7-Eleven Launches Subscription to Make Delivery Economics Work in All Parties’ Favor

7-Eleven Launches Delivery Service Subscription

For food sellers, delivery subscriptions kill two birds with one stone. They offer a solution to consumers’ growing frustration with added fees, and they drive loyalty.

Businesses ranging from major grocery retailers such as Walmart and Amazon to leading on-demand food delivery services such as DoorDash and Uber Eats have launched programs that offer free delivery for a flat monthly rate, incentivizing their occasional shoppers to become frequent customers.

Now, 7-Eleven is getting in on the action. The convenience retail giant announced in a Wednesday (Jan. 19) press release the launch of its 7NOW Gold Pass subscription offering providing free delivery, double rewards points and select freebies for $5.95 per month. Programs such as this especially make sense given that the economics of food delivery can only come close to working with scale, and increasing frequency with existing customers goes a long way toward boosting order volume.

“Our 7NOW Gold Pass subscription delivery service brings convenience to a whole new level, giving our customers the ability to order what they want, when they want it — and now as often as they want without an added delivery fee,” 7-Eleven Senior Vice President and Chief Digital Officer Raghu Mahadevan said in the release.

The retailer is offering a 14-day free trial, which could go a long way toward driving adoption. Research from PYMNTS’ November study, “Subscription Commerce Conversion Index: The Exclusive Access Effect Edition,” created in collaboration with sticky.io, found that by the fourth quarter of 2021, 80% of subscribers had used a free trial to obtain at least one retail subscription since March 2020.

Moreover, the study found that 54% of those who had used a free trial reported that they kept the subscription(s), meaning that the majority of those who sign up for these offers become regular subscribers.

Read more: 54% of Consumers Keep Their Retail Subscriptions Going After Their Free Trial Ends

Still, while this subscription model seems to make intuitive sense, benefitting both the customer and the retailer, results have been mixed for providers. For instance, Whole Foods Market used to provide free delivery to Amazon Prime members. However, in August, the company added a fee for Prime customers, suggesting the model proved unsustainable.

Yet, the addition of the fee may not have made matters any better. By December, delivery orders had seen a marked decline, with one employee reporting that the number of deliveries per hour had fallen from 185 to 40 in that period.

See more: Whole Foods Orders Drop After New Delivery Fee, Report Says

Similarly, restaurants have seen mixed results with their subscription offerings. Major quick-service restaurant (QSR) chain Taco Bell appears to be enjoying some success with its Taco Lover’s Pass daily taco subscription offering, rolling it out nationwide in early January after piloting the program in September in Tucson, Arizona. On the other hand, United Kingdom-based sandwich and coffee chain Pret a Manger came under fire after failing to provide members of its coffee subscription program with menu items supposedly covered by the program.

Read more: Taco Bell Rolls out ‘Taco Lover’s Pass’ Nationwide as Restaurant Subscriptions See Mixed Results

“What we’ve seen emerging clearly is that the only growth in subscription companies is people changing from one subscription to another subscription, but net new people entering into the market is really slowing significantly,” FlexPay Founder and CEO Darryl Hicks told PYMNTS in October. “So, that means that it’s going to be more important than ever before to really focus on retaining the customers that [subscription services have], increasing that lifetime value.”

See more: For Subscription Businesses, Fewer Failed Payments Means Better Customer Retention