Commentary

7-Eleven And KFC Look To Deliver In Their Own Ways

They don’t call it a convenience store for nothing: 7-Eleven has now added lockers to more than 200 outlets in North America where online shoppers can pick up packages shipped through UPS or FedEx.

NBCNews.com’s Lucy Bayly explains why this is a good thing for consumers: “Now that we can buy everything online, from coffins to clip-on man buns, the offline world is struggling to deal with the onslaught of packages generated by our taps and clicks. And as anyone who has come home to a ‘sorry we missed you’ notice knows, the Achilles' heel of online shopping is a late, or unsuccessful, delivery.”

(As a reader service, here’s a Groupon for 85% off one of those man buns, though it may not be what you thought it was.)

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Meanwhile, the Wall Street Journal’s Loretta Chao explains why these lockers are good thing for e-merchants: “For retailers, locker solutions offer a potential salve for the logistical headaches that have come with surging online sales, including overtaxed distribution networks and escalating shipping costs. Wal-Mart, for example, can save on extra home delivery costs by dropping packages off directly at lockers using its own truck fleet.”

Wal-mart opened “Grab & Go” lockers in six 7-Eleven stores in the greater Toronto area last month.

And 7-Eleven spokesperson Margaret Chabris tells CSP Daily News’ Greg Lindenberg why trading shelf space for storage bins works for the purveyor of Slurpees and Corn Dog Rollers:  “The locker program is another segment of our omni-channel strategy of delivering what people want, when and where they want it.”

And they might grab a Super Big Gulp on the way out, right?

But it’s not like high school where you get a locker for the year and secure it with a Master combination lock. Customers will be able to open the locker containing their purchases by scanning a bar code sent over email to their smartphone, Karl Utermohlen reports for InvestorPlace.

“7-Eleven officials didn’t disclose the fees that its partners are charged for the lockers, nor how franchise owners are compensated,” writes the WSJ’s Chao, who apparently broke the story and has an extensive analysis of the expansion of a program it first tested with Amazon in 2011. “They said the locker program is still in the testing stages, and it is too early to tell if the added fees and customer traffic will make up for the sacrificed space.”

As far as FedEx and UPS go, it’s less doorbells to ring, less miles to travel, less fuel to expend.

In other delivery news ... KFC is starting delivery to customers in Los Angeles, Orange County and San Francisco today — the first time it has done so in the U.S. market — and will expand the service to Houston by the end of the year. More cities may follow.

“The chicken won't come cheap: There's a delivery fee between $4.99 and $6.99, depending on a customer's location, and prices of some items will be higher than those in the restaurants. Its value meals, however, such as its eight-piece $20 Family Fill Up will stay the same price,” reports the AP’s Joseph Pisani.

KFC is using the restaurant delivery service DoorDash, which guarantees delivery within an hour and has no minimum order size. It is now in 18 markets and more than 250 cities and “has quickly asserted itself as a force in the delivery space by stressing data-driven insights and better efficiency in stores in addition to speed,” writes CNBC’s Katie Little.

“I think consumers really want three things: value, quality food and convenience. I think DoorDash really solves the last one,” KFC's U.S. chief information officer Chris Caldwell tells Little. “To bring you hot chicken wings under 30 minutes is a lot harder than it sounds,” DoorDash CEO Tony Xu says in the same phone interview.

“The Colonel believed that families deserve a break from the kitchen and that meal replacements should be plentiful and valuable when made ‘the hard way’ by KFC cooks. Now busy families can enjoy the world's best chicken, which is hand prepared in-store every day, without having to leave the comfort of home,” reads the release announcing the service.

Meal replacements?

KFC already delivers in China, Egypt, Malaysia and other countries around the world, the AP’s Pisani reports, and Yum Brands CEO Greg Creed told analysts in May that its delivery business usually grows at a ‘faster rate’ than its main business. “The great thing about buckets of chicken,” he said, is that “it holds its temperature incredibly well.”

Here’s a suggested tagline for when the service rolls out nationally: “KFC: The Meal Replacement That Holds Its Temperature Really Well.”

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