A record crowd showed up the the NACS State of the Industry(SOI) event earlier this month in Chicago. This year the presenters touched on several topics that are shaping and challenging the industry. According to our observations these are the critical areas that are keeping C-Store executives up at night.
- Utilizing data for better decision making
- Food service expansion
- Branding in a consumer-centric way
- Motivating and retaining employees in a challenging labor market
I would like to focus on the first area and share some thoughts on managing and utilizing data for more informed and confident business decisions.
In all aspects of business today, leaders realize that having access to data, being able to effectively analyze data and then using these learnings to predict the future will make better informed business decisions. This is especially so in the convenience store industry where there is so much data available that can determine consumer behavior. Data can be used to answer questions like- Who are my customers? What customer segments should I market to? is my loyalty program effective? What is the customer market basket and can I grow it? Am I pricing effectively on an everyday basis, are my promotions effective and am I discounting more than I need to in driving sales?
I believe that it is critical for convenience store retailers to analyze everything that they can about their customers. Consumer behavior is changing right before us. Online purchases continue to grow (including snacks and beverages usually purchased at convenience stores), home delivery and/or order and pick up purchases are becoming more commonplace and people are driving less (especially young adults) due to the “uber effect”. Combine these changed behaviors with improved gas mileage on cars and alternative fuels growth the industry is seeing declining customer traffic and lower gallon sales. So understanding your customers is essential to A) Know how to keep them loyal to you, B) Sell more to them by increasing the basket size, and C) Increase the gross profits derived from loyal customers.
In order to do A), B) and C) you need a focused data analytics process. This process starts at the top with a commitment from the CEO that decisions will be made utilizing good data and executed with the right technology solutions. This requires an investment in both people (skill sets with data analytics) and technology resources. The Return on Investment is assurance of a viable and sustainable business model going forward amidst change and challenges.
The C-Store business always starts with Location! Location! Location!, to ensure success. But today we must add Data! Data! Data!, to know what success is and how to maintain. Best wishes on your Data Journey!