The Road You’re On Is Driven by Technology

Despite all the technology built into today’s vehicles, most drivers still have to pull over once in a while to fill up the tank. Convenience stores and truck stops are also popular for a quick, caffeinated pick-me-up, a salty snack or a gallon of washer fluid.

But the days of the generic c-store are long gone. With driving on the decline, c-store retailers can no longer depend solely on the profits from fuel sales to stay afloat, which has created a rush to differentiate and compete on other offerings. Most c-store brands have focused on improved customer service, branded premium coffee, higher-quality food marts, and loyalty programs to maintain and attract new customers.

Now, with many c-stores on a level playing field, business managers are looking to remove costs from the equation, while maintaining quality and increasing sales.

LEADING THE PACK

A number of c-store retailers like Wawa Inc. are already ahead of the pack in adopting technology to optimize business operations.

With more than 700 locations (350-plus offering fuel) in Pennsylvania, New Jersey, Delaware, Maryland, Virginia and Florida, Wawa’s 22,000 associates have become known for high-quality service and food. More than just “convenient,” Wawa’s draw is its made-to-order hoagies, hot breakfast sandwiches, specialty beverages, and assortment of soups, sides and snacks.

Wawa’s ability to understand and deliver on its customers' desires isn’t just luck. The company relies on an integrated suite of software applications that give store managers detailed insight into which products are selling, at which price points and at what times.

With proper software, Wawa is able to understand the exact mix of who is buying what on an individual store basis. This information then directs inventory, ordering and receiving to streamline merchandising, marketing and sales.

Running its business at optimum efficiency is one way Wawa stays on top — a strategy that is especially helpful when scaling to add new stores. Having insights into customer-buying preferences and behaviors was helpful in determining how new stores might better address customer needs, down to details like product placement.

THE VALUE OF TRANSACTION HISTORY

Having a 360-degree view of the customer is critical for moving toward a customized, one-to-one marketing or promotions program. Just as important is the backend IT infrastructure that drives this interaction between retailer and consumer. C-stores that can combine real-time personalized promotions with shoppers’ point-of-sale transaction history have the potential to create a serious market advantage. 

Transaction history (something easily recorded and assigned to a loyalty account) contains a multitude of data, including:

• Time, date, location and frequency of c-store visits;
• Size and value of each visit;
• Value and frequency of coupon usage; and
• Individual items purchased (brand name vs. store brand).

Using big data, transaction history can be loaded and accessed in real time to trigger personalized promotions through machine-to-machine technology. It’s important to have a singular database as a repository that collects transactional data previously spread over multiple independent applications in diverse formats. It provides a common foundation for all consuming applications.

This results in a more personalized relationship with the c-store and potential benefits for the consumer.

Imagine this scenario: John walks into a c-store to grab a quick breakfast before work. He picks up a breakfast sandwich and the presence of his smartphone trips a digital marketing sensor or beacon. The beacon recognizes John’s device and location, and quickly sends a promotional offer to his phone regarding the new (and higher margin) breakfast smoothies. Prompted by the price break, John heads over to get a smoothie instead of his usual coffee and thinks it’s his lucky day!

In actuality, there’s no luck involved. A big data analytics engine studied John’s transaction history, identified a product related to breakfast sandwiches, and priced it just right to entice John to purchase a higher-margin item he didn’t plan on buying. This all happened without human intervention and in a fraction of a second.

Scale this model to several interaction points throughout every store and it’s easy to see the impact precision retailing can have on the bottom line. These kinds of personalized interactions can increase revenue from existing customers and also encourage new customers to connect with a brand in order to get benefits tailored to their habits.

RISKS & REWARDS

Unfortunately for c-stores, the top brands can’t sit still because the market is still evolving, and c-stores need to be ready to adapt to changing behaviors.

One of the more seismic shifts is mobile. Gartner Research forecasts that mobile payments will top $720 billion per year by 2017. Payment systems, security applications, networks and backend financial software programs will all need to learn how to play in this new world or be replaced by more advanced systems.

Regardless, the increased use of mobile devices and the resulting data can give c-stores even more insight into consumer behaviors. Data (aggregated and anonymous) can be segmented by detailed demographics, locations, gender, device types and usage.

Marketers can find out information like:

• What are the most common traffic patterns within our target consumer base?
• What types of activities are consumers engaging with on their phones during specific times?
• Did a specific mobile or external media trigger (such as a TV ad or SMS campaign) lead to common mobile-device activities?

A study from BizBuySell.com found only 38 percent of small-business convenience/liquor store owners (grouped together in the study) and 31 percent of gas station operators believe disruptive technologies represent a threat to their business. While this insight may not be a surprise, it definitely is cause for concern.

Mobile payments, apps, personalized promotions and other digital tools that support the “connected generation” will be expected. The c-stores that don’t follow the customer toward these digital tools may find it more difficult to compete for customer attention.

In order to stay on top, the leading c-store brands today must recognize the road they’re on is driven by technology, and it’s not likely to exit anytime soon.

Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.