7-Eleven Bets on Tech to Redefine Convenience and Entertain

7-Eleven is betting on tech to power its next-generation, hassle-free shopping journey for customers that excites and delights them, too.

It’s turning to features like cash-register-free checkout, product delivery and augmented-reality-fueled gaming and “retailtainment” (think POKÉMON Go) to make it happen.

The chain boasts that while it set the bar in convenience retailing, it’s now pushing to raise it, Tarang Sethia, chief digital officer of the 70,000-store global chain, told CO—.

For the more than 50% of the U.S. adult population that lives within a mile of 7-Eleven’s 10,000 stores in the U.S. and Canada, “We defined convenience, and now we are looking to redefine convenience as [consumers] change and their needs and wants evolve,” Sethia said. “Our customers are looking for speed, value and delight and our plan is to make every consumer interaction valuable and delightful,” he said.

The push comes as a new wave of upscale, tech-driven convenience startups like Alltown Fresh and Bridges General make their way onto the retail scene, courting millennials and health-conscious consumers with fare like organic falafel fritters, craft beer and kombucha on tap in cushy environs with wood inlaid flooring, comfy couches and soft lighting.

Indeed, 7-Eleven, along with national convenience retail rivals like Wawa, is upping its food game as well, touting fresh, healthier fare like its 7-Select brand of “locally made meals” in store.

But the retailer, which has long catered to a core convenience store customer seeking “smokes and Cokes,” also knows that “not everybody needs to have 5,000-square-foot stores and offer organic chick peas,” Pete Trombetta, Moody’s convenience store analyst, told CO—. “There’s a lot of customers looking for the cheapest gas around and maybe they’re looking for POKÉMON.”

That’s precisely why 7-Eleven is building tech-enabled convenience and play into its loyalty program to boost both store traffic and woo consumers that might not have otherwise shopped the chain, he said. App-driven rewards are becoming more important for a lot of companies to create some stickiness in their customers, Trombetta said. “You see it with hotels, airlines.”

‘Skipping the line, every time’

For 7-Eleven today, “Our priorities are to be a customer obsessed, food-and-beverage focused and digitally enabled company and continue to revolutionize customer loyalty,” Sethia said.

It’s tackling that mandate, in part, by reaching out to consumers via all their digital touch points, banking on its 7Rewards loyalty program to catalyze shopper convenience and engagement.

The convenience chain seems to have little choice, as on-demand consumers increasingly navigate their lives and moment-to-moment wants and needs — think Uber, Netflix and DoorDash — through their digital devices.

It’s one reason why 7-Eleven is looking to slay shoppers’ dreaded wait in the checkout line via mobile tech.

The move plays out against the background of Amazon Go, the checkout-free store concept that appears to have lit a fire under merchants from Giant Eagle in the U.S. to Britain’s Tesco, partnering with tech startups to power their own cashierless platforms.

According to a recent study conducted by Forrester Research, waiting in the checkout line is the top complaint among U.S. grocery, mass-merchandise and convenience store shoppers.

“Americans spend 37 billion hours waiting in lines, not all in retail, with a significant amount of that being in checkout lines,” Sethia said. “We challenged ourselves and asked, ‘How do we disrupt this? How can we enable our customers to skip the line, every time?’

“We wanted to go for the fastest and best customer experience, keeping in mind that every customer is walking around with a point-of-sale in their pocket — their smartphone,” he said. “We decided to use a technology platform that customers are already comfortable using to enable a frictionless experience at our stores.”

When testing its mobile checkout platform, which nixes shoppers’ wait in line, 7-Eleven found that its customers craved some kind of payment confirmation as they left the store so that it didn’t look like they were stealing.

The finding inspired the retailer to develop “confirmation stations,” patent pending devices shoppers scan to confirm their purchase as they exit the store.

Available exclusively to rewards members, mobile checkout is now live in 50 7-Eleven locations, and “we are excited to expand mobile checkout to more stores in 2020,” Sethia said.

Now at 25 million members, the 7Rewards loyalty program is central to how the chain both woos customers and understands them, too.

“Relevance is a key driver of customer engagement,” Sethia said. The retailer is mining the reams of data culled from reward members’ physical and digital footprints in a bid to deliver offers that strike a resonant chord. “Artificial intelligence and machine learning allow 7-Eleven to analyze the massive volume of transactions and customer behavior to offer value that resonates with customer preferences,” he said.

Sethia describes 7Rewards — membership has nearly tripled from 9 million consumers to more than 25 million today — as a success story that has had a halo effect on the entire business, Sethia said.

And thanks to “forward-thinking” technology decisions, he says, “7-Eleven teams have taken the company and its customers from a simple loyalty app with generic coupons and a cup-and-drink punch card to a program that rewards every customer for nearly everything they buy, empowering them to choose how they use those rewards and better tailor them to each customer’s individual needs and preferences,” Sethia said.

“Most importantly, the [rewards] program continues to drive incremental revenue and traffic for 7-Eleven franchisees.”

The ’new frontier’ of product delivery

Meanwhile, delivery of products, services and food has become a fierce battleground for the retail, restaurant and grocery sectors, as businesses rush to adapt to consumers’ e-commerce-informed, instant-gratification expectations.

7-Eleven knows this, too. It tiptoed into the service business in 2017 with 7NOW, what Sethia called its “life-changing mobile app,” enabling on-demand delivery of snacks and drinks like organic, cold-pressed juice to toiletries, dog food and diapers, from local 7-Eleven stores. The 7NOW Pins capability was released last year, which enables customers to get their products delivered to popular areas like parks, beaches and stadiums.

"Food delivery is a new frontier for the convenience store sector,” Moody’s Trombetta said. “It’s another way for 7-Eleven to compete better.”

In expansion mode, the delivery service is now available in over 200 cities, serving over 300 million households, accepting Apple Pay and other mobile payment options.

The service, Sethia says, is redefining convenience. “We are there when and where [consumers] need us, by bringing the store to them,” he said. “We are also delivering orders to customers in 30 minutes or less.”

The retailtainment factor

Augmented reality (AR), which overlays digital images onto real world imagery, trotted into the popular imagination in 2016 when a Japanese smartphone game, POKÉMON Go, had grown folks worldwide combing the streets to hunt down virtual creatures via the magic of AR, breaking Guinness World Records in the process.

And although four years on consumer adoption of AR — like an app that let’s you virtually try-on makeup or visualize how a digitally rendered couch will look in your living room — remains relatively low, “Gamification and augmented reality continue to be a key component of the program and experiences we offer,” Sethia said.

Indeed, 7 Eleven is turning to AR to serve up retailtainment that combines play, pop culture and special perks designed to stoke shopper engagement both online and in store via its app and rewards program, Sethia said.

During football season, for example, members can earn points and savings by playing football-themed games or engaging with shareable experiences.

The chain is also partnering with entertainment heavyweights on games and product mashups. It teamed with Warner Brothers last year on the POKÉMON Detective Pikachu film to bring Detective Pikachu inside its stores with collectible, limited-edition merchandise, beverages and food, but also AR games like find the missing POKÉMON while earning 7Rewards points, free 7-Eleven items, exclusive POKÉMON Detective Pikachu sneak peeks and more.

Looking ahead, 7-Eleven expects to announce new AR programs in 2020, but said it couldn’t yet reveal those plans.

“In addition to how we’re elevating the 7-Eleven experience across our more than 9,000 stores across the country and through our technology,” Sethia said, “these types of collaborates are just another opportunity to delight our customers.”

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