Convenience Retailers Tap Technology Tools to Tackle Operating Expenses
NATIONAL REPORT — Whether a single store or a large chain, operating expenses are something every convenience store retailer must deal with. Finding ways to streamline operations and increase efficiency can have a huge impact on an operator's bottom line and so, many c-store retailers are turning to technology to accomplish this goal.
"Operating expenses are expensive and one of the biggest is labor, which has become much more expensive since the pandemic," said Kay Segal, founding partner at Business Accelerator Team, a convenience retailing consultancy based in Phoenix. "We need to rethink processes and use technology that can take repetitive actions away, and enhance the guest interaction."
Technology, both in-store and at the headquarters level, is helping convenience retailers save on labor, monitor equipment, speed up training and onboarding of new employees, and improve customer satisfaction. In many cases, a company's operations and technology departments are coming together to execute plans.
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"More and more, I'm hearing about solutions that provide retailers with the ability to take a proactive approach to their operations," said Ed Collupy, owner of Collupy System Solutions LLC, which offers consulting services to the industry. "IoT [Internet of Things] and remote management systems where devices are monitored, such as temperatures and equipment status, or accessed from headquarters, allow retailers to take corrective action sooner rather than later."
Adding new technology also can remove tasks from staff that are better handled with data, giving store employees and managers more time to interact with customers onsite, according to Ed Burcher, a partner at Business Accelerator Team. One example is automated ordering and replenishment, which he said is more accurate with real-time inventory and sales data.
"This applies to all product lines, including foodservice and ingredients," Burcher said. "IoT, and now AI [artificial intelligence], may seem like overused terms, but they are areas where convenience stores can apply technology, connectivity and data to improve their operations."
Improving Customer Interaction
Atlantis Management Group, which has 300 stores, 100 of which are company owned, is focused on giving its store managers more time to interact with shoppers.
"We are looking to get the manager out of the back office and more in the front of the store and forecourt," said Rick Rigby, chief technology officer for the Mount Vernon, N.Y.-based company. "We are using tablets and mobile tools to free them up."
Customer interaction and satisfaction can be improved by increasing transaction speed as well, using mobile apps for ordering and payment, and self-checkout, according to Burcher.
Additionally, he pointed out that using data "to gain more insight into shopping behaviors to improve the store and digital experience for the guest" can improve operations in real-time and provide ongoing feedback to the operator that can be acted upon at the store level.
"Whether you call it improved data analytics or AI, technology can be applied at many touchpoints for the guest and staff to improve the experience," Burcher said.
Atlantis Management uses InStore.ai's artificial intelligence audio tool to gather information from customers shopping in its stores and provide feedback to its operations team for areas of improvement, according to Rigby.
"Technology can help with customer service by tracking guest interactions and reviewing transactions for opportunities," Burcher noted. "This involves reviewing actual transactions and providing feedback and dashboards to the staff and store. These reviews can be used not only in a call center environment, but also at the point of purchase in-store."
Improving Foodservice Operations
With foodservice becoming such an integral part of many convenience store's offering, finding ways to streamline and improve operations in this high-margin category is crucial. C-store retailers still struggle to compete with the integrated technology available to quick-service restaurants that links customer ordering, food preparation, supply chain and more.
"Some retailers are investing in developing their own solutions or starting up integration projects that will unite kitchen management systems with back-office and POS [point-of-sale] systems," Collupy explained. "There is still a lot of work to be done."
Many c-stores today have automated food ordering through in-store kiosks, screens at the fuel pumps, mobile apps and online ordering. This data, which can be used with other systems, is helping operators forecast demand, create a detailed plan for food prep and get a better handle on inventory replenishment, according to Burcher.
"These systems can not only lead to having the right products available when needed, but also avoid waste by not overproducing," he said, noting that companies such as Supplyit offer an integrated solution that takes "staff preferences out of the equation" to create a detailed production plan for foodservice team members. "This helps all facets of preparation and is probably most critical for hot items like breakfast and roller grill where is there is a very short shelf-life."
Automating reordering and the monitoring of temperatures and equipment for food safety are other ways retailers are utilizing technology to streamline foodservice operations at the store level. Atlantis Management is in the early days of meeting with vendors to leverage foodservice technology such as temperature probes, Rigby shared.
At Kansas City, Mo.-based Fav Trip, which operates five stores, the retailer offers Caribou Coffee and is monitoring the machines to know how much coffee is being sold at what time, as well as for reordering purposes, according to President and CEO Babir Sultan.
"In the world of IoT, every piece of equipment can be connected to analyze usage, cleaning, stock levels, temperature and 'up time,' and report these metrics," Burcher said. "This is being applied to programmable equipment to ensure proper time and temps for heating items and downloading the most up-to-date programs."
Whether it's automating label printers for hundreds of stores or uploading a new recipe with cook times and temperatures for a new menu item or limited-time offer, automation in foodservice operations is aiding convenience retailers, he added.
Improving Labor & Administration
Technology is playing a role in other facets of c-store operations, including labor optimization. For instance, Fav Trip streamlined its training process from a 20-page booklet down to three pages, and then eventually shifted to a technology-based approach.
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"Now, we have them watch a video with a quiz at the end online, and it has reduced our training time. The feedback on it has been amazing," said Sultan, adding that the company tries to connect everything back to data, even its labor decisions. "We use our internal data to see how many people we should have working at what times."
Accounting processes are getting a technology overhaul as well. At both the store manager and headquarters level, Atlantis Management is working with its operations team and accounting department to consolidate and optimize forms, and take processes including invoicing and accounts payable from manual to automated, Rigby reported.
"Tools like Microsoft Power Automate and AI-powered Copilot are what we are using," he said, adding that these tools are being used also for notetaking, meeting summation, email automation and report writing for both managers and headquarters employees.