Mobile opportunities top retailer interest, with loyalty, social media close behind.
Customers aren’t the only ones whowant more control. Employees demandit, too, says Mize of Pinnacle. Thoughhis company has provided the option ofremote access for several years, demandfor the option has spiked.
“The market is really starting toembrace it and demand that ability toaccess data in a more immediate fashionfrom wherever they are,” he says. “It usedto be a trend focused on the [top]-levelexecutives, but it’s gone down to theentire organization, whether it’s operations,district managers or marketing.The entire organization is trying to gainreal-time access to their systems.”
To access data remotely, solutionstypically need to be browser-based oreasily accessed via a mobile device. That’sthe fi rst requirement, Mize says. Second,a secure pathway must exist from thepublic world into those private systems.
Today, the proliferation of smartphones,iPads and tablets, as well as thesecurity options available, has created anentire ecosystem of possibilities. “Thinkback fi ve years ago,” Mize says. “Unlessyou had a BlackBerry—which was thego-to cellphone for businesses wantingto give employees secure access tocompany emails—there was no way toeffectively get mobile reporting unlessyou were chained to a PC.”
The importance of remote access iswhat drove officials at Tedeschi FoodShops, Rockland, Mass., to overhaul thecompany’s communications network.Doug New, vice president and CIO forthe 194-store chain, says, “One of ourbig drives is, through technology, to dowhat we can to make the lives of ourstore operators better, make their jobseasier and remove hassles.”
Such drivers raise the goal of real-time information. Greg Gilkerson, presidentof PDI, Temple, Texas, says simply,“People want to know.”
Tank-monitoring systems, pointof-sale (POS) and the communicationnetworks that exist for the most part arecapable of providing real-time data. Inthe fi eld, such information can identifyinequities in supply and demand. Whilea store on one side of town may be runningout of a product, a store on theother may have an abundance of it. Soa quick transfer may mean added profi t.
Most inventory systems, Gilkersonsays, are two to three days behind, and“people are hungry to get closer to theirbusinesses.”Just as the smartphone may be themailbox in this new day of accessibility,loyalty programs are the mail and, in thenear future, the personal assistant whosifts through the mail.
Retailers undoubtedly have loyaltyon the brain, with the range of programsgoing from pilot to fully embedded.
John Winter, vice president of planningand development for the 18-storechain Quality State Oil, Sheboygan, Wis.,speaks to the latter. In place for sevenyears, the company’s Q-Mart Rewardsprogram is arranged around a “club”concept, wherein customers buy a certainnumber of the same item, such ascups of coffee, and eventually get onefree. The program now tops 70 clubs andspeaks to the power of loyalty:
- $7 million in new sales since theprogram began.
- 80% of all gallons of milk purchasedgo through the Q-Mart program.
- Its new craft-beer club boosted categorysales by 300%.
- Targeted offers and cross-promotionscan drive up sales of specificproducts, making the chain the area’sbiggest retailer of items such as cases ofbottled water, family-size bags of chipsand frozen pizza.
- Its loyalty customers spend $2.50more than non-loyalty.
- When a competing store openedup next door to a Q-Mart, the Q-Martretained all its loyalty business but lost15% of its non-loyalty customers.
- Vendor partnerships flourish,fueled by concrete throughput data.Through its partnership with HoustonbasedCITGO, the program has givenaway $100,000 in random rewards.
With its loyalty provider, Outsite Networks,Norfolk, Va., Quality State recentlystarted rolling out its rewards programto its 60-store dealer network, callingthis version Badger Rewards. The biggesthurdle is educating store staff, says ScottStangel, wholesale marketing managerfor Quality State. Employees are the frontlines of communication to customers.
“Building the program requires youto be connected through your salesassociates,” he says, pointing out howmystery-shop bonus programs canreward employees for talking up loyalty.
It’s an ongoing battle, Winter says.“You have to differentiate yourself andgive the consumer the advantage,” he says.
“Over the years we’ve identifi ed winningclubs … and play off those. [Forothers] we go in different directions,keeping it interesting for our customers.”
Though interest still exists around socialmedia and sites such as Facebook andTwitter, questions remain. For Bullardof Flash Foods, the bottom line is brandawareness.
“It’s a presence you’ve got to have,”she says. “As time goes by, that presencegets more important, but whether there’sfi nancial gain outside of promotion, wedon’t know yet.”
For Stangel of Quality State, socialmedia will eventually play into howretailers can reach consumers based onlocation. “We’re gearing up for the newconsumer who goes everywhere with aphone,” he says.
Along with location-driven applicationsin cars, retailers can use “socialmedia to track individuals, find themwherever they are and [connect us to]their purchase habits,” Stangel says.buy will be signifi cant for retailers.
“We have the ability now that we didnot have before to collect more datafrom stores, pull back all transactiondata and take advantage of that in wayswe weren’t able to in the past,” New says.“We have goals of knowing what’s beingsold in conjunction with what, what truemarket baskets are and how it changesby time of day.”
New hopes to develop a loyalty programthat can ultimately tailor mobilecoupons and discounts to specificindividuals. “The accessibility of data—more appropriately, the accessibility ofdata presentation and mining tools—will make it easier to get informationand draw correlations,” he says.
Analytical tools have evolved inrecent years, helping c-store retailerstackle industry-specifi c questions. MarkHawtin, senior vice president of businessdevelopment for KSS Fuels, FlorhamPark, N.J., says retailers make manydecisions in “blissful ignorance” of theramifi cations.
For instance, retailers often changefuel prices without consideration of howthey’ll affect in-store sales. Lowering fuelprices will increase pump traffic, butwhat if it inadvertently starts a run ona related in-store product? “If I increasedemand [in fuel], do I have enoughproduct [in the store]?” he says.
“And what about labor schedulingand labor workload?” asks AdrianPreston, chief technology officer forKSS Fuels. “People want to use big datato solve business problems: How do Imaximize effi ciency?”Developing the logistical connectionsto transmit data is the backbone of allof these technology trends, says New ofTedeschi. That’s why his chain recentlycompleted an overhaul of its internalcommunications network, broadeningits ability to transmit data and preparingthe chain for future data demands.
Its biggest motivation was eliminatingpaper, New says. “We had incredibleamounts of paper produced routinely—financial statements andmarketing information intended for district managers or storeoperators,” he says. “We needed greater bandwidth to grab theinformation electronically.”
Now Tedeschi can use business applications to handle processessuch as reordering. With the company’s heavy emphasison fresh foods, the ability for stores to order directly from thecommissary was a huge benefit, New says.
Connectivity today is “more pervasive, more available and,most importantly, more secure,” says Dan Foster, president ofbusiness markets for MegaPath Corp., Pleasanton, Calif. AsTedeschi’s network provider, Foster says compliance to Visaand other credit-card standards for data security (commonlyknown as payment card industry, or PCI, standards) is criticalto daily operations and reducing exposure to data theft.
That said, Foster says retailers have to make a commitmentto their communication choices. Top decision makers needto be involved and thoughtful conversations with businesspartners need to happen. “You have to ask yourself what yousee over time, so you can future-proof your business withtechnology,” Foster says.
Communications becomes even more important as chainsopt for “hosted” solutions, putting many of their basic businessprocesses into cloud servers.“Retailers are very excited about the potential value that[hosted] products can give them,” says Groff of NCR. “Itlowers the barrier of entry while leveraging the same ‘brain’ ”that a larger competitor may use.
The Big Vision
Though the top themes identified here are an informal collection,what’s clear is the difference between the tech climatetoday vs. just two or three years ago. Ubiquitous technologiessuch as smartphones and tracking systems in people’s cars areinspiring retailers to dram big.
“As you and I are driving around, our mobile device ora satellite system will tell us when we get near to a preferredretailer,” says Hawtin of KSS Fuels. “I’ll get an offer that popsup that says, ‘Pull in—you’ll get a great deal.’ ”
Ultimately, that vision unifies the various themes mentionedby those interviewed, defining the many parts neededto reach that goal.
“If you’re in a market that’s at best flat or declining,” Hawtinsays, “your future is built on the ability to [persuade] yourcustomer to buy more.”