Taking The Convenience Store Uptown, Upscale And Omnichannel

At first it would seem to be a contradiction in terms. But Foxtrot, a small company out of Chicago, is reinventing convenience store retail and taking it uptown. As of last week it has $17 million in its coffers to achieve that mission.

“We’re looking at recapturing the corner store,” said Mike LaVitola, co-founder and CEO of Foxtrot. “It’s the place where you have to pick up five items, and maybe it’s a big chain that you go to or maybe it’s a seedy old mom and pop. Those stores are fine but they’re certainly not a place that you want to spend time, or explore new product. That’s what we want. We took the idea of a convenience store and flipped it on its head.”

That corner store philosophy is officially called “convenient stores for the modern world — a digitally native evolution of the corner store/cafe that marries the best of neighborhood retail and ecommerce technology, to offer a thoughtfully curated collection of daily essentials, coffee and prepared foods available in-store or delivered in under an hour.” It’s an ambitious business model, which so far has been limited to eight locations in Chicago, but certainly enough to prove the concept for LaVitola, who is an investment banker by trade, and his team.

Instead of grabbing a coffee in the morning, Foxtrot wants you to sit and drink it. Instead of grabbing a mass-market six-pack of beer and some Slim Jims, Foxtrot wants you to try a local craft beer, or maybe a legendary local food brand. Standard convenience stores have necessities; Foxtrot has gifts. Maybe the standard 7-Eleven takes mobile payments, but Foxtrot has its own app. Consumers can also order in-store products through that Foxtrot app and eCommerce site and have it all delivered within an hour.

The $17 million funding round will allow Foxtrot to grow its corporate team and expand. This spring it will launch two Washington, D.C. locations (Georgetown and Mount Vernon). Foxtrot is also slated to open its eighth location in Chicago to bring its total to 12 locations across three markets (Chicago, Dallas and Washington, D.C.), with additional markets to be announced later in 2020.

So far LaVitola is happy with the numbers. Foxtrot has achieved 150 percent year-over-year growth of its eCommerce operation, 250 percent year-over-year growth of its corporate team and 2x year-over-year revenue growth. Its proprietary loyalty program has popped spending by more than 10x per month across both retail and ecommerce channels.

“It’s great … because customers build up a sort of credit for our loyalty program,” he said. “If you spend enough with us you get free delivery and free coffee. And it works either in store or through the app. It gives us a chance to know what you’re buying your store and what you’re buying online and we’re able to serve up a killer online experience based on your past purchase history and web traffic behavior. Our loyalty program enables personalization.”

The Foxtrot strategy is right inline with findings from the PYMNTS recent Checkout Conversion Index. It found that eCommerce merchants’ collective CCI score — which evaluates both their desktop and mobile checkout experiences — improved for the third consecutive research cycle in Q4 2019, increasing from 51.4 in Q1 2019 to 53.1 in Q3 and subsequently to 54.6 in Q4. This means merchants in have continuously eliminated frictions from their online checkout experiences over the past several quarters.

This improvement was primarily driven by the widespread adoption of several key checkout features, including product rating and review options and guarantee or refund policies. The share of retailers offering both of these online checkout features increased between Q3 2019 and Q4. The share allowing customers to review and rate their purchases increased by 4 percent, and the portion offering satisfaction or refund policies increased by 5.3 percent. The increased adoption of checkout features like these strongly indicates an enhanced checkout experience.

And it also boils down to merchandising, according to LaVitola. He has combined that checkout experience with a bigger store footprint, more items on the floor and private label products. It currently stocks 800 items in store from about 100 from Bud Light and Oreos to the hardest-to-find local craft beer along with the most popular. He wants customers to say “you can only get it at Foxtrot.” He doesn’t want to be known as the convenience store that delivers. He wants Foxtrot to be known as the data-driven convenience store chain.

And he wants to be known for the customer experience, like this one:

“We had a couple who met in one of our Chicago stores,” he says. “They used our store in their wedding invitations. I love that, and you can find that on our Instagram. I was like, floored by that. This is the place they go to get their morning coffee and their wine … it really became part of their everyday routine. It tells me we must be doing something right.”

VCs agree. If Foxtrot can take its concept to two new cities this year, more weddings are bound to follow.