Rewards App Wars: Wawa vs. 7-Eleven
Wawa and 7-Eleven seem like polar opposites when it comes to customer loyalty and brand power.
In one corner is Wawa, beloved by Philadelphians for always being there with a cup of coffee on your morning commute or a late-night Italian hoagie when you’ve had too much to drink.
In the other corner is 7-Eleven, seen by many as corporate, drab and lacking a hometown feel (and the all-important deli counter). In fact, a recent survey found that customers prefer Wawa to 7-Eleven by a 2-to-1 margin.
Now both companies are going head to head with new mobile apps tied to customer rewards programs. (They were literally released within weeks of each other in February and March.) Wawa’s works essentially as a debit card and offers customers free merchandise after $50 in purchases. Funds must be prepaid, much like gift cards. 7-Eleven’s program currently offers only a free seventh drink after you purchase six.
Both companies declined to offer specific metrics on app downloads or the value of the rewards given so far. 7-Eleven did say that coffee is the number-one scanned item, followed by Big Gulps. Wawa said that its most frequent customers seem to be using the rewards program most.
So who’s going to win the loyalty of the Philadelphia consumer? Let’s analyze.
On the surface, it seems like Wawa has the upper hand. Its program is much more expansive, considering that customers can earn points on products like hoagies and snacks compared to just drinks from 7-Eleven. A 7-Eleven vice president told me the program could be expanded to “other store favorites” at some point, but declined to offer further specifics. Advantage Wawa.
But Wawa will certainly turn some customers away with its debit card-esque functionality. Will customers really keep dumping money into the account or allow it to auto-load from a credit card? Doesn’t that hurt the customers who don’t have the money to shell out in advance? At 7-Eleven, all you have to do is download the app and start making purchases. “People will like the 7-Eleven program better, it’s less annoying,” said Eric Eisenstein, director of graduate programs in the Department of Marketing and Supply Chain Management at Temple’s Fox School of Business. Advantage 7-Eleven.
Wawa can invest the cash deposited on the rewards cards and earn money back to help compensate for the cost of giving out free stuff. Advantage Wawa.
Wawa offers customers the ability to pay with their mobile apps, while 7-Eleven doesn’t. Advantage Wawa.
In both cases, the companies are gaining valuable customer data. Signing up for a rewards program likely allows the companies to track your buying habits, allowing them to design better site locations, set prices, and arrange the most profitable assortments of products. “That data set is worth a boatload of money,” said Eisenstein. He noted that tracking data in the grocery business is extra hard because a high volume of customers pay in cash. Advantage even.
Before the smartphone revolution, rewards cards were physical pieces of paper that needed to be punched — meaning they had a good chance of being misplaced before a customer could actually redeem them. It’s just human nature. (Think about it — how many times did you get a gift card for Christmas that you totally forgot about?) But by using an app-based system, the companies won’t get that financial bump — and customers won’t lose out on points they’ve already earned. Advantage even.
Wawa’s program allows customers to fill cards with cash in the store — meaning it doesn’t have to be tied to a debit card. Also, Wawa doesn’t require them to have a smartphone or download the app to participate. “A lot of people don’t have a smartphone, and we didn’t want to cut them out of the program,” said Lisa Wollan, director of consumer insight and brand strategy at Wawa.7-Eleven’s program is only available via the smartphone app. Advantage Wawa.
Results: Wawa wins four to one, with two ties.
Our Recommendations: Pick Wawa if you’re a routine user who has the money to prepay. Pick 7-Eleven if you buy a lot of drinks and don’t want to shell out money in advance.