Meeting at the Intersection of Foodservice & Technology
NATIONAL REPORT — Success in the foodservice category has long since passed the point of "nice to have" and reached the point of "absolutely required," especially among growing convenience store brands that are extending their footprints into more competitive markets. To get an edge on their competition and ensure their success, many retailers are turning to innovative advances in technology, but challenges to everyday operations are changing what tech these operators embrace to advance their foodservice agendas.
In a tight labor market that has forced operators to choose their investment priorities, adding delivery is no longer an urgent goal for many c-stores. Data from the 2023 Convenience Store News Technology Study indicates that the percentage of c-store operators reporting they have no plans to add delivery jumped from 36% to 58% year over year, and just 20% confirmed that they do still plan to add delivery in the future.
Instead, c-stores are looking to technology to streamline back-of-house tasks. Operational efficiency is the top priority, and retailers anticipate a significant increase in automation over the next few years. The "2023 Connected Retail Experience Study," a collaboration between Incisiv and Verizon Business, found that supply chain uncertainty pushed real-time inventory management to the top of many retailers' investment agendas. The deployment of artificial intelligence (AI) to improve operations is also expected to increase.
"Improving operational efficiency is crucial for retailers in today's competitive landscape," said Gaurav Pant, chief insights officer at Incisiv. "Automation is imminent, and retailers must embrace it to streamline processes and reduce costs."
AI generated a great deal of discussion in 2023, and foodservice solutions such as PreciTaste are already embracing AI to help c-stores either avoid stocking too few foodservice items and running out early, or stocking too many and getting stuck with unnecessary food waste. The offline-first, plug-and-play, scalable solution is based on a central hub that assists managers in directing team members and providing precise guidance to streamline their tasks. Its prep assistant predicts demand and provides guidance on how much to prep per day, and its planner assistant uses quantity forecasts to produce an automated production schedule.
"The models go through hundreds of cycles of self-improvement each day," Hauke Feddersen, vice president of global operations at PreciTaste Group, told Convenience Store News. "When we deploy 10 systems today, tomorrow each of them will predict demand differently based on the individuality of the location."
The availability of kitchen equipment that incorporates automation is also on the rise. While retailers may not be able to immediately invest in new units, attributes that streamline tasks for foodservice employees or free them up to assist customers should be top of mind when it comes time to upgrade. Many ovens and fryers auto-cook items for the perfect amount of time and enable recipe updates via Wi-Fi, while bean-to-cup coffee machines are nearly ubiquitous and offer both customization and freshness while freeing store associates from having to regularly start a new brew. Some dispensing units offer self-sanitizing as well, such as Fresh Blends smoothie machines.
On the customer-facing front, convenience store chain Texas Born (TXB) considers the key to taking advantage of technology in the foodservice space as engaging customers in the "phygital" space, aka both in-store and digitally.
Members of the TXB Rewards program can regularly engage with the brand and earn extra value flexibly by getting loyalty points for every dollar spent inside a TXB store and every gallon purchased at the pump.
Having the option to choose how they spend those points — whether it's as cash in-store, as fuel discounts at the forecourt, as charity donations, or as purchases of TXB and national branded products — lets them leverage their membership however works best for them. Customers can also use the TXB mobile app to order ahead and schedule delivery, as well as play games to win free prizes and discounts.
All of this ties in with the retailer's across-the-board, "100 percent" focus on its foodservice program. No matter how or where consumers are engaging with the brand, it ultimately ties into promotion of TXB's prepared food and beverages.
"We start the messaging outside. You start seeing food at the pump," TXB CEO Kevin Smartt said during CSNews' 2023 Convenience Foodservice Exchange event, pointing to the food-centric digital and physical signage that drivers see as they gas up. "You see the outdoor dining facility. When you walk in, you get a very fresh-feeling store. You see a lot of different connotations of food."
C-store brands that don't currently have a loyalty program should take steps to develop one as soon as possible to maximize food sales. Data from the "Paytronix Loyalty Report 2023" shows that compared to other foodservice outlets like quick-service and full-service restaurants, c-store loyalty programs generate the highest increase in check sizes across all segments, with loyalty member checks 12% higher. Additionally, loyalty guests who provide their email addresses are 100% more likely to visit, whereas full-service restaurant visits occur 25% more often and QSRs see an increase of nearly 50%.
"As guests increasingly expect more from their relationships with brands, we anticipate that loyalty programs will continue to grow in value while becoming more cost-effective due to advances in predictive technology and artificial intelligence," said Jeff Hindman, CEO of Paytronix.
To get the most out of loyalty programs once they exist, c-stores need to make their members feel valued and let them know they are viewed as individuals, not just numbers. This can include offering personal, exclusive and unique rewards and promotions, such as no-strings-attached birthday treats and discounts on their favorite menu items and beverages.
"Creating that connection is really important," said Ryan DiLello, Patronix content specialist.
Retailers don't have to follow the same format as other c-store loyalty programs; by incorporating what is unique about their foodservice program and leaning into what their customers like about it, they can build success.
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