The key to better business is in the numbers. How do yours stack up?
By Traci Dawn Carneal, Contributing Editor
Anymore, data analysis in the convenience store industry is as accepted as loss prevention tools and loyalty programs. Like other operational strategies, it’s how a c-store uses such technology that often forecasts how much benefit is derived from it.
Just remember that competing retail channels such as grocers are upping their data analysis game considerably.
For example, Kroger is using sophisticated heat sensors at entrance and exit doors, as well as check stands to monitor customer traffic. The goal for implementing the system was to improve the customer experience by reducing the amount of time customers have to wait at check out. The sensors detect shoppers coming and going, figuring a percentage of the entering heat sources are going to show up at the register within an average amount of time.
While coordination of open registers may not be an issue for the typical c-store, heat mapping can be used to track shoppers’ patterns as they walk the aisles. Do they go straight to the cold vault upon entering a store and then directly to the register? How many grab a drink then peruse the candy or snack aisles? What percentage makes a secondary purchase from another category during a promotion?
The possibilities are endless when it comes to improving the consumer’s experience with the latest technology trends. While heat mapping may be only a “wish list” item for most c-store retailers, they still rely on data analytics, such as market basket analysis and mobile marketing, to improve operations and sales by learning what sells together in one transaction, where theft is occurring, what sells from month to month, best store placement of items and success of promotions.
According to Frank Quinn of strategic marketing firm CSC Sales & Marketing, “Those not using data will not be around 10 years from now. This is a competitive environment, and you have to use data to stay in stock, to identify return on investment, to identify and isolate theft…you have to. From the tier one retailers like Wawa and Sheetz to the mom and pops out there, everyone is using data in some way to improve their business.”
FLASH FOODS FOCUS
Flash Foods, a 173-store chain with locations in Georgia and northeast Florida, captures data by transaction, item, discounts and tender type and produces market basket reports that show month-to-month category sales. According to Jenny Bullard, chief information officer for Flash Foods parent Jones Co. Inc., the data collected allows the marketing department to view sales categories by the NACS’ categories, broken down to sub-category level.
Database dashboards reveal monthly and year-to-date comparisons.
“Our market basket reports allow us to know what items are being sold together in one transaction,” Bullard said. “This is useful when we have a promotion going on one item that we have targeted to improve sales on an associated item.” The company uses an item-level inventory system, so it is helpful the chain can gauge inventory at one store or chain-wide for any item in particular.
“This business intelligence tool provides the management team with alerts and reports based on targeted events happening at the point of sale (POS) or at the pump,” Bullard added. “For instance, at pumps we will know if the paper is out or the pump door has been opened. As for activity inside the store, alerts include voids, returns, price overrides, for example, which helps control internal theft.”
Flash Foods uses Pinnacle EPM software to capture data for sales, transaction date and time, tender type and events that happen daily both chain-wide and store specific. This information uploads hourly across the chain’s network to the business intelligence database at the corporate level.
Bullard said the benefit of having scanned data stored in a database with an easy-to-use reporting tool is that the marketing department can produce its own reports.
“The ability for them to drill down into category and item sales information when needed has helped improve our sales and, ultimately, our gross margin inside the store,” she said. “Being able to get alerts and reports on events that impact inventory has allowed us to significantly decrease our over/short line on our P/L, thus driving more profit to bottom line.”
The Flash Foods mobile application provides another opportunity to collect data and assess customer usage.
GETTING CONNECTED
It now may be easier for c-stores to take their analytics to a higher level with The Internet of Things (IoT), sometimes called the Internet of Everything, the concept of connecting physical objects or “things” embedded with electronics, software and sensors to allow for the exchange of data that enhances value and service.
Yet many of the software companies leading the IoT movement have their own definitions. For example, Microsoft noted the Internet of Your Things is when your enterprise puts together devices, software, cloud services and business intelligence tools from Microsoft.
Cysco called its system the Internet of Things.
No matter what you call it, experts have estimated it will be comprised of almost 50 billion objects globally by 2020.
Kwik Chek Food Stores, based in Durant, Okla., is an early adopter of IoT in the convenience channel.
The 39-store chain with locations in Texas and Oklahoma partnered with P97 Networks, building on Microsoft Azure IoT services and other Microsoft technologies, to create a pair of solutions: PetroZone Mobile Commerce, a mobile app that enables navigation, cashless payment and smart digital offers, and PetroZone Retail Fuels Module (RFM), a cloud-based solution powered by Microsoft Dynamics AX modern POS system that integrates with the forecourt system, which controls the fuel pumps, back office and financial systems.
Kwik Chek’s new technologies connect its customers’ mobile phones to gas pumps, store POS terminals, loyalty programs and more, while integrating existing store infrastructure and software that tracks inventory and fuel. Customers can use phones to locate stores, pay securely, and receive reward points and targeted digital offers. The company leverages the cloud-based POS system for quick, reliable transactions and advanced analytics.
A Kwik Chek representative was not available for comment for this article, but Daniel Gaddy, chief technology officer for the chain, said in a recent Microsoft case study, “People count on us for quick transactions. They want to save time by coming to a convenience store. So reliability is core to our industry. The system also allows for rapid updates to stay current with new innovations from Microsoft, P97 and their partners.”
Inside the store, the system integrates store inventory, POS, pin-pad systems and fuel pumps, providing better management of everything from purchasing, inventory and pricing to payments and accounting. The module also works with existing infrastructure, such as fueling site controllers, electronic payment systems and car wash systems.
Benefits of the new Kwik Chek system, according to the case study, include:
• Increases customer loyalty with improved convenience and personalized service with digital offers.
• Spawns operational efficiencies that transform business operations quickly and affordably, connecting stores within four hours.
• Predicts anomalies with increasing precision by receiving alerts from the system, and feeding information back into it to identify root cause.
•Enables Kwik Chek to better control inventory, reduce costs and create more effective marketing. The module also works with existing infrastructure, such as fueling site controllers, electronic payment systems and car wash systems.