Murphy USA knows a lot about its loyalty customers. And now, the convenience-store chain is looking to take that data and create digital offerings as part of its digital transformation, Murphy USA president and CEO Andrew Clyde said.
Clyde, who spoke at the Raymond James Institutional Investor Conference in early March, said the company is leveraging machine learning and advanced technologies to increase personalization in its loyalty program and capture more share of wallet from the same customer.
- Murphy USA is No. 4 on CSP’s 2023 Top 202 ranking of U.S. c-store chains by total number of retail outlets.
“And the personalization trials that we’ve run are generating significant uplift, because we know how one group of people wants to be promoted to versus another group,” Clyde said, according to a transcript of the event provided by Murphy USA. “And when you break down these customers into different DNA segments, you can really tailor to their needs and what they’re looking for.”
Murphy Drive Rewards is five years old, and 65% of MDR members who joined in 2019 are still loyalty members today, according to Murphy USA’s investor’s presentation from the event. Customer spend has increased each year since 2019. Loyalty members made five trips per month in 2023.
Demand and Labor Planning
Murphy USA is also leveraging advanced demand forecasting to drive a larger basket with better availability while also improving labor scheduling accuracy.
Clyde said when he joined the company in 1993, “the demand planning was a sheet of paper in the back kitchen with a pencil, and people were keeping track of how many items were in the warmers, and how many items were sold and how many items wasted, and there were some heuristics that went into it, but it was pretty simple.”
Now their “super-advanced demand forecast” takes into account multiple demand forecasting on things like weather patterns and holidays, Clyde said.
“And we found that we can actually predict demand very, very well for those items,” he said. “And what it has done is improved the sales and the bottom-line profitability. And yes, shrink is up a little bit, but these are high margin, 50% to 60% margin items. So by selling a lot more, we’re generating a lot more net profitability.”
With that insight into demand forecasting, Murphy USA can further optimize its labor planning, Clyde said, which is the “single biggest cost for a convenience-store chain.”
Upsell Suggestions
The company is also piloting smarter upsell suggestions at QuickChek touchscreens through more sophisticated basket analysis. Before this, it didn’t matter if a customer was there at 7 a.m. or 2 p.m., the touchscreens would try to upsell the customer to the chili cheese fries, for example.
“That’s not what I’m looking for at 7 in the morning. Right now, we know a lot about our customers, the day parts, what other people like when they buy that same item,” he said. “Our suggested selling has more than doubled at those stores.”
In the future, the company is looking into how generative artificial intelligence (AI) can play a role in its business through transaction processing, exception reporting and more aspects of the business that “could be more highly automated than they are today,” Clyde said.
El Dorado, Arkansas-based Murphy USA completed its acquisition of QuickChek in January 2021. Murphy USA operates one of the nation’s largest convenience-store chains, with more than 1,700 stores under the Murphy Express and QuickChek brands in 27 states, located primarily in the Southwest, Southeast, Midwest and Northeast, the majority of which are next to Walmart Supercenters.
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