Q&A: How Vroom Delivery is tackling e-commerce for c-stores

Business


For every 7-Eleven, which has the resources to create a proprietary delivery app with 30-minute service in major cities, there are many chains that can’t afford to build an e-commerce presence or delivery app themselves, or lack the expertise to do it right.

Enter Vroom Delivery, which helps chains build out those e-commerce and delivery options and keep them up-to-date without large amounts of manual work.

Vroom was built to serve the particular needs of convenience stores. Founder and CEO John Nelson said he and his brother first developed the app to help their father, who was looking for a digital solution for a chain of c-stores he owned at the time. 

Permission granted by John Nelson

 

“We looked around and no one was building for this space,” said Nelson in a recent interview. “Tons of people were building basic menuing services for restaurants, there were a number of big grocery apps out there, but no one for this space. So we built the first iteration for him.”

After building out the app for him, they looked around and saw that the convenience space was still being underserved, and Vroom Delivery was off to the races.

The company completed its most recent funding round in November, including funding from three of its current customers — Wesco, Hutchinson Oil and FavTrip. The amount of the funding round was not disclosed

Nelson recently sat down with C-Store Dive to talk about the needs of the convenience store space, how their company works with other leaders in the space and how Vroom Delivery is trying to stand apart from the competition.

This interview has been edited for length and clarity.

C-Store Dive: To start, let’s talk about what Vroom Delivery does. How do you explain what Vroom brings to the table to a prospective customer? 

NELSON: Vroom is really the only comprehensive e-commerce platform that was built from day one specifically for the convenience industry. It was never pivoted from a restaurant menuing service or a grocery service, which means that we’ve been building everything to allow the online shopping experience for convenience stores to mirror the in-store experience. 

We integrate with third-party couponing. We fully automate the menus. So when I talk about having 2,000 or 3,000 products, that’s with zero maintenance. If it’s in your price book, it’ll show up online. If you run out of stock, we’ll remove it.

And then on the fulfillment side, we have some stores doing their own delivery. So we’ve got tools for their drivers to do things like route planning and digital signature collection. If they want to outsource to third party, we’ve had very low rates with some of the top third-party delivery providers in the space like Uber [Eats] and DoorDash. 

We accept all the traditional payment methods, credit card, debit card, but we also are the only e-commerce player in the convenience space and one of only nine in the whole country that can accept online SNAP or EBT.

How much of a lift was it to get SNAP/EBT built into your ecosystem?

NELSON: It was a year-and-a-half-long process, because you have to contract not just with the government, but you have to get a contract with a specific credit card processor that’s been approved to do it. And then each retailer needs to apply individually. 

We have to handhold some of our retailers through the process, but those who’ve done it have seen really good results. We’ve had a few now, they’re seeing up to 20% of orders containing at least one SNAP-funded item. 

Can you talk about what sort of chains benefit most from integrating a delivery program? 

NELSON: The stronger the brand, the better they’re going to be able to push it out. 

But there’s not really a one size fits all. We see different types of chains have different types of successes. So we have some chains that are very robust in the food sector. Other [companies] are more traditional c-stores, lower food offering but still doing strong business in the CPG items. 

And then there’s a difference between rural and urban. Some of the best-performing stores on Vroom are in relatively small towns, where you have large-format stores that are making pizzas in house, they’re making sandwiches in house. But they also have, you know, a large basic grocery offering [and] the age restricted items, beer and cigarettes and stuff like that. 

Those are the types of operations that see very large baskets as well. Our average delivery transaction across the whole platform is over $40. For some retailers, it’s actually close to $50. 

When these companies are adding items to their menu, or when they’re out of items, how do they update that in the app?

NELSON: So for the retailers, we have back-office integrations with all of the major back offices — PDI, ADD Systems, KRS, several other smaller ones. We’re ingesting those, and we’re getting information on pricing, promotions, and also SKU level. So for retailers that are on item-level inventory, we’re getting those daily reports, and if you run out of 20 items in a day, we pull them off the menu. We have a CPG database of hundreds of thousands of products that have been already pre-categorized, so if you add 20 new Cokes, we’ll just add them automatically. There’s zero maintenance required from the retailers.

A collage of photos from Vroom Delivery's customers.

Vroom works with c-store chains of all sizes.

Permission granted by Vroom Delivery

 

How have your c-store customers fed back into how you develop your app? 

NELSON: Basically 100%. This level of automation became a big priority for us over the pandemic, because everyone was familiar with the labor shortages. But a lot of people weren’t as aware of the depth of the supply chain issues and the level of out-of-stocks that a lot of stores were experiencing. So even trying to maintain a slimmed-down menu of a few hundred items could be challenging. 



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *