The Conexxus Vision Group (CxVG) has released its Vision Report, “Third-Party Delivery: A Double-Edged Sword?” The report contains CxVG Views, an executive summary of a discussion on third-party delivery services, the full meeting transcript, and additional resources.
The CxVG quarterly meeting on January 28, 2025, was facilitated by James Maxey, an industry technology expert and Trinity University faculty member. Jeff Keune, principal consultant at 4910 Consulting LLC, presented a case study on third-party delivery from his most recent role at American Natural, a 6-store convenience retailer specializing in healthy food options, coffee, plant-based merchandise and fuel.
Key takeaways in the Conexxus Vision Report include:
- Exploring Third-Party Delivery: The report highlights the increasing usage of delivery apps, especially among younger generations, with DoorDash leading the market. “These generations are used to everything being online, and I honestly do not believe that incremental price increase will change set-in behaviors because we’re training a whole generation of people to search online first,” remarked Kristina Anderson, chief service officer, Midwest Petroleum Company.
- Foodservice, Party of Three? The report addresses the profitability and operational challenges of integrating third-party delivery services, including commission fees and system integration. “You’re already giving 20% of your top-line to DoorDash. And you’re adding up 4 or 5 points with Vroom,” stated Lonnie McQuirter, Director of Operations at 36 Lyn Refuel Station, highlighting the financial trade-offs.
- Consumer Appeal: Menu selection and tailoring offerings to maintain a unique brand identity is important, while managing customer expectations regarding food freshness in delivery. “We felt that the consumer didn’t necessarily expect [their food] to be hot and fresh. We didn’t really have much control over the time of the drivers,” said Jeff Keune, principal consultant, 4910 Consulting LLC. Gray Taylor, Executive Director for Conexxus humorously added, “It’s going in the microwave when they get it, anyway.”
- Marketing and Loyalty Strategies: Effective marketing strategies, such as leveraging visual platforms like Instagram, and the challenges of integrating third-party ordering data with loyalty programs are important. But it isn’t always that simple. Rob Razowsky, CEO of Rmarts LLC, related his stores’ delivery experience, noting that in major metropolitan markets, people already have preferred quick-service restaurants, making it difficult and perplexing for convenience stores to break into the delivery space. “We’ve tried DoorDash in a couple of locations. It seems like the hours that DoorDash was working were fringe hours when we had limited labor, and I don’t think we got to $20 for an order,” Razowsky shared.
