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10/18/2022

Groceryshop 2022: Evolving Convenience and Private Label

Three convenience retail leaders from Foxtrot, 7-Eleven and Gopuff spoke about the changing landscape of the category at Groceryshop 2022 last month.
Zachary Russell
Associate Editor
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Michael LaVitola Foxtrot
Michael LaVitola

At Groceryshop 2022 in Las Vegas, NV, leaders in the convenience channel discussed how the COVID-19 pandemic has fueled a greater demand for convenience options, and how retailers are shifting towards improving private label assortments.

Michael LaVitola, co-founder & CEO of Foxtrot, Raghu Mahadevan, SVP & chief digital officer 7-Eleven, and Daniel Folkman, SVP of business at Gopuff, took turns speaking with Jason Goldberg, chief commerce strategy officer at Publicis Groupe, about various topics in convenience.

LaVitola discussed how Foxtrot, billed as a ‘modern convenience store’ with curated, higher-end assortments, has grown to now offer an array of private label products.

“We launched in Chicago nine years ago as an online-only version of our ‘dream corner store.’ We’ve morphed it into an omnichannel business,” said LaVitola. “About a third of our sales now are products you can only get at Foxtrot. It’s not a low-price strategy, most of those items fit right in the middle of the merchandise mix. Those [own brands] have been a ton of fun. This summer, both our top selling red wine and rosé wine were both from the Foxtrot brand.”

Foxtrot began as an online-only retailer, and while the retailer now has stores in several major markets, customers are still using the Foxtrot app to make purchases showing that convenience is becoming a greater priority.

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Groceryshop 2022 7-eleven
Raghu Mahadevan and Jason Goldberg

“Most of our revenue in stores comes from customers shopping with the app, the same app that you use for delivery, or order pickup, which is actually our fastest growing channel, you can actually use to pay in-store,” said LaVitola. “It’s also where we gain all the insights around where our customers are moving, what trends they’re into, and that’s where most of the product engineering is done.”

Mahadevan, who oversees 7-Eleven’s digital operations, spoke about how the convenience giant is leveraging technology, particularly through the 7NOW delivery app.

“The customer’s notion of what convenience means is changing daily,” he said. “It’s very clear that the customer is looking for much more than a walk-in walk-out experience, and that led to us investing in 7NOW. The question was how can we deliver convenience at-scale, while trying to get the products to customers as quickly as we could. If you get the in-store operations right, and fulfill the products really well without error, that keeps the customer happy.”

Mahadevan added that 7-Eleven is continuing to look towards new technological solutions in the future, aiming to make the shopping experience as easy as possible.

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Daniel Folkman Gopuff
Daniel Folkman

“We continue to push ourselves to figure out what that store experience of the future is,” he said. “Maybe with autonomous delivery, if that takes off in the next couple of years. There’s some enhancements coming in delivery, certainly a lot coming with frictionless checkout.”

Concluding the panel was Folkman, who discussed how Gopuff, the online delivery retailer, has grown to venture into the world of private brands, as well as prepared foods.

“We showed that there is a viable business [instant commerce] to be done here, we spent 10 years focusing on the business model: building infrastructure, acquiring liquor licenses, and the technology we’ve built,” said Folkman. “We’ve introduced our Gopuff Kitchens and our own brands. The reality of it is it costs the same amount of money to move a pint of ice cream, a pizza or AirPods through our network. The reason we’re able to do all of these things is because we own all the inventory. We’re able to make money on everything that runs through the platform.”