4 ways technology innovation is shaping convenience
If c-store operators were dipping their toes into technology before the pandemic, they dived right in during.
That is evident in a recent survey from Zenput and Technomic, which found the top priority for most c-store operators (51%) over the next 12 months is “implementing new technology.” In addition, 57% of respondents were found to be using tech to automate aspects of their operations, up from 27% in 2020.
Clearly, operators understand to be “essential” not only during the pandemic but well after, the c-store has to undergo a digital transformation.
One of the ways c-stores are looking to transform is by being more predictive in their planning, explains Scott Langdoc, head of worldwide grocery chain, drug and convenience/fuel retailing at Amazon Web Services (AWS).
“With stay-at-home mandates significantly reducing vehicle travel, convenience retailers experienced a shift in focus from fuel toward groceries and essentials, as well as a shift in purchase approaches,” he says. “These shifts brought on a need for broader and quicker access to business signals, such as demand intelligence, supply chain visibility, and macro-market impacts like commute reductions.”
Parkland is working with AWS on capturing these signals and acting on them using AI (see: “Personalizing the customer experience”).
The industry is also collecting data from POS and mobile apps for customer loyalty and pick-up and delivery (and even in-store bots! See: “Supply chain intelligence”) to reshape everything from the in-store experience to promotions and pricing.
“Digital technology and integrated shopping experiences are synonymous with data collection,” says Dan Doulos, country manager, Canada, for CPG and grocery advisory firm Advantage Group. “It will enable convenience retail to be more intentional about collecting information and curating the shopping experiences to reflect their shoppers’ preferences.”
Supply chain intelligence
The pandemic illustrated the importance of having the right product, at the right place, at the right time. Think toilet paper, hand sanitizer and milk, which were scarce commodities at the height of the pandemic.
“Convenience retailers are looking for greater visibility and transparency into the supply chain to prevent stock-outs of high-demand, limited availability items,” says Langdoc.
Supply chain decisions used to be driven by static sales figures. Now, however, supply chain AI software considers variables like POS data, pricing, local market conditions, time of year, and even social media chatter in making forecasts.
Accenture, for instance, has developed an Intelligent Revenue and Supply Chain (IRAS) platform on the Amazon Web Services Cloud that can forecast the quantity of SKUs that need to be ordered on a rolling basis to keep key inventory well-stocked.
Bots are also helping c-stores keep atop of inventory. Couche-Tard’s Circle K in the U.S. is piloting the use of mobile phones and small self-flying drones at Texas locations to get real-time shelf visibility. Pensa Systems, which specializes in shelf-intelligence data to improve product planning and minimize stockouts, provides the drones and analysis in a backend cloud.
“Leveraging advanced technology to continuously improve in-store availability of key products is a top priority,” says Mike Bott, head of digital innovation at Circle K, of the partnership.
Personalizing the customer experience
Thanks to digital technology, c-store operators are collecting tons of transactional information about their customers. Now operators are looking to leverage that data.
Parkland recently began working with AWS on gleaning insights that can optimize its loyalty program, including Journie Rewards in Canada, with more personalized offers.
“We can think about Parkland’s strategy through two lenses,” says Langdoc. “First, an improvement in the frequency and accuracy of captured transactional (e.g. POS) information that can be used to further personalize customer engagements and optimize business operations based on these business signals.”
Think, for example, of a loyalty customer who purchases a fountain drink in a store and then gets a personalized discount for gas because she hasn’t purchased fuel at the store in the past month.
“Secondly, Parkland is capturing more customer-specific insights and broader behavioural analytics to better understand the shifts in shopping journeys and customer needs,” says Langdoc. “These broader and quicker insights can be further enhanced by applying machine learning models to be more predictive in the actions that Parkland can take.” This could be in its messaging to a customer or in determining the product mix, menu offerings and services (like designated parking spots for customer pick-ups) a location should offer.
Whether you have an app and loyalty program (or not), firms like Kalibrate use sophisticated modeling software based on consumer segmentation data to help retailers truly understand who their customers are. “By knowing where people are travelling from, whether it be home or work to get to your site, retailers can create and deliver targeted tailored marketing and promotions to drive more people to their store,” says Rich Wilcox, VP, solution engineering at Kalibrate, a consulting firm with a fuel and convenience retail analytics platform.
On-shelf signage goes digital
Digitized on-shelf labels look clean (an important factor in a COVID-19 world!), are environmentally friendly and give operators more versatility to edit pricing.
“All of our stores use digital labels,” says John Douang, co-founder and CEO of Aisle 24, which is currently in six markets in Ontario, operational in B.C. and Quebec, and opening locations in Alberta, Manitoba and Atlantic Canada this year.
Read: Aisle 24 to expand 24/7 cashierless retail concept across Canada
Given its cashierless model, Douang says digital labels are “an important factor in how we control and make more efficient our operational labour input.” But he also recommends it to anyone looking to drive sales through data analytics.
“The labels allow you to adjust pricing immediately and regularly according to market conditions,” says Douang.
Aisle 24 uses several digital label products, including from Danavation, which this year added a Petro-Canada in Vegreville, Alta., and an Esso in York, Ont. as customers.
John Ricci, Danavation’s CEO, says it has one client who changes pricing at the end of every business day based on competitor pricing, while others use it to proactively react to local conditions.
“Whether a heat wave, storm or a local sports team winning a championship, the system allows you to respond and change pricing with just a keystroke, thereby capturing more margin or blowing out particularly inventory,” says Ricci.
Britt Mills, senior director of customer experience at Mobiquity, is bullish about digital on-shelf signage for both small and large operators. “While it allows for easier viewing in many cases of prices and product details, it also provides c-stores with greater versatility in stocking and shelf displays,” she says. “It’s much quicker and easier to edit signage, advertise deals and promote a store’s branded and limited-time products with digital signage.”
The future of checkout
With consumers looking to get in and out of stores quickly, many experts believe an autonomous checkout option will gain favour.
In Phoenix, Circle K is piloting contactless, autonomous checkout with Standard Cognition. Using its ceiling-mounted cameras and machine vision software, Circle K is enabling customers to shop and walk out with their purchases without having to scan them or wait in line to pay.
Transactions are processed through an app, which customers check into before going into the store. Or they can pay at the cashier, without the need for anything to be scanned since the AI has tracked what the customer has picked up and relayed the information to the cashier.
Standard Cognition spokesperson Alex McClure told Convenience Store News Canada that “the pilot is going well and we are working alongside Circle K to bring it to general availability.”
Exxon Mobil has eliminated friction from the process of buying fuel at the dispenser by enabling customers to use their vehicle’s Alexa-enabled voice recognition functionality (“Alexa, pay for gas!”).
Langdoc says c-store operators should look at other retail categories for inspiration, too. Nike, for instance, has a mobile app feature, Instant Checkout, that enables in-store shoppers to pick up an item, scan it and pay for it with their saved credit card.
“That ‘no lines, no waiting’ offering would be a hit with customers who find themselves frequently coming into their local c-store for only a handful of items, while running errands or on their way home from work,” he says.
Originally published in the September/October 2021 issue of Convenience Store News Canada.