LAS VEGAS — 7-Eleven Inc.’s eighth annual convention and trade show, the 7-Eleven Experience, brought record attendance of more than 8,500 franchisees and corporate employees to the MGM Grand in Las Vegas in early February to highlight new programs, products and services coming to many 7-Eleven convenience stores around the country this year.
- With more than 9,300 locations, Irving, Texas-based 7-Eleven is No. 1 on theTop 40 update to CSP’s 2019 Top 202 ranking of U.S. c-store chains by number of retail outlets. CSP will release the complete 2020 list in June.
This year’s theme was “We’re all in.”
Along with the trade show, which featured nearly 300 of the retailer’s vendor partners, the 7-Eleven Experience also included speakers, sessions and workshops and a learning center that showcased the latest food, beverage and merchandising equipment and technology that the chain has developed for its stores. Also, experts were on hand to answer questions on topics such as accounting, maintenance, equipment, simplifying store operations and more.
The event is an opportunity to “get everybody together and really energize the organization,” 7-Eleven President and CEO Joe DePinto told CSP Daily News in Las Vegas. “More than 70% of the franchised stores are represented. What I shared with everybody today is a strategy we’ve been working on for quite a while.”
The company also honored franchisees who achieved Emerald Status at the Brand Excellence Emerald Elite Gala. “It is our goal to support franchisees by providing them with the resources and feedback necessary to give customers a best-in-class experience," said Chris Tanco, executive vice president and chief operating officer. "Honorees are franchisees who consistently exceed customer expectations and score impressively on our customer experience scorecard."
During the general session, DePinto and other company executives talked about progress in the company’s transformation into a “customer-obsessed, food- and beverage-focused and digitally enabled organization through the addition of innovative platforms, coffee upgrades, 7Rewards, 7Now, mobile checkout and more.”
Highlights of the event included …
1. Food and beverages
Expanding the brand’s food and beverage business is a top priority, DePinto said, especially its proprietary beverage business. “There’s a lot going on there, from our coffee improvement initiative to self-serve roller grill, self-serve hot cases and bake in-store,” he said.
7-Eleven is transforming its food and beverage business with new, state-of-the art equipment.
The plan is to introduce a new coffee strategy in 2,900 stores this year, said DePinto. The company has already rolled this out in more than 200 stores on Long Island in New York, 7-Eleven’s biggest coffee market. Proprietary beverages include espresso, cappuccino, nitro, cold brew and iced teas, prepared with bean-to-cup, soft-heat and other technologies.
The chain will also offer several new limited-time Slurpee flavors throughout the year.7-Eleven also is testing new foods such as sliders in Buffalo chicken, cheeseburger, pulled pork and smoked turkey varieties, as well as chicken skewers. And it has installed bake-in-store equipment in more than 1,100 locations for customers wanting freshly baked cookies, pastries and croissants. The company expects the smells alone to be a powerful marketing tool.
2. Private label
Another strategy for 7-Eleven is expanding the assortment of merchandise, particularly in private brands. The chain offers 1,800 private-label products, including packaged food, snacks, candy and beverages under the 7-Select name; nonfoods such as health and beauty; and electronics and other general merchandise under the 24/7 Life name.
“This is an area of our business that we’re really encouraged about,” said DePinto. “Customers are telling us there are opportunities for name brands, like better quality. We said OK, we’re going to deliver better quality at a better value, a lower price. The interesting thing is, the margins are higher. It will be a billion-dollar business this year.”
Each year, 7-Eleven improves about a quarter of its proprietary products, the company said. It will completely reinvent them, from formulation to packaging. Sometimes it will even change suppliers.
“We think it’s a good business, and the reason the business is doing so well is the culture that has been built around great quality,” said DePinto. “If you look at some of the folks who have been really successful with private brands—Costco with Kirkland Signature, for example—that is high-quality stuff, and so we’re going down that path in this channel and making a lot of headway.”
Customer feedback has been very positive, said DePinto. “They see the price point, and then they try it, and then they say, ‘Wow, this is really good.’ That’s what we’ve seen and how the business has grown. We haven’t skimped on ingredients, haven’t skimped on packaging. Where we saw that we did, we went back and redid them. So in some ways it’s trying to change perceptions, and I think it will take time, but it’s moving in the right direction.’
Canned wine is a prime example. 7-Eleven’s Roamer chardonnay is a top brand in its stores. Canned wine is very portable for the on-the-go customer, the company said. And it chills faster than bottled wine. Most of the canned wine on the market was on the cheap end, the retailer said. 7-Eleven went with higher-quality varietals at a competitive price point. A rose and riesling are also available.
Other proprietary products that 7-Eleven will roll out this year include:
- 7-Select Organic Milk, ice cream and other dairy products.
- Cold-pressed organic juice drinks.
- Skyra bottled water from Iceland.
Another major strategy for 7-Eleven is to digitally enable the organization, to make the store experience easy and simple for the customer.
The loyalty program is the first element of that strategy. The 7Rewards program now has 27 million members, and a scan rate of 27% in store, according to the retailer. “It’s just growing by leaps and bounds,” DePinto said.
The second element is delivery. 7Now is now available through 1,000 stores. It reaches 30 million households in about 400 cities.
Mobile checkout is a third element. If a 7-Eleven store has mobile checkout, it’s geofenced, DePinto said. When 7Rewards customers are near a store that offers that feature, 7Rewards asks, “Do you want to use mobile checkout?” If so, customers scan their purchases and select how they want to pay—Apple Pay, Google Pay or a linked debit or credit card. Once they pay, customers scan a QR code at a confirmation station to complete the transaction.
And a fourth element is the new cashierless store model. 7-Eleven has opened a 700-square-foot frictionless location at its corporate headquarters in Irving, Texas, for an employee pilot. “You go in, you pick up the items you want, you walk out and a minute later you’re getting a receipt with exactly what you purchased,” DePinto said. “For smaller places like offices, I won’t say the cashierless store will be ubiquitous, but it will be in a lot of spots.”
Other digital innovations coming from 7-Eleven include a program for customers to shop with 7Rewards points and a digital wallet, set to roll out this year.
“The bottom line is that we’re trying to be more relevant and convenient,” DePinto said. “That’s how the customer is viewing convenience. I want to come to your store when I want to, but I want to pay the way I want to pay. If I want to use cash, I want to use cash. If I want to use mobile, I want to use mobile. If I want it delivered to me, that’s becoming the ultimate convenience, so we’re trying to extend that and keep up with what the customer wants.”
4. Store growth
DePinto also discussed store growth. 7-Eleven has 900 stores lined up for organic expansion, as well as nearly 600 slated for remodeling, in the next two years, he said.
7-Eleven’s Tokyo-based parent company Seven & i Co. Ltd. has said it hopes of reaching a goal of 20,000 U.S. c-stores within the next few years.
“We put that big target out there,” DePinto said. “It is an ambitious goal. But we’ve really built the pipeline up the last three years, and some acquisitions may come along. I’ve been really impressed what the team has done around growing our pipeline of organic stores. We’ll get up to, at some point, building 1,000 stores a year.”