Retailers Dig Into Data to Improve the Shopping Experience

NATIONAL REPORT — Right now, convenience store retailers have access to more information than ever before — yet not as much as they will have tomorrow and the next day. With all that data at their fingertips, it is crucial to know how to use it effectively.

For several years now, data mining has largely meant digging deep into the numbers and uncovering insights to build a loyal customer base, engage with them when, where and how they want, and get a leg up on the competition. However, by focusing solely on customer data and overlooking the information coming from the total store — and the forecourt — c-store retailers risk missing the opportunity to enhance the overall shopping experience.

"Customer data gets a lot of coverage because of the outsized influence of marketing in the era of Internet and social media. Tech giants like Google and Facebook provide extremely accurate profiles for companies to target via ads. Several techniques have been developed to optimize ad campaigns and measure efficiency via A/B testing," said Suresh Menon, senior vice president and general manager, software and solutions, for Lincolnshire, Ill.-based Zebra Technologies Corp. "Lost in this marketing focus is the importance of analyzing data for the rest of the business, especially inventory and supply chain."

Zebra Technologies offers solutions to elevate the shopping experience, track and manage inventory, as well as improve supply chain efficiency. In 2020, Zebra acquired Reflexis Systems Inc., a provider of intelligent workforce management, execution and communication solutions for organizations across numerous industries, including retail and foodservice.

With smaller selections and high turns, c-store retailers must ensure on-shelf availability of key products, according to Menon. "Stock outages lead to lost sales and poor customer experience. A focus on marketing without attention to inventory could lead to a truly negative outcome where physical or digital traffic is directed to products that are out of stock," he said.

Part of utilizing data effectively, though, is knowing what to do with it.

"A lot of retailers are sitting on large troves of data and often do not use it to maximize value. A digital journey takes focus and commitment," Menon pointed out.

Gaining Visibility

Data can give retailers visibility into their stores — something most convenience store operators are looking for, noted Jennifer Williams, vice president of AccuStore, a GSP company, headquartered in Clearwater, Fla. AccuStore helps retailers collect data from within each store to build a store profile, something that can especially benefit large chains spread across geographies.

"We find a lot of retailers struggle with having clear visibility into their locations, particularly with a higher number of locations, and also because of the high penetration of acquisitions within the convenience store industry," Williams said. "You have these acquisitions that take place and you try to brand and standardize those acquired sites to your customer, but you don't know what those locations look like."

Looking at the data can help retailers standardize, and market and message to their customers in a clean and consistent way.

"It's about understanding what's in those stores and helping them maintain accurate data. In any retail industry, but in particular in the convenience store industry, those stores are ever-changing on a day-to-day basis," she added.

Data-Driven Decisions

Sophisticated retailers capture historical sales and inventory numbers at a granular level, feed it into advanced artificial intelligence/machine learning models, and are then able to forecast demand with a high level of accuracy. In turn, the forecast can be used to drive a series of decisions around inventory allocation, replenishment, reordering and pricing.

"The combination of systematic data capture and advanced analytics can significantly improve the operating margin of a retailer," Menon pointed out.

He cautioned, however, that a retailer trying to undergo a digital transformation should understand that success is more than just data and algorithms. It is also about people and organization.

"Change management is often overlooked," he said. "There are many examples of retailers implementing analytical systems, only to find their team going back to their legacy spreadsheets. The last mile of adoption of data-driven analytics is just as tricky as getting the costs of last mile delivery under control."

Knowledge is power, but that knowledge can get lost in translation, so to speak, if different aspects of an organization are working with different — or inaccurate — information, Williams warned. When multiple divisions all work siloed and with their own set of data, you lose data integrity and human error occurs when shared back and forth, she said.

"Legacy systems [and] outdated processes make it hard to get your arms around all the data and utilize it. One centralized repository for all to access store data can function as the 'single source of truth' that operations, marketing and store managers can all rely upon," she explained.

And data capture and analytics shouldn't be limited to within the four walls of the store. There is so much that happens on the exterior, including outdoor seating, car washes and the forecourt.

"Having the insight and knowledge to what is happening on the perimeter of the outside of the store — as well as back of house for facility purposes — it is definitely an overall arching theme by request to have that insight of the total property," said Jamie Banks, marketing manager for AccuStore.

Boise, Idaho-based Stinker Stores, operator of 110 convenience stores, recently tapped AccuStore to implement a retail intelligence platform. The move is aimed at giving Stinker Stores detailed store profile data to drive strong executions.

AccuStore's parent company, GSP, also works with convenience retailers as a marketing partner, including Fort Worth, Texas-based Yesway and Powell, Tenn.-based Weigel's.

Getting a Leg Up on the Competition

Unlike grocery or big-box stores, convenience stores sometimes have to sacrifice space to maintain convenience, but an important part of being convenient is having the products customers need and want on the shelves, and letting them know it.

As Zebra Technologies' Menon noted, out-of-stocks lead to lost sales, which hurt the topline; however, with space constraints, c-stores cannot carry too much "safety stock."

"Advanced analytics can help in precisely these situations by creating an accurate forecast and recommending an optimal reorder quantity," he said. "This balances the inventory to maintain high service levels without overstocking, which leads to potential discounts."

The competitive nature of the current retail landscape is driving the need to acquire new customers and retain those customers, having them come back multiple times and become loyal to the brand, according to AccuStore's Banks.

"Having that insight from the data allows you to take appropriate action and, hopefully, take it to the next level and outperform the competition," she said.