Couche-Tard Puts Technology at the Foundation of Its Strategy
LAVAL, Quebec — One year ago, Alimentation Couche-Tard Inc. (ACT) revealed a roadmap for growth with four beacons — or lighthouses — to guide the company's way over the next five years.
Known as "10 for the Win," the roadmap is steered by the Laval, Quebec-based company's vision to become the world's preferred destination for convenience and mobility, along with its mission to make customers' lives a little easier every day.
As the company laid out in October 2023, the four lighthouses are:
- Winning Offer, which includes winning in food, thirst and private label.
- Winning Fuel, which includes winning with the business-to-consumer value proposition, the business-to-business value proposition and the fuel supply chain.
- Winning the Customer, which includes building fans through loyalty, the digital experience and operations first.
- Winning Growth, which includes new-to-industry sites, raze and rebuilds, and acquisitions.
At the foundation of these four guideposts is technology, according to Chief Technology Officer Ed Dzadovsky. "Technology is foundational to the 10 for the Win strategy. It is embedded into the bedrock supporting our strategic lighthouses," he explained.
Coupled with the retailer's Information Superhighway journey, which began in 2019, Couche-Tard is making great strides in its technology transformation.
[Read more: Passing the Torch]
It is for those efforts that ACT, parent company of the global Circle K brand, is Convenience Store News' 2024 Technology Leader of the Year. This annual award goes to a technology leader (individual or company) who not only contributes to the success of their organization, but also to the advancement and growth of the convenience store industry as a whole.
Couche-Tard was presented with the award at the 2024 CSNews Technology Leadership Roundtable & Awards Dinner, held Oct. 7 in Las Vegas against the backdrop of the 2024 NACS Show. The event was sponsored by Altria Group Distribution Co., Blue Yonder, Hughes Network Systems and Vixxo.
Pouring the Foundation
According to Dzadovsky, there are five key priorities around technology, each of which supports one or more of the lighthouses.
The first priority is operational technology. "We need to make sure the technology works in our stores every day — every card reader at every POS [point of sale] for every single customer," he said. "That is priority No. 1."
ACT operates in 31 countries and territories, with more than 16,700 stores.
Second is cyber-resiliency, making sure the company's brand is protected and that Couche-Tard is resilient if issues arise inside its tech stack.
Third is building information technology (IT) for the future. "We're in the middle of the digital transformation journey, but it's going to require a different level of technology support moving forward, a different type of architecture and a different technology stack," Dzadovsky said.
Fourth is Couche-Tard's digital experience and digital acceleration — essentially how it is changing the customer experience to meet and exceed their expectations, and understanding their buying behaviors and patterns.
And last but not least is investment in data and analytics in the company's core platforms, enabling the business to make data-driven decisions, whether it's localized pricing, merchandising, inventory, etc.
It's a Journey
Couche-Tard dedicated itself to moving its technology forward when the company embarked on the Information Superhighway journey in 2019. At the time, according to Dzadovsky, the company's technologies were working but they were not keeping up with the pace of technological advancements that its customers were expecting.
Simultaneously, the ACT Executive Declaration included a new commitment to innovation and investment in the improvement of its customer experience. "In order to act on this declaration, it was imperative for us to create a unified ecosystem that enabled easy integrations and reusability," he explained. "This led to our development of our Next Generation Retail Platform (now renamed Information Superhighway)."
The cloud services API platform serves as a middleware that enables digital experiences and shortens time to market. As a result, Dzadovsky said, "We are able to limit vendor lock-in, avoid point solutions, and easily adapt and scale to what is next."
Rather than creating a new integration for every single digital checkout solution — self-checkout, frictionless or ecommerce, for example — Couche-Tard is able to leverage the same Menu API (to pull down pricebook information) and Order API (to send orders through to backend systems). The retailer can integrate with multiple vendors and power different experiences without having to reinvent the wheel, the chief technology officer explained.
Taking the Initiative
Part of succeeding with technology is not being afraid to take chances and try new things. Learnings come from wins and losses for all retailers, and Couche-Tard is no different.
In the win column is the retailer's loyalty and self-checkout programs. "Our loyalty programs have exceeded expectations. We were able to accelerate the rollout, and we're now in more than 4,000 stores across 10 U.S. business units with Inner Circle," Dzadovsky pointed out. "Smart Checkout is another one that has worked well."
In June 2022, Couche-Tard partnered with Mashgin to install Mashgin Touchless Checkout Systems, branded as "Smart Checkout," at more than 7,000 of its Circle K and Couche-Tard stores over a three-year period.
Other initiatives prove to be a mixed bag, such as Pay by Plate payment technology. First launched in Sweden in 2021, the solution offers a completely frictionless experience that enables customers to pay for fuel using sign recognition and a mobile app.
"Pay by Plate is a good example of a program that worked in one geography but couldn't in another," Dzadovsky shared. "It's running successfully in Europe but when we tried it in the U.S., we found quickly that it wouldn't work because of some intricacies with license plates not being on the front of cars here that get in the way of the technology working consistently.
"We also piloted multiple fully frictionless technologies, but ultimately found it didn't fit well in an existing brick-and-mortar traditional cashier system," he added. "The customers were apprehensive about it, worried about whether the system would work or if they were stealing."
In the loss column is click-and-collect. As with retailers across all channels, the COVID-19 pandemic spurred Couche-Tard to roll out curbside pickup, but it did not take off.
"When COVID hit and everyone was worried about being able to open their doors, we moved really quickly to build a click-and-collect app and activated it at a couple hundred stores, giving customers an option to pull into a stall. But we found that in our channel, that just isn't an option they want to use," Dzadovsky recalled.
Looking Ahead
The one thing you can count on with technology is that something new is always around the corner. As Dzadovsky pointed out, there are several emerging technologies that tech executives find exciting: for example, the ability to leverage data to drive personalization, and ways to leverage artificial intelligence.
"But the most important things are the technologies that make a difference for our customers — that support our mission of making their lives easier, as well as for our employees," he said. "The thing that drives us is when we can put a solution in our employees' hands that makes their shifts a little easier and enables them to better serve and connect with our customers."
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