Coffee Service

Pandemic pushes convenience services operators to e-commerce

COVID-19 has given a new urgency to the need to serve customers when, where and how they want to be served. Those convenience services operators who offered an e-commerce service prior to the pandemic are finding themselves in a better competitive position.

Image courtesy of iStock.

November 9, 2020 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

When the National Automatic Merchandising Association embraced the term "convenience services" several years ago, the industry that had long referred to itself in other terms recognized the American consumer had taken full control of how, when and where she or he wanted to be served.

By that time, many service providers already recognized the need to be more flexible in how they delivered their products and services, whether it meant delivering products on a scheduled basis or allowing customers to place orders online and have them delivered.

The COVID-19 pandemic has since given a new urgency to this mandate, particularly the need to deliver online orders. Those operators who offered an e-commerce service prior to the pandemic found themselves in a better competitive position than those who did not.

Last week, a panel of industry experts observed during a webinar that convenience services providers must adopt what's known as "omnichannel retailing" to survive against e-commerce retailers such as Amazon.

What is omnichannel retailing

Panelist Aja Pascale, co-founder of Supply Wizards, an online ordering platform for delivery services, described omnichannel retailing as an "intention to create a seamless customer experience" whether online or in person.

"The more channels you give your customers to engage with you in, the more they buy," Pascale said during the webinar, "Expanding delivery services with an integrated e-commerce platform."

"We don't mean that you have to be everything to everyone and be everywhere," Pascale said. "What we do mean is that you have to be where your customers are so that they can buy from you."

The office coffee service buyer now is a millennial, and they are expecting the same experience they have with office supplies, their personal shopping experiences, with their OCS ordering, said panelist John Hickey, co-founder, Tech2Success, a provider of online ordering and connectivity services.

E-commerce pioneers reap benefits

The operators who already had online ordering when COVID-19 hit were able to sell products customers wanted like hand sanitizer, which became one of the top five selling products on the online ordering sites he manages, Hickey said.

"It didn't take an extreme effort to let the customer know they had hand sanitizer," Hickey said. One in 10 orders had a promoted product added when promoted online.

For panelist Mike Brown, president, PGI Services Inc., a Salt Lake City and Denver based convenience services operation, COVID-19 has made it paramount to offer customer online ordering.

How to begin

One of the biggest challenges for a convenience services operator interested in adding delivery, according to Brown, is finding a software platform that will integrate delivery with the company's vending management system rather than having someone manually enter the delivery information into the VMS.

Brown said he also wanted a system that would give the end user the ability to see where they are in their budget on a given week or month. Prior to implementing an online ordering software that includes this capability, he had to send customers confusing budget reports in Excel spreadsheets.

The e-commerce software also offers a visual tool that gives the customer more visibility of all the products available, he said.

To this point, Pascale added that the ability to demonstrate product with photos is very instrumental in the customer buying decision.

Order process management

The biggest consideration when selecting an e-commerce software is order process management, Pascale said. Who creates the order? Where does it go? How does it get to my warehouse? How does the driver pick up the order? A centralized order process platform consists of customer data (location or business serviced by the operator) and integrates with the e-commerce platform, warehouse management data and the VMS.

To get started, identify who you are selling to, what your e-commerce goals are, how you will measure success, and then identify your options, Pascale said.

"If I turn over ordering to my customer, I want to know my customer's going to keep ordering," she said. "What do I do to make sure that they're going to repeat their order?"

What's the ROI?

Another benefit of online ordering is the return materializes quickly.

Hickey said if an operator has set goals, ROI naturally takes effect immediately because orders are coming in and order reminders are going out. "You're gaining the order, your gaining more of the order. Immediately there is an ROI to it."

One survey found 80% of customers introduced to online ordering will place their orders that way right away, Pascale said.

E-commerce benefits at a glance

NAMA provided the following list of e-commerce benefits:

Offer a personalized digital experience for customers including credentialed log-ins, customized pricing, personalized promotions and customer insight into their spending.
Increase revenue by promoting and introducing products, use machine learning to cross sell and build orders, liquidate unneeded product and win new customers who did not realize what they could get from you.
Decrease costs by eliminating manual entry of orders, save time, reduce errors and shift low volume customers to self service.

"If you, as a convenience services operator, can make product changes on the fly, you position yourself very well competitively," said panelist Laura Durkheimer, vice president, product, USA Technologies Inc., a cashless services and vending management software provider.

For an update on how the coronavirus pandemic is affecting convenience services, click here.

Image courtesy of the National Automatic Merchandising Association.