Convenience Retailers Strive for Seamless Operations

Artificial intelligence tools can help create standard operating procedures.
Melissa Kress
A computer screen with operational excellence buttons

NATIONAL REPORT — Convenience store retailers faced ongoing pressures to optimize their workforce, offer advanced amenities, manage industry consolidation and navigate economic uncertainty — all adding up to challenges and opportunities in 2023. What 2024 has in store for the channel remains to be seen, but there is little doubt that technology will play a crucial role in meeting the challenges and embracing the opportunities to come.

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"Top retailers, popular brands and technology innovators will distinguish themselves by prioritizing integration and collaboration," Jeff Hassman, vice president of product strategy and partnerships at PDI Technologies, said during the company's trend forecast in late 2023. "We all have insightful data on what's happening in the store, at the pump or behind the scenes. By working together to connect that data, we can maximize the convenience experience for consumers, which means a big win for the industry."

Among the trends that will most impact the global convenience industry in 2024, according to Atlanta-based PDI, is technology's growing role in operational excellence. With evolving labor challenges, forward-looking operators will invest in technologies that integrate easily with their existing systems to reduce complexity and make their processes — and their employees — smarter, faster and more efficient, the company forecasts.

[Read more: CSN EXCLUSIVE: Zeroing In on C-store Technology Priorities for 2024]

Targeting operations with the help of technology was a key focal point in a recent Conexxus webinar entitled "Think Tank v8.0 – IT Leaders' Insights." During the session, top convenience store IT leaders discussed the transformative impact of technology on their businesses.

Step one is wading through the numerous IT requests to set priorities. At Jacksons Food Stores, creating a project management office helped the retailer tackle this, according to Erika Cobb, vice president of technology at the Meridian, Idaho-based c-store chain.

"One of the constant struggles I think many of us deal with within IT is just the myriad of things that are coming at us as leaders, as departments, and how do we prioritize all of those needs across the business," she said. "One of the things that has really come to life at Jacksons over the last year and a half [is] we hired a person to lead our project management and established a [project management office] along with a small number of project managers."

The project management office director works with different departments "diligently and consistently to understand all of their needs" and prioritize those needs, Cobb noted.

Small Operator Roadmap

Jacksons Food Stores has more than 300 company-operated convenience stores in Idaho, Nevada, Oregon, Washington, Arizona, California and Utah under the Jacksons Food Stores and ExtraMile by Jacksons banners. On the other end of the spectrum is Vancouver, Wash.-based The Convenience Group LLC, which operates and franchises eight neighborhood c-stores throughout Washington and Oregon. 

Donnie Rhoads, director of business development for the small operator, pointed out that the chain's smaller footprint enables The Convenience Group to keep things "tightknit," but there are still points along its technology roadmap that keep him up at night.

Foremost is ease of integration. "For us independent operators, it's important for us to choose the right suite of tech solutions that fit our needs," he said.

"If we're going to be upping our foodservice game and we want to do curbside pickup or delivery, is it going to be able to talk to our registers? That's the kind of thing that we're thinking about," Rhoads explained, adding that it can be daunting when exploring the hundreds of solutions available from the tech companies. "But at the same time, I also enjoy the place where we're playing in — that, again, we can be pretty nimble on our feet when choosing these solutions and when we're choosing different vendors in the tech space."

It's also vital to choose a technology vendor that will be able grow with the retailer. This is important for a company of any size, but particularly for small and midsized chains.

"I think it's important when you can leverage supplier partnerships. If we're going to be choosing a suite of tech solutions, are we just purchasing or licensing the use of the tool essentially, or are we gaining a partner in the industry? That's definitely something we're thinking about," Rhoads said, while also stressing the importance of communication.

You Can't Spell Operations Without AI

Artificial intelligence (AI) created a lot of buzz in 2023, so many c-store operators are wondering if this is a space they should enter — and if so, how.

[Read more: New Report: Retailers Take Cautious Approach to Exploring AI Opportunities]

Valparaiso, Ind.-based Family Express Corp. has been partnering with a loyalty company that provides AI for more than three years now, and works with additional vendors that offer AI solutions. Clifton Dillman, chief information officer for the 80-plus-store chain, believes AI is a space all convenience store retailers should be exploring, if they're not already.

"With the release of ChatGPT and other tools, there's a lot of buzz around AI and what it's going to do, and really it's going to be transformative. It's going to transform everyone's business in some way, shape or form," he said. "If you aren't looking at how you can use it, I think you're going to end up falling behind. But with that, we have to do it in a smart way."

Family Express has been looking into several tools, such as a GPT trainer where the retailer can upload documents detailing standard operating procedures (SOP) and store associates can find solutions to operational problems that may pop up at 2 a.m., for example.

"What's also great about this tool is it holds historically every question that's ever been asked, and it shows you the response that it gave that person," Dillman said. "There's a lot of questions that get asked that we don't have an SOP for, we don't have an installation guide for."

There's power in being able to adapt and create to fill in where you have gaps, he noted.

"It's not really to cut out the first-level person. We're going to get better. We're growing. It's about being able to do more with less," Dillman said. "It's also about getting the answer quicker. So, even though we have a 24/7 helpdesk, a lot of times we have one person on shift in the middle of the night and if there's multiple stores that are calling, you might end up staying on hold for an hour while someone's working on an emergency."

That being said, he advises all convenience retailers to implement an AI policy to safeguard confidential information. "We need to make sure we're using tools that are smart; tools that are secure. Everyone should be thinking about implementing some type of AI policy at their company," he stressed.

"It is so easy to get into the AI environment. It's a website, and it's no more difficult than using Google. The difference is if you have users, maybe unbeknownst to you, putting in Excel sheets of fuel data to try to analyze the data, all of a sudden now, if that's in ChatGPT, that's publicly available. That's out there," he cautioned. "It is going to learn from that, and it could technically be asked to divulge information."

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