NATIONAL REPORT — Wouldn’t it be nice to know exactly what products are selling or not selling, what time of day they are being purchased, and what items are being bought together most often? Thanks to business intelligence (BI) technology, this information and much more is available to help convenience store retailers of every size make better decisions — and ultimately, boost profits.
The industry’s small operators and single-store owners often have more limited technology budgets vs. the larger chains, making data analysis seem overwhelming or out of reach. However, there are opportunities available, especially for those who are scanning and using a point-of-sale (POS) system.
Many POS vendors, especially those that work with smaller operators, provide basic analytics with a back-office system that allows operators to see how much they sold, what sold, what the profit is on it, and more.
“Most POS companies offer raw data extracts or reporting services,” Susheel Sethumadhavan, a principal in the advanced analytics practice at Kearney, a global strategy and management consulting firm based in Chicago, told Convenience Store News. “Simple MS Suite products with bolt-on BI platforms like PowerBI can work quite well.”
What BI technology enables operators to do is to take their data in its raw form and slice it into usable information to get details around what is selling, how and when inside the store.
Key data sources for any c-store business include the POS, back-office system and any loyalty programs, as well as fuel pump data, rewards and any data coming from a proprietary mobile app or third-party payment app, according to Brian Brinkmann, chief product and marketing officer at Agilence, a BI technology provider based in Mount Laurel Township, N.J.
“Small operators have access to the same types of data just like their larger counterparts,” Brinkmann noted. “The key piece is not just the data, but the marriage of various data sources to fully realize the value. A good option is to work with an analytics partner who will do the data integration, host the analytics solution, and provide expert advice. This is a cost-effective option, particularly for smaller operators who need answers quickly and reliably.”
Whether it’s an in-house solution or working with SaaS (software as a service) providers and other third-party vendors, the best analytics solutions — especially for smaller operators — take out the complexity and make it easy to monitor what is going on inside the store, Brinkmann said. Many allow operators to log in to a dashboard to see detailed information, run reports and even receive automatic alerts for things that might require immediate action.
What Should I Analyze?
Once a c-store operator has the systems and vendor partners in place, the options to analyze their data and pull insights are almost endless. However, industry experts say there are some important areas to begin with and these include inventory, volume and pricing. Knowing inventory can help a retailer both reduce out-of-stocks and eliminate products that are not selling.
“Start with volume — what products are selling week over week and at what volume,” Skupos co-founder and CEO Jake Bolling recommends. “Also, what is not selling and taking up expensive shelf space.”
Other areas to consider monitoring are:
- Profit margin;
- Sales and profit per square foot;
- Expenses as its relates to sales;
- Profits from promotions;
- Fuel pump data; and
- Lottery reconciliation.
Also, the more a retailer can know about its customers, the better they can understand what products to carry in the store. “Everything related to the customer is key,” Kearney’s Sethumadhavan said. “This includes shopping basket, customer preferences, customer profile based on history, location, gender, and household size.”
Customer segmentation is yet another area that can be helpful, Bolling pointed out, noting that a loyalty program makes all of this even more powerful. Operators can segment their customers by number of visits in a week, by daypart, by people who stop only for gas, etc.
Convenience store operator Laxmi Narayana Corp., based in Clairton, Pa., and operating 23 locations, chose Skupos to be its loyalty program provider, and Verifone to supply its POS and back-office systems. Skupos collects all the data for its stores and sends reports so that the retailer can see what products are selling, what is selling more than others, and offer promotions to its loyalty members.
“They have a website we can log into to pull information or they can email it to us, and we are using their loyalty program to keep customers coming into our store for the past two years,” Laxmi Narayana Corp. owner Bob Dobariya said. “We can track when we offer multipack promotions and how it will drive more people into the stores. We can also see manufacturer data and what products are selling well.”