021. Daniel Folkman, Gopuff’s senior vice president of business, explained people’s expectations are changing in a way that’s positioning the category for long-term growth.
“Consumers want to continue to live their lives uninterrupted,” said Folkman.
Delivery is very difficult to execute.
Jeff Lenard, vp of strategic industry initiatives, NACS
In Adweek’s email exchange with Marissa Jarratt, 7-Eleven’s chief marketing and sustainability officer, she described delivery as a “key strategic initiative for us to provide convenience to our customers, whenever and however they want it.”
7-Eleven debuted its proprietary delivery app 7NOW in 2018. Sales soared during the pandemic, and 7NOW is currently available in 45 cities across the country. To increase the retailer’s online presence, 7-Eleven has also partnered with the likes of DoorDash, Postmates, Grubhub, Instacart and Uber Eats.
Still, the economics of delivering a chocolate bar or bag of potato chips aren’t great. Plus, if consumers have to pay double the price to cover tips and fees, the total cost can alleviate impulse buying.
As Lenard put it: “Delivery is very difficult to execute.”
Electric vehicles
Last year, U.S. convenience stores generated $814 billion in sales. Two-thirds of that came from fuel.
With electric vehicles now accounting for more than 5% of new car sales in America, many experts see mass adoption coming down the road. Sure enough, a recent survey from Pew Research Center found around 4 in 10 Americans are likely to consider an EV when purchasing their next vehicle.
The trend spells trouble for convenience stores in two ways. First, many EV owners are likely to charge their vehicles at home, meaning there’s no need to visit the local station. Second, chains wanting to attract consumers with EVs will need to invest in building the infrastructure necessary for charging them.
“Gas is going to become less of a revenue source, so they need to find ways to replace that revenue stream,” said Katie Hansen, a senior analyst covering retail and ecommerce for market research firm Mintel.
Although still in the early stages of transformation, 7‑Eleven and Alimentation Couche-Tard, parent company of Circle K, have began rolling out charging stations across the United States in recent years.
On this front, however, Circle K has an advantage. Through an acquisition made in 2012, the company operates hundreds of charging stations in Norway, a country with a high density of EVs. This gives it a head start on solving the challenges that come with supporting the change in how people get around.
“They probably have worked through all of the problems they could run into as you get the infrastructure right,” said Diana Rosero-Pena, a consumer staples analyst at Bloomberg Intelligence.
Kevin Lewis, Alimentation Couche-Tard’s CMO, called the company’s presence in Norway a “living laboratory.”
Fresh food
“Consumers are making more conscious decisions about their health and want to be able to select better-for-you options wherever they shop,” reads a recent industry report from Mintel.