7-Eleven innovates in the style of Starbucks to adapt to the pandemic

7-Eleven’s not a quick serve restaurant chain or an e-commerce marketplace, but it still found substantial use for its app as a way to quickly address the health worries of its customers.

The convenience brand in the past few weeks has added mobile order and pay and doubled its delivery footprint, addressing what its research concluded is a wish among its customer base to avoid crowds whenever possible. 7-Eleven is also turning to voice assistants and Amazon Go-style checkout-free stores, suggesting these concepts may have a broader addressable market than the technology-centric locales that have dominated early deployments.

“7-Eleven was classified as an essential business, and found many customers shopping at our stores for groceries to avoid crowds at larger supermarkets and big box stores,” said Yaqub Baiani, director of digital product management for the Irving, Texas-based chain.

Called 7NOW, the mobile delivery platform tied to 7-Eleven’s app allows consumers to enter their location details, select “pickup,” and then add items and authorize payment. The app tracks the order and provides the nearest location, and consumers show a four-digit code to store employees to pick up items. The mobile technology was built internally, though 7-Eleven partners with Postmates, DoorDash and other couriers to support delivery.

Mobile ordering is being added to 7-Eleven's delivery service, which was recently expanded to about 2,000 stores in more than 1,300 cities. 7-Eleven’s buildout of mobile features includes a pilot of Siri voice contactless payments at fuel stations in Dallas, Orlando and Virginia, along with an integration with incentive marketing. It’s also testing a checkout-free store at its headquarters in Texas.

7-Eleven

7-Eleven introduced delivery in 2017, and the expansion covers 75% of its store footprint with a target to reach the entire chain. The company did not disclose the percentage of its overall business that comes through the mobile order and pay service, nor did it say when its checkout-free store would open. “Customers are looking for frictionless and contactless shopping experiences, which have only been heightened by our current environment,” said Baiani.

7-Eleven’s checkout-free store is 700 square feet, and is accessible via the chain’s app. 7-Eleven used internally developed sensor technology and algorithms to identify consumers and the items they remove from the shelves.

“The consumers can seamlessly walk in and out of the stores without scanning each individual item,” Baiani said.

The checkout-free store builds on existing mobile scan and pay technology that’s available at stores in Manhattan, Long Island, Dallas and Utah. In those environments, shoppers scan bar codes to add items, then pay with a mobile wallet or a linked debit or credit card. The feature also ties to incentive marketing, and location sensors place the items on the shopper’s app when entering the store.

Amazon Go is the most recognizable checkout-free retail project, though there are others as retailers — mostly grocery stores at this point — experimenting with different types of autonomous shopping to speed checkout, compete with Amazon and reduce crowding inside stores.

Starbucks, which built an early base of mobile app users due to its coffee and commuter-heavy model, has shifted development of its new store concepts into high gear as part of its coronavirus recovery plan. It’s focusing on smaller stores for mobile order and pay while trying to maintain its existing network of larger stores.

7-Eleven’s mission and general demographics are different than both Amazon and Starbucks, but the companies have a similar response that focuses on several different initiatives. Amazon, for example, is also placing new payment technology inside shopping carts, so it’s not just focusing on Amazon Go.

“The more you plan now, the more opportunity is there,” said Duncan Sandys, CEO of P20, a cross-industry group that just released a study on payments in the post-COVID-19 world, including input from a range of payment companies and financial services executives.

Beyond the push to contactless and e-commerce that has been one of the main results of the pandemic’s response, the study also showed the need for flexibility, and an ability to recognize future crises that may not look like the most recent challenge.

The lockdowns and stringent business requirements came quickly and weren’t anticipated, Sandys said, showing the need to develop and push several different options to change business operations, back offices, and customer-facing services such as shopping, ordering and payments.

“When a crisis hits you won’t be running around like a headless chicken,” Sandys said.