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The convenience store industry is undergoing massive changes and faces the potential loss of huge profits as the country moves away from fossil fuel powered vehicles. Many stores and chain stores are investing in mobile technology to reduce financial damage by increasing sales to existing customers.
Fuel sales represent a significant slice of the revenue pie for many convenience stores. But rather than being a revenue stream that is expected to grow, time is ticking when fossil fuels cease to power the majority of vehicles in this country. Several individual states have announced target dates, as has the federal government.
This forces many convenience stores to increase revenue elsewhere. Since they have little new to offer new customers, loyalty programs and customer engagement practices get the most attention. Strong mobile strategies are now a must and cover everything from marketing and social media to loyalty programs, ordering and payments.
VentureBeat spoke with Daniel Kahan, chief loyalty officer at W. Capra Consulting Group, about the investments in mobile technology that convenience stores are making and how they will improve the customer experience. W. Capra Consulting Group is a leader in the retail technology industry, providing IT and business catering consulting services.
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VentureBeat: What do you think are the features and capabilities that consumers expect from a mobile technology program in convenience stores?
Daniel Kahan: Payment and loyalty have become barriers to entry. Beyond that, flexibility should be at the core of any mobile program. A retailer can offer whatever fancy features they want — connected car, order ahead. But if they don’t allow the consumer to choose how and when they want to receive notifications and offers, how they want to pay, etc., then the consumer won’t take advantage of that channel.
VB: How would you describe the ideal use of mobile technology for marketing by convenience stores?
Khan: Our industry leaders are leveraging mobile technology for 1:1 marketing. They understand mobile not as a marketing channel but as a data collection channel that offers marketing opportunities.
This comes with the inherent understanding that the consumer’s screen is valuable real estate and should not be spammed. Once a retailer has built a deep enough trust to meaningfully engage a consumer through mobile channels, the opportunities to collect data enable idealized 1:1 marketing campaigns.
VB: What is the ideal use of mobile technology for social media by convenience stores?
Khan: In our view, the role of social media in a mobile program will vary by brand. Social media can often be something that companies get into because they see their competitors doing it. But the reality is that it often doesn’t translate into measurable impact unless the company invests the time to get it right. If social media doesn’t play a role in a brand strategy today, trying to integrate social media into a mobile strategy likely won’t translate into meaningful or measurable conversions.
VB: What is the best role for mobile technology in customer loyalty programs?
Khan: The state of the industry is such that mobile technology and engagement technology have merged. Although initial implementation hurdles have challenged retailers, there is an eventual symbiosis in this merger that has pushed the industry forward.
From a consumer perspective, their expectations have evolved to allow receiving, tracking and managing rewards and offers in one easy-to-manage location.
From a marketer’s perspective, engagement serves as the mechanism through which mobile maximizes data collection, allowing retailers to collect, validate and enrich their data sets to drive reliable insights that will deliver an improved consumer experience .
VB: Could you please describe the ideal use of mobile technology for convenience store ordering and inventory management?
Khan: When conducting mobile strategies, many often think of mobile as a consumer-facing channel. It has become a common understanding that integration through the vendor stack will improve the consumer experience and reduce friction. However, back office and OMS vendors are often excluded from these integrations.
Enterprise customers as a whole are often overlooked as a potential audience in mobile strategies. The leaders among us understand that mobile, at its best, facilitates connection, enhancing not only B2C relationships, but B2B as well.
VB: How is mobile technology commonly used for customer payments by convenience stores?
Khan: With mobile payments, there are two key principles – flexibility and security. Mobile can give consumers a way to pay with whatever method they want to pay, eliminating as much friction as possible. It can also introduce best-in-class security measures that ensure consumer credentials remain protected, never seen in plain sight by the merchant.
The mobile programs also enable easy integration into merchant fraud management programs, allowing merchants to implement optimized algorithms that reduce fraud and limit false positives in their environment.
VB: What do you think separates the leaders from the laggards in the convenience store industry when it comes to the use of mobile technology?
Khan: While not yet a monumental hurdle, in the coming years we expect system architecture models to become make or break. As digital capabilities (ie, frictionless, scan to pay, etc.) that may seem conceptual today become more commonplace experiences, retailers will require ways to experiment and adapt at a rapid pace.
Architectures or vendors that require a merchant to spend several months implementing a program or feature will effectively block that merchant from competing for years to come.
Finally, whether a retailer is implementing or improving a mobile program, or looking to modify their technology stack or brand strategy, it’s important to remember that targeting should be fit for purpose, tailored to the specific brand.
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