From major M&A deals to an increased focus on in-store foodservice and beverages, as well as the ongoing evolution of convenience stores from pit stops to destination spots, convenience retail is evolving – and operators must continuously innovate to keep pace.
The broad reach of the digital revolution now includes the ubiquitous grocery circular. In the first half of 2016, the number of digital coupons available grew by 23.4 percent, while the number of mobile coupon users in the U.S. rose by almost 18 percent. While traditional print circulars are not likely to disappear completely, many grocery chains are now developing circulars specifically for digital and mobile platforms. Wegmans, for example, introduced a mobile app, allowing customers to clip virtual coupons, while Safeway offers a weekly online circular.
The average time between a consumer’s vehicle purchases continues to grow. Reports indicate that people expect to own the same car for six, seven, or even eight years – a notable shift from the typical past purchase cycle of every three to four years.
This shift is just one reason why automakers must think critically about customer retention strategies and how their new revenue streams can grow customer relationships. As leading OEMs increasingly invest in mobility programs like car-sharing services, these initiatives serve the dual purpose of providing an additional revenue stream and an added touchpoint with consumers between vehicle purchases. These benefits align with an evolving goal in the auto industry: Nurturing the customer relationship throughout the sales cycle, including between purchases.
The market for financial products is more crowded than ever. How can financial institutions not only capture new customers, but acquire the right ones, and create enduring relationships?
During the 2008 recession, 6,200 brick-and-mortar stores closed. In 2017, total store closures are expected to surpass that number, climbing to over 8,600.
Retailers are undeniably facing headwinds, from the growth of e-commerce and online competitors, the decline of the shopping mall, and shifting consumer preferences, among other factors. Yet, while the process of browsing and shopping increasingly shifts to online and mobile channels, consumers still make the majority of purchases in brick-and-mortar stores. Many retailers are already re-evaluating and consolidating their physical store networks in response to these challenges. But how can they drive maximum traffic to their remaining physical stores, and minimize losses from closures?
Proactively combating account fraud is currently top of mind across the financial services industry. In addition to changing sales incentives and investing in employee education, banks are increasingly investing in advanced analytics to root out instances of fraud.
As application volume has increased substantially in recent years, one leading U.S. issuer noticed that the number of non-authorized accounts was growing proportionally. Recognizing an opportunity to strengthen its fraud detection process, the issuer used APT’s Test & Learn® software to build propensity models that determine a new account’s likelihood of being fraudulent.
On “The Price is Right,” sometimes all it takes to win big is a little guesswork – but in business, developing a winning pricing strategy is quite complex. For years, organizations ranging from airlines to hotels and restaurants have leveraged variable pricing strategies, adjusting prices based on historic demand during the given day of the week or time of day. For restaurants in particular, this approach is key to effectively driving traffic during off-peak hours. Since an empty table is lost revenue, a menu item that sells for fifteen dollars on Friday evenings could be profitably sold for much less on Wednesdays, for example.
Traditionally, variable pricing strategies for restaurants have included initiatives like happy hours and “Kids Eat Free” programs on slower days of the week. However, as an increasing number of restaurant chains opt for digital menu boards or tablet-based menus, the variable pricing opportunity is evolving. Research from Applied Predictive Technologies’ 2017 State of Business Experimentation Report shows that 65 percent of restaurants surveyed experimented with pricing in the past year, and 10 percent of respondents tested variable pricing-specific strategies.
The increased popularity of digital restaurant technology is enabling more cost-efficient and easy-to-implement variable pricing, allowing restaurants to move beyond shifting price just by day and time to implement real-time pricing shifts based on other factors like weather. But how can restaurant decision-makers ensure that these variable pricing programs are profit-positive?
The robots are coming! According to a recent report from Accenture, 75 percent of insurance executives surveyed believe artificial intelligence (AI) will transform or bring significant change to the industry over the next three years. While insurers are already using some elements of AI, new teams and departments within these organizations are also starting to leverage the technology. As insurers strive to remain on the cutting edge and continue to evolve their use of AI, it is critical that they fully understand how it impacts existing processes before investing in widespread implementation.
Convenience retailers are increasingly challenging the notion that customers should only visit their stores to fuel up and grab snacks, especially in light of the rise of car-sharing and hyper-efficient cars. Some, like Kum & Go, are adding features like growler stations. Others are investing in services to drive customers into the store, like Amazon Lockers and USPS goposts, which have been popping up in numerous QuikTrip and 7-Eleven locations. These innovations are no longer just nice to have. They are becoming necessities for profitable brick-and-mortar retailing.
Some convenience stores are also emulating restaurants to draw traffic, adding outdoor seating areas, free Wi-Fi, or drive-thru windows. For example, Duchess designed a prototype store concept with a greater focus on foodservice, including made-to-order menu offerings, an in-store dining area, and touch screen ordering options. Similar to kiosk ordering, some convenience retailers are also adding at-the-pump food order screens.
Taking on these types of capital-intensive projects presents both great opportunity and great risk for executives. If managed correctly, they can drive significant profit growth. However, some of these programs may not pay off. With each new initiative comes questions regarding their implications. For example, which categories should retailers downsize to create space for self-service lockers? Will introducing a made-to-order foodservice concept drive enough incremental transactions and add-on purchases to cover the associated costs? And which locations will respond best to at-the-pump ordering screens?
The best way to answer these questions is to first pilot each concept in a subset of representative locations, then closely monitor their performance. This approach allows convenience retailers to ascertain whether the initiative warrants further investment, based on incremental traffic and sales. Overall, there are three key questions executives must answer before making decisions on broader rollout.
When asked about future strategies, APT research shows that financial services institutions (FSIs) consistently report a focus on enhancing omnichannel offerings to meet the needs of a rapidly evolving customer base. Specifically, 60 percent of banks surveyed highlighted channel migration as a strategic priority, and 100 percent of those respondents said they are focused on improving digital onboarding processes to accelerate this channel migration.
Based on those findings, it is clear that banks aspire to create a seamless experience across channels and reduce reliance on the branch for transactions. This is a win-win shift for FSIs and customers alike. For banks, there are significant cost savings, and customers gain a more convenient and seamless banking experience. Further, research from Bain indicates that omnichannel customers are more loyal to their primary bank than those that only bank in one channel.