NRF's (National Retail Federation) Big Show 2024, held in New York City earlier this month, proved to be a transformative event for the retail industry. There were a staggering 40,000 attendees, 6,200 brands, 1,000 exhibitors, and 190 presenter sessions from over 100 countries around the world. It was also great to see several convenience-store chains in attendance this year including 7-Eleven, Jackson’s, Pilot Flying J, QuikTrip, RaceTrac, Wawa and The Wills Group.
As an attendee, I had the privilege of gaining valuable insights into the latest advancements in technology and innovation. Here are some of the notable trends I observed:
Leveraging the Power of Artificial Intelligence
Artificial Intelligence (AI) was a ubiquitous topic at NRF's Big Show 2024. AI has transitioned from being a mere technological buzzword to a practical tool that is revolutionizing the retail industry. Every presentation touched on AI and it was highlighted in nearly every exhibit.
During my “big ideas” session, I had the opportunity to highlight how retailers can harness the power of AI to optimize various aspects of their operations. For example, by implementing AI algorithms, we can optimize email campaign send times, the specific channels used for communication (email, SMS, app push) and even determine the most effective visuals for marketing materials. These AI-driven techniques have consistently resulted in increased open and conversion rates, leading to higher sales and improved marketing effectiveness.
Furthermore, AI has also been instrumental in enhancing customer service and experience in convenience stores. By leveraging AI-powered chatbots, customer complaints can be addressed instantly, deflecting cases that would otherwise require time-consuming efforts from call center specialists. Voice-AI technology has also streamlined the process of ordering pizza over the phone, ensuring consistent service and allowing for suggestive upsell on every call. With the convenience-store industry having amassed vast amounts of data through loyalty programs, online ordering, and digital marketing initiatives, the time is ripe for embracing AI technologies to activate real-time campaigns, enhance personalization and gain a competitive advantage through increased market share.
Moving Towards Unified Commerce
As the retail industry continues to evolve, the shift from multi-channel to omni-channel and now towards unified commerce has become increasingly apparent. Unified commerce refers to the integration of back-end systems with customer-facing channels, facilitated by a single platform. This allows for seamless customer journeys and provides retailers with a unified view of shopper interactions, products and management systems.
In practical terms, achieving unified commerce necessitates centralizing systems and data management. This entails integrating online ordering platforms with loyalty programs, aligning point-of-sale systems with pricing databases and leveraging modern customer data platforms (CDPs) in conjunction with messaging technology. By adopting such a unified approach, retailers gain comprehensive visibility into their entire operations and can extract invaluable insights to make informed decisions.
Convenience-store retailers should prioritize mapping out their customer journeys, carefully evaluating their technology architecture and making strategic investments in first-party customer data. By doing so, they can both consolidate and enrich their data, enabling improved marketing efforts at scale. The time is now given investments in branding, digital experiences and prepared foods.
Embracing Retail Media Networks
NRF's Big Show 2024 kicked off with an entire day dedicated to retail media networks, illustrating the growing importance of this emerging phenomenon. It is projected that spending on retail media networks will exceed $100 billion by 2027. While numerous retailers across industries have already launched their ad networks, the convenience-store industry remains relatively underserved in this regard, with only a handful of players having entered the field, such as GoPuff, 7-Eleven and Casey's.
As someone deeply passionate about the opportunity offered by retail media networks in the convenience store industry, I had the privilege of building and launching one of the first programs in this space last year. The unique characteristics of convenience stores, such as their high density in local markets, frequent purchase patterns among loyalty customers (three to seven times a week), and the abundance of first-party data through loyalty programs and enhanced digital platforms make them particularly well-suited to capitalize on retail media networks. The combination of high purchase frequency and the tendency for impulse purchases creates a short time window between ad exposure and purchase, allowing for greater ad effectiveness compared to other retail segments.
I strongly encourage convenience-store retailers of all sizes and geographical locations to carefully consider the potential of retail media networks for their business. To fully realize the benefits of this opportunity, retailers should prioritize their customer first-party data, focus on building digital experiences that generate ad inventory, modernize their technology stack and develop robust measurement capabilities. Additionally, retailers will need to make a strategic decision on whether to build their own retail media network or join an existing aggregation model to increase scale and accelerate time-to-market.
Digitizing the Store and Employee Experience
Over the past five years, the convenience-store industry has made significant strides in adopting digital technologies to enhance the customer experience. Initiatives such as loyalty programs and online ordering capabilities, including delivery and curbside pickup, have reshaped the industry, and propelled it beyond the traditional stigma of being solely associated with "Cokes and smokes." However, there remains ample opportunity to digitize and optimize the store and employee experiences.
While online ordering has seen considerable growth, the brick-and-mortar store still represents the primary mode of business for convenience stores. Thus, it is essential to invest in upgrading and modernizing store infrastructure. This includes initiatives such as upgrading point-of-sale systems, implementing self-checkout options, integrating digital menu boards and leveraging equipment IoT (Internet of Things) technology. These advancements streamline the shopping experience, optimize operations, and ultimately empower retailers to better serve their customers.
In addition to the customer experience, equal attention should be paid to enhancing the employee experience. Given that labor is often the largest budget item in retail, it is crucial to create an employee experience that is seamlessly integrated with technology. From the recruitment and onboarding process to ongoing training and development, convenience-store retailers can replace outdated practices with purpose-built technology and applications. By doing so, retailers can streamline and simplify tasks, empower employees and ultimately improve workforce retention and customer service quality.
Art Sebastian is the founder and managing partner retail-technology consulting firm at Nexchapter LLC and former vice president of digital experiences for Casey’s General Stores.
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