When Phillips 66 decided to e-commerce-ize its Circle K and Union 76 gas stations and convenience stores earlier this year, you just had to know that 7-Eleven wouldn't be far behind.
So it's interesting but not surprising that on-site e-commerce is fast coming to the gas-and-a-Big-Gulp convenience store crowd, thanks to a deal between Dallas-based 7-Eleven Inc., which bills itself as "the world's largest convenience retailer," and an outfit called Cyphermint Inc.
Cyphermint, a privately financed technology company, will be the e-commerce, advertising and Internet cash-payment system provider for 7-Eleven stores' Vcom kiosks. In fact, the Marlborough, Mass.-based company has a whole Kiosk Integration Division.
Vcom is 7-Eleven's self-service kiosks that offer ATM capabilities and a touch-screen that soon will offer event ticketing, weather reports, lottery results, travel directions and, oh yes, online shopping along with your Slurpee. (Newest flavor: Dr Pepper, rolling out first in Texas, naturally.) And yes, you pay in cash - that green stuff, remember?
Phillips is also in the e-commerce market - customers can purchase MP3s, for example, at its in-store ZapLink kiosks via a deal with e-commerce infrastructure company BroadVision.
If you think convenience stores are not big business, think again. In fact, think half a billion in one month for one chain. Total merchandise sales (including gasoline) for 7-Eleven for April 2002 were $594.8 million, up 3.6 percent from the same month a year earlier.
7-Eleven, which has about 5,800 retail outlets in the U.S. and Canada, said that currently, customers can use its Vcom kiosks to make ATM transactions, purchase Western Union money orders and money transfers, and cash checks through Certegy Check Services, a division of Certegy Inc.
Now, 7-Eleven customers will be able to pay cash for e-purchases using Cyphermint's Pay Cash System, a secure payment technology that in essence transforms a kiosk into a sophisticated vending machine, giving customers access to select e-merchants but not allowing them to surf the Net at random.
There's even a deal with Verizon Communications Inc. for its products and services via the kiosks, and it's all expected to be part of a larger rollout of Vcom at 7-Eleven stores later this year.
Why care about e-commerce at the local convenience store? For starters, it's estimated that nearly 100 million consumers in the United States don't have access to credit cards, and 37 million lack basic bank accounts, according to 7-Eleven. That's clearly a market, because these folks do have some money - they just tend to spend it the old-fashioned way. 7-Eleven aims to make it easy for these folks to part with some cash the modern way.
"Our alliance with Cyphermint enhances the value of Vcom by providing a convenient way for more people to use or purchase e-commerce products and services," said Jim Keyes, president and CEO of 7-Eleven. "7-Eleven will open e-commerce shopping to a broader base of customers who do not have traditional Internet access or don't have or want to use credit cards, which are normally required for online purchases."
Keyes added that the expansion of Vcom, now being tested in 98 Florida and Texas stores, is an important growth initiative for the company. And you can bet that if it's successful there, it'll go nationwide soon after.
"This notion fits well with our front- and back-office Internet payment technology and offers tremendous reach for advertisers and online merchants," said Patrick Lally, president and CEO of Cyphermint.
He said the alliance calls for Cyphermint to orchestrate the timing, frequency and placement of third-party ads along with selecting and recruiting e-commerce merchants for Vcom. Shopping destinations through Cyphermint could include online florists, book and music providers.
This is no small market, obviously. Altogether, 7-Eleven operates or franchises about 20,600 stores throughout North America and 16 other countries, according to Hoover's. Japanese retailer Ito-Yokado owns 51 percent of licensee Seven-Eleven Japan (with nearly 8,500 stores in Japan and Hawaii alone) and about 73 percent of 7-Eleven Inc.
And when 7-Eleven was founded, in 1927, e-commerce was indeed just science fiction.
The company got its start at Southland Ice in Dallas, Texas. In addition to selling blocks of ice to refrigerate food, an enterprising ice dock employee began offering milk, bread and eggs on Sundays and evenings when grocery stores were closed.
IE 7
Firefox 2.0
