At CSP’s Outlook Leadership conference, attendees heard the latest takes on self-checkout, loyalty programs, retail media networks and more.
The three-day event runs from Tuesday to Thursday in Rancho Palos Verdes, California.
Here are five highlights from the first day…
Spicy Takes: Self-Checkout, Hot or Not?
Is self-checkout and pay at the pump hot, or not?
This is the question Jeffry Harrison, co-founder and president of Rovertown, asked panelists Amir Hassan, president of retail operations at H&S Power Market; Patrick Raycroft, co-founder and CEO at Axonet; and Lorraine Spadaro, chief information officer at Global Partners LP.
For Hassan, whose Orange, California-based company has 165 c-stores, self-checkout is not hot.
“When 30-40% of sales are tobacco or adult beverage, what is it going to benefit you?” he said.
- H&S Energy Products LLC is No. 50 on CSP’s 2024 Top 202 ranking of U.S. convenience-store chains by store count. Global Partners LP/Alltown Fresh is No. 21.
For Spadaro, who is the CIO for 405 stores, including the Alltown Fresh brand, said if the self-checkout machines can be integrated into the store design in the right location, then it can work.
“But it has to be designed, you just can’t plot it [in the store],” she said.
Raycroft was also not for them. His reasoning: Top performing convenience retailers have powerful associates, from a consumer engagement standpoint.
Future Retail Dynamics
From a foodservice perspective, middle-tier restaurant offerings are going away, said Arjun Chakravarti, managing partner at Cogknition. Formats that are hyper focused on value and high premiumization are trending. however. For those who want to capture the middle-class and upper-middle-class dollar, there is a change in behavior, where retailers are mixing the two formats together, he said.
Going this route means that a c-store retailer will need more sophistication in analytics and performance marketing to succeed, brand marketing around building trust and potentially, a retail media network.
“The reason [retail media networks] are such a big deal is that you are now able to invest in building toward having a 70% margin business attached to your traditional business that creates a capital environment potentially to invest in things that make you more competitive with traditional food offerings.”
Talking Trends
Loyalty programs can strategically help retailers offset the challenges of what’s happening in convenience-store profits today, according to Upside. While c-store revenue is up, unit sales are down because prices have increased, said Tom Weinandy, research economist at the technology company.
Ninety percent of shoppers said that loyalty programs are worth the effort. Cater to different customer segments, Weinandy said. There are the dedicated users that a c-store has already won, uncommitted customers that shop around and disengaged consumers that don’t typically shop at c-stores. Personalization, more so than dynamic pricing, can help retailers meet each type of customer where they are and provide them with the value that they want to see in convenience, he said.
Think of How People Feel With Your Product
All brands ask the question, How do we want people to feel about ourselves? The most successful ones, however, ask a different question: How do we want people to feel about themselves when they engage with our brand, our products and services?
These words came from Greg Hoffman, speaking on Emotion by Design: Creative Leadership Lessons from a Life at Nike, at Outlook.
Hoffman, Beaverton, Oregon-based Nike’s former chief marketing officer and the author of “Emotion by Design,” said that to be their best, companies must take risks, never playing it safe and playing to win.
“Guess who loses out when we don’t take risks?” he asked. “How can you expect to take your customers someplace new if you won’t go there first?”
He added that companies must let spontaneity reveal opportunity.
“Are you leaving space for improvisation?” Hoffman asked. “Do you have an organization and culture that allows improvisation?”
Innovation happens “in the intersection where the magic happens, not just in area of expertise,” he added. “When you mix expertise with mixed-life experiences, you open your aperture to the world and can see farther and deeper.”
Connecting Brands With Consumers
Retail media networks are growing.
In 2024, they will represent 20% of all digital ad spending, a 21% year-over-year increase, and will represent $129 billion by 2028, said loyalty expert Todd Gulbransen, senior vice president and general manager, consumer programs and marketing, at PDI Technologies, Alpharetta, Georgia.
“How do we partake?” he asked. “How do we put this into motion and make money?”
Retail media networks, Gulbransen said, leverage first-party data to drive optimized marketing spend for brands, have the ability to target and measure onsite and offsite, and are privacy compliant.
Amazon’s retail media business has grown to $45 billion annually, he added.
Retailers need to find a way to leverage one of their most valuable assets: first party data
“Brands need to leverage first-party data through those that derive it in order to maximize return on investment,” he said. “Identify, organize and make your data actionable for the environment we are in.”
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