The NACS Insight Convenience Summit – Europe took place last week in Berlin and London, bringing together convenience and fuel retailing industry professionals from around the world to discuss new ideas and gain new commercial connections through general sessions and hands-on Retail Study Tours.
By Fiona Briggs
LONDON – Digital commerce and its impact on convenience retailing was dissected by presenters and attendees at last week’s NACS Insight Convenience Summit – Europe.
Summit attendees took a virtual tour of retailers who are innovating with technology, courtesy of Craig Smith from REPL Digital and Cumberland Gulf Group CIO Dave Banks, who shared how the company is breaking new ground with its mobile payments system. Jim Okamura, managing director for Okamura Consulting, later went on to explore the omnichannel opportunities for convenience stores. (For more on omnichannel retailing, read “The Omni-Retailer” in the May issue of NACS Magazine.)
Smith, who joined REPL following a stint at Marks & Spencer developing the retailer’s digital stores, said REPL’s aim is to “make store staff more productive,” and he presented a series of videos showcasing the latest in-store technologies to help achieve this goal. The technologies included shopper tracking at Telefonic, as well as an innovative geo-location tool deployed by the South American retailer, Meat Pack. The tool targeted shoppers when they were in competitors’ stores and offered them a discount, which was based on a timer mechanism, counting down every second as shoppers raced to the nearby Meat Pack store.
According to Smith, one customer received a record-breaking 87% discount. “Now that’s real disruption,” he said. Smith also showcased facial recognition technology plus scanning for payments at forecourts, sports stadiums and in-stores such as Wal-Mart’s Scan & Go self-scan service. According to Smith, the technology is still in its infancy but is primed for growth.
Payment by mobile devices such as watches and phones was also highlighted, alongside using a store’s POS to capture customer feedback. “Mobile is at heart of digital innovation, and payment and personalization will cause the most disruption,” Smith predicted.
In his presentation, Banks shared Cumberland Farms’ mobile pay at pump technology, first launched in 2012. As he explained, the pumps were activated from a phone, with the price rolling back five cents per gallon and the sale amount deducted from the customer’s PayPal account. But while PayPal customers loved it, it did not achieve the mass adoption the company was hoping for, said Banks. Cumberland redesigned the technology to accept ACH transactions and relaunched it at all stores in conjunction with a TV and media campaign. This time the technology attracted 100,000 customers in the first 45 days.
According to Banks, there are now half a million customers participating in the program and it is now bigger than Visa and MasterCard in their payment mix. Cumberland Farms has since added a loyalty component to the scheme, offering free cups of coffee with fuel purchases, for example. In the summer of 2014, the company also created fleet management functionality for small business customers.
Ease of use has been central to the technology’s development at Cumberland Farms: “Simplicity was a driver for us,” said Banks. At the pump, customers enter their password and pump number. The technology checks that the customer’s transaction history is in good standing and that the pump is available. It then activates the pump and provides rolling ads during the fill. Digital receipts show both visit and lifetime savings through the program. Once enrolled, customers are extremely loyal, explained Banks, revealing that the retailer has pumped more than 1 billion liters of gas through its program.
As well as winning new and repeat customers, 95% of customers are reported to be extremely comfortable with the security of mobile payment. “We have grabbed a lot of market share,” said Banks. The technology is also a great vehicle for communicating with the customer through targeted promotions and important program updates. From a security point of view, it’s a highly secure transaction, with no risk of losing card data through skimming, for example.
Okamura’s presentation highlighted the global opportunity in e-commerce while stressing that digital retail is still in its infancy. According to Okamura, leading retailers are spending their money on mobile and omnichannel technology, citing Walmart as an example of a company he is “very impressed with,” despite being a late comer to digital. He then charted Walmart’s omnichannel merchandising strategy, which has developed from offering separate assortments to endless aisle capabilities. The mega-retailer is also investing in mobile apps such as the Walmart savings catcher, allowing customers to scan their receipt for the retailer to compares its prices with competitors and refund the difference.
“Tools like this are showing up in-store and helping sales associates and managers do their job more efficiently,” said Okamura. He also reminded attendees how quickly markets can change, such as the development of drive formats in France and the trend to mobile POS. “Smart retailers are also thinking about how to drive the front-end sale and serve the customer after the sale happens,” he said, emphasizing the importance of inventory visibility for all retailers.
He cited click-and-collect as a game-changer, enabling shoppers to save time in their busy lives, and reported that in some cases revenue of ship to stores has surpassed stores’ traditional revenue. Mobile is also another key convenience opportunity and is being used for an increasing number of transactions. For instance, 40% of national pizza chain orders in the United States are now placed via mobile device, while the newly-launched Uber Eats service intends to capitalize on its driver base to offer food delivery services. Okamura urged attendees to consider how such services can change supply chains and business models across channels.