Drivers Welcome

With QSRs and on-demand services upping consumer expectations, should convenience retailers reconsider the drive-thru?

By Frank Beard

There’s a war for convenience in today’s marketplace. From app-based delivery to same-day shipping and services that transform ride shares into mobile convenience stores, everyone is trying to get closer to consumers.

As convenience retailing continues to invest heavily in foodservice, this raises a question: Should companies consider adding drive-thrus? Although the concept originated back in 1948 with In-N-Out’s promise of “No Delay,” it’s evolved greatly over the years. Today, nearly every quick-service restaurant competitor operates a drive-thru. Perhaps convenience retailers should take a closer look.

Is It Really Quicker?

It has been my personal experience—and I suspect many readers would agree—that walking into the convenience store generally is quicker than waiting in a drive-thru line. After a few heated discussions on the issue, I even put it to the test.

For five consecutive weekdays during May 2017, I visited three convenience stores and three quick-service restaurants (QSRs) around Des Moines, Iowa, between 7:00 am and 9:30 am. The experiment was simple. I tracked how long it took to purchase one breakfast sandwich from the moment I exited the road to the moment I left the parking lot. (I donated all sandwiches to a local food bank.)

I set my stopwatch and found that, on average, convenience stores were 2.74 times quicker. My visits clocked in as follows:

• Average of all 15 c-stores: 2:00

• Average of all 15 drive-thrus: 5:29

• Quickest c-store: 1:24

• Slowest c-store: 2:35

• Quickest drive-thru: 2:01

• Slowest drive-thru: 13:32

While the difference between the speediest and slowest c-stores was only 1:11, for drive-thrus there was a less reliable range of 11:31. Convenience stores were the clear winner, but many of the slowest drive-thrus suffered from operational inefficiencies or management issues. For example, I was told to pull forward and wait at a McDonald’s location when no Egg White Delights were available, but I would have gladly substituted an Egg McMuffin had I been given the choice.

The truth is that drive-thrus are quick and convenient when they function properly. Indeed, the QSR Magazine 2017 QSR Drive-Thru Study found that the average wait time at McDonald’s was 239.03 seconds—approximately four minutes.

For many consumers, a few extra minutes at a drive-thru is likely worth the wait. A 2016 survey by Cincinnati-based Frisch’s found that 42% of consumers choose the drive-thru because they don’t feel like parking or walking inside. Additionally, nearly one-third of millennials do so because they don’t like dealing with people.

Drive-thrus are also convenient in a way that delivery is not. They’re positioned along existing consumer journeys—including the daily work commute of 135 million American drivers, according to a PYMNTS/Visa Digital Drive Report—and the industry’s average wait time of approximately 3:45 is something that no delivery service can match.

However, many retailers have struggled to implement this model. I spoke to a representative of one major company that operates only a single drive-thru location and remains uncertain about its future. Others expressed a mixture of optimism and skepticism. Experts who’ve worked with QSRs, however, had much to say.

Deceptively Simple

Convenience store drive-thrus are in their infancy, according to Howland Blackiston. As principal of King Casey—a premier retail consulting and design firm—Blackiston has worked with leading QSRs to refine their drive-thru strategies.

“Many retailers make the mistake of thinking they can glue a drive-thru onto an existing store, but it doesn’t work that way,” he explained. “You have to understand that QSRs have evolved this model for decades. You have to plan carefully and get the basics right the first time.”

Consider store layout. QSRs rely on duplication of equipment and separate operations using a front-of-house and back-of-house model. This keeps employees from running back and forth and wasting time.

They have also mastered the process of selling at the drive-thru. Leading brands separate the entire process into a collection of customer operating zones—addressing specific needs and behaviors at the approach, entry, pre-order, order, pickup and pay, and exit zone.

But newcomers can still catch up. Blackiston points to Starbucks as an example. The chain originally provided a bland, non-proprietary drive-thru experience that failed to extend its brand outside the store. Starbucks quickly leapfrogged through best practices, however, and today it is recognized as an industry leader.

The Starbucks order zone is a prime example. Although new video screens reflect the in-store experience by providing two-way communication with baristas, they also address a longstanding problem.

“When you go into the store, you can see what’s in the bakery case and point to it,” said Blackiston. “But those items often sell out. This caused a lot of grief at the drive-thru since they had to tell customers, ‘Sorry, but we’re out of that.’ By using the screen at the order zone to showcase what’s available, Starbucks was able to adjust their messaging and avoid frustrating customers. This saved time and boosted sales.”

Starbucks also uses effective zone communication. By the time customers arrive at the order zone, they’ve encountered the entire menu board throughout the journey. Not only does this give them something to look at other than tail lights, but it speeds up the process.

Blackiston describes the menu board as the primary communicator. Many brands, he said, mistakenly design it aesthetically rather than strategically. This is often done with good intentions by the company that builds it, but it lacks necessary subtleties.

“Small tweaks to your strategy can drive enormous sales,” he explained. “When we worked with Starbucks to refine their drive-thru menu board and communications, the sales increase was so dramatic that they authorized the largest capital expenditure in the company’s history to implement the new strategies throughout the system.”

This sentiment is echoed by Alicia Mowder, a consultant within the restaurant and convenience store space. Mowder previously spent five years with Sonic and helped refine its drive-thru menu strategy.

“Sonic is unique because they have a lot of products,” Mowder said. “The menu is so expansive that it created a problem at the drive-thru. Many customers already knew what they wanted, but what if someone didn’t? They could cause the line to back up just by looking at all the flavors.”

Mowder said Sonic eventually optimized the process by significantly reducing the drive-thru menu.

What to Offer

Convenience retailers face a similar dilemma: Do you offer everything at the drive-thru, or do you limit the menu?

“Offering everything is a nice aspirational goal,” said Blackiston. “It’s great if you can figure out a way to do it. But if you’re just getting started, you need to focus on foodservice.”

C. Joseph Richard has worked with retailers to implement both approaches: convenience products and foodservice. As principal and founder of Architects Plus, he has extensive experience designing drive-thrus that work.

“Offering everything can be a challenge,” he said. “When retailers try a drive-thru without having done one before, it’s easy to struggle to the point where they shut it down. This often happens because they have employees running back and forth for items and increasing wait times. You have to keep the line moving in a way that makes money and keeps the customers satisfied. It’s kind of like the QSRs that ask you to pull through and wait. If they do that too much, their customers won’t come back.”

One solution is to stock key items on duplicate racks near the drive-thru. I reviewed a store design that has a fountain dispenser, slushie machine, point-of-sale system and merchandising rack. A separate row of coolers also was visible to drivers through a series of large windows.

“Beyond additional equipment, you have to have an extra person working the window, so consider limiting what you sell,” said Richard. “Let’s say someone wants a six-pack of beer but also asks for Q-tips. Now your employee is running around the store, and the customer might get frustrated and leave. One person cannot handle all of the products at once. The delay is too much.”

I reviewed another store design that focuses on foodservice. Although it featured a duplicate cigarette rack, fountain dispenser and register, the kitchen was effectively a shared space between the drive-thru and the store. This helped increase efficiency and utilize the store’s limited footprint.

“We see a trend where some retailers mix foodservice with popular convenience store items,” said Richard. “But if you’re doing foodservice and you have enough land, a drive-thru is one of my first recommendations every time. Otherwise you risk cutting your foodservice sales in half.”

But it seems a parallel exists between beginner foodservice and drive-thru challenges. I’ve previously written about rookie mistakes such as investing in indoor seating only to avoid wiping down the tables after customers leave. Alicia Mowder recalled a similar story.

“I recently ordered cold brew from a convenience store, but I struggled to find it on the touchscreen,” says Mowder. “It had many different sections, so I clicked on iced coffee. It wasn’t there. I tried another section, and it wasn’t there either. I finally asked for help, and it turns out that cold brew was clear at the bottom in its own section. If someone like myself has to ask for help to find a product that’s advertised all over the building, that’s a problem.”

It’s about being optimized, she explained. “If you’re still figuring out foodservice, it may not be the right time to tackle drive-thru. The worst thing you can do is add one when you’re not ready.”

When the Drive-Thru is the Store

Some retailers such as Parker’s in Savannah, Ga. and Square One Markets out of Bethlehem, Pa. have found success with drive-thrus, but few have embraced the concept as strongly as Swiss Farms. “Everything in our stores is sold through the drive-thru door,” said CEO Scott Simon of the Pennsylvania-based 12-store chain. “It’s been our core business since 1968.”

Two separate lanes pass along both sides of the stores—most of which are between 500 to 700 square feet. Floor-to-ceiling windows provide customers with a view of products as they wait in line. It’s an efficient model, Simon said. “The sales we generate per square foot are as good as it gets. One consultant surveyed our operation and said, ‘Don’t change a thing.’”

And yet, Swiss Farms continues to evolve. It recently introduced a mobile app that enables customers to order products ahead of time—including made-to-order food, such as cranberry chicken salad. The app allows customers to earn $1 in credit for every $20 spent and makes it easy to track rewards and receipts. More recently, the store introduced a third “e-commerce” fast lane. Customers who’ve already placed their orders via the app or on the Swiss Farms website can skip the lines and have their orders brought to the car.

However, Swiss Farms understands that there’s more to a drive-thru than speed. Customer “amazement” has become an essential component to the company’s success. “When you go to someone’s car window, you’re getting into their personal space,” explained Simon. “That has to be an amazing experience. Besides, we’re devoid of intimacy today. Everyone wants to look at their phones and avoid talking, but we want to talk to you. Swiss Farms is a place where you come for the experience. We say during the interview process that if you want to work here, you have to enjoy talking to people.”

The retailer is also testing delivery, with plans to begin at a single location. “We’re centralized, and we can start small and expand to two, three or more stores,” Simon said. “We’ll let the customers dictate the demand.”

Is the Time Right?

It’s clear that the drive-thru playbook has not been written for convenience retailers. I suspect that it will take additional experimentation and perhaps even failure. However, it seems retailers would be mistaken to dismiss the concept.

“We’ve seen a blending of competitive space in the past few years,” said Alicia Mowder. “Any QSR that doesn’t see convenience stores as a threat, or vice versa, misses a big part of what that competition is about. Drive-thrus will become part of the game as this trend continues.”

“This new generation of consumers is very willing to purchase food at convenience stores,” said Howland Blackiston. “They have to be clean and presentable, but they also have to go beyond the basics and dazzle the customer by delivering something they didn’t expect. The first retailer to get that right will blow away the competition.”

“But there are QSRs doing 50% to 70% of their business at the drive-thru,” he continued. “That ought to tell you something.”

Originally published by NACS Magazine. Republished with permission.

Frank Beard is a speaker, writer, and industry advocate who serves as an analyst/evangelist for convenience store trends at GasBuddy. Beard regularly contributes to NACS Daily and NACS Magazine. Follow him on Twitter at @FrankBeard.

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