To make convenience stores more convenient, Wawa is letting customers skip the store altogether.
Shoppers can order on their phones and get coffee brought to their cars. A couple of Wawa stores have drive-thru windows like fast-food restaurants. You can also get hoagies delivered to your door if you want to stay home. And for those who still relish the store ambience, Wawa has self-checkout kiosks to get you out faster.
Those are some ways Wawa is trying to keep pace with changing shopping habits brought by technology and accelerated by the pandemic. The Delaware County-based chain of 940 stores is no longer just competing with the 7-Elevens of the world. Tech firms such as Gopuff and Amazon are transforming retail with half-hour deliveries and cashierless stores. More change could be on the horizon, from pizza-making robots to “mobile stores” that can be hailed like a taxi.
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Convenience stores must adapt if they are going to survive in the 21st century, industry experts say. Even Wawa, a Philadelphia-region fixture with fiercely loyal customers, knows it can’t sit back.
“Go back 20 or 30 years and Sears was a beloved brand,” said Jim Morey, Wawa’s chief brand officer, referring to the bankrupt retailer. “They didn’t adapt and change, and that’s going to happen to anybody. So one of our values is being able to embrace change.”
Wawa’s curbside pickup and delivery options were planned pre-pandemic but ramped up during the health crisis. The coronavirus caused the company to test other ideas, too.
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The firm opened its first drive-thrus this year to examine operations and customer acceptance. One location, in Falls Township, Pennsylvania, is vehicle pickup only. Another in Westampton, Burlington County, has a drive-thru window bolted to a traditional store. Wawa plans to open a few more next year.
“We opened these specifically with one reason and one reason only. That’s to answer the question: ‘Can we do this?’” Morey said. “We learned we could.”
The company limited its drive-thru menu and faced initial tech challenges, such as taking voice orders accurately. Wawa quickly overcome these issues and now operates the drive thru-stores efficiently, company spokesperson Lori Bruce said.
Then there’s the self-checkout kiosks that many customers recently noticed. Wawa piloted self-checkout during the pandemic and found the kiosks moved customers through stores faster. It also allowed Wawa to offer a more socially distanced checkout option, Bruce said. The machines are now in more than 60 stores.
The primary purpose of these changes is to make shopping more convenient for consumers, but there can be other unplanned benefits, said John Stanton, St. Joseph’s University professor of food marketing and a former Wawa consultant. The online ordering or self-checkout kiosks may ultimately help Wawa sell customers more stuff or cut labor costs.
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“If you’re really focusing on the customer, there’s always some of these little benefits that add up,” Stanton said.
The vast majority of Wawa customers still come into stores and help themselves, but consumers are adopting online ordering through the company’s mobile app. Digital orders have tripled since before the pandemic, Morey said. Sometimes the same customer shops in-store in the morning and orders online later.
So-called omni-channel customers buy 30% more products than those who only shop in-store or online, said Brittain Ladd, a global strategy and supply chain consultant. That’s one reason why web retailers Amazon or Philadelphia-based Gopuff have launched brick-and-mortar stores while Wawa goes digital.
“When customers can engage with a retailer of their choice in different ways online or in-store, they just end up buying more products,” Ladd said.
Economists have predicted that the pandemic would accelerate the trend of robots replacing humans in the workforce, with cashiers especially at risk. But self-checkout does not spell the end of the Wawa worker, Morey said.
The machines are just an option, with cashiers still on hand to check out customers. And food preparation is a growing part of the business, requiring workers to make hoagies and beverages on demand, he said.
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“We need more labor than ever,” Morey said. “And we’re always going to have somebody that’s going to be there to check out our customers.”
There are some drawbacks to the new services. Delivery orders are less profitable for Wawa with the added cost of delivery, but the company hopes to grow that customer base. The company has successfully tested delivering on its own, but for now is sticking with third-party services, Morey said.
History of change
Wawa, the 23rd largest privately held company by revenue according to Forbes, has a long history of making significant changes. It pivoted from an iron foundry to milk processing in the early 20th century. When the milk delivery business dried up, the company opened its first food market in 1964. It now has stores in six states and Washington D.C. and employs 38,000.
When Wawa saw consumers gravitate to prepared foods, its deli shifted from selling cold cuts to making hoagies, said Stanton, the former Wawa consultant. He recalled one meeting when a top executive said the chain would never sell gasoline. Now, it has 60 charging stations for electronic vehicles.
Some additions at Wawa, such as the ordering kiosk, proved to be big hits, Stanton said. Others, such as having baristas make specialty coffees a la Starbucks, fell flat. Either way, he gives the company credit for trying things customers could like.
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“That’s probably why it’s one of the best-run convenience stores in America,” Stanton said.
Competition from tech companies could force Wawa to change even more. Wawa’s new self checkout kiosks trail the cashierless technology at Amazon Go stores, where cameras and shelf sensors let customers pick items and leave without checking out. Amazon bills the customer’s credit card later. There are currently no Amazon Go stores in the Philadelphia region, but the company has opened an Amazon Fresh grocery in Warrington, Pennsylvania, that does not require cashiers.
Ladd predicts convenience stores will innovate even more, adding pharmacy kiosks that dispense medicine or branded vans that act as mobile stores, driving around town carrying goods. Customers could call the van to their location, much like hailing an Uber ride. Eventually, convenience stores will be able to change prices by the hour, depending on demand or promotions.
“Other convenience store chains are embracing these technologies,” Ladd said. “Regardless of how loyal a Wawa customer is today, if they see another convenience store chain that can give them more product, better service at a better price, and make it easier to engage with them, slowly but surely, they’re going to leave.”