To compete effectively in the new normal, c-stores and CPGs must make data and insights the foundation of their strategy.

The retail landscape is undergoing a dramatic transformation.

According to the 2020 NACS/Nielsen Convenience Industry Store Count, the number of convenience stores declined slightly over the last year. The data, which is based on numbers as of the end of 2019, puts the current number of U.S. convenience stores at 152,720, down less than 1 percent from the previous year’s 153,237 stores.

In addition, the COVID-19 pandemic has proven to be “good for business” for many of the c-store industry’s encroaching competitors. At the end of the second quarter in 2020, Amazon reported $55.44 billion in North American sales, which was a year-over-year increase of 43.4 percent. At $22.67 billion, the company’s international sales also grew considerably over the previous year.

Dollar stores are faring well, too. In the case of Dollar General, the company performed better than many of the essential businesses that remained open during weeks of shelter-in-place restrictions. Dollar General increased its Q1 top-line sales by 27.6 percent for a total of $8.4 billion.

The fight for consumers was already ramping up in recent years, and the pandemic only intensified the need for new and improved tools. If c-stores expect to compete effectively and win in the new normal, data and insights must be the foundation of their strategy. The typical tools of the past are simply not going to be as effective in this ongoing battle against Amazon and new, non-conventional brick-and-mortar formats. For convenience, fresh food offerings as well as safe in-store experiences are becoming a core differentiator as the center store moves online.

A primary problem is that while consumer packaged goods (CPG) brands have granular real-time insights into grocery, mass, drug and other retailers, they lack the same quality, scale and unique basket-level detail for the convenience industry. This is particularly true as it pertains to independent operators. This limits growth and hinders the ability to deliver relevant, localized shopping experiences. Here are a few reasons why a change is necessary:

  1. Improves measurement and localization: Due to a potential lack of data granularity, many companies may be unable to develop and execute localized and/or personalized growth strategies. Brands cannot measure displays, media, and other activities if they are limited to weekly sales and volume figures at the lowest level that is delivered to them (8-30 days post purchase). Full store basket-level data allows for complete store coverage and basket-level analysis like cross purchase correlations, basket size, seasonality, and dayparts to know when to run and optimize promotional offers.
  2. Enables better foodservice performance: Much like fuel volumes, foodservice took a hit this year as a result of shelter-in-place restrictions and an overall decline in consumer travel and trips to stores as a result of the pandemic. Despite this temporary setback, foodservice, as well as the grocery perimeter, remains one of the most profitable and important categories for retailers. Basket-level transaction data analyzes non UPC items like foodservice, enabling retailers and CPGs to gain the insights they need to finetune their programs and provide better customer service.
  3. Enhances collaboration through system integration: Collaboration between retailers and suppliers is key to executing a successful retail strategy. Data that is built on closed systems limits the retailer and vendor collaboration, speed, and agility. A lack of powerful APIs hinders the ability to embed granular retail data into machine learning forecasts and other third-party systems. Sharing data and key insights with each other not only corrects and prevents problems on the shelf, but it can also lead to increased sales lift as a result of more effective promotions.
  4. Delivers speed to insights: Processing basket-level data on-demand as well as the ability to handle real-time data is critical to helping retailers make up-to-the-minute informed decisions. This becomes even important during unprecedented times when consumer behavior and sentiment is changing on a regular basis. On-time insights into what consumers need can deliver competitive edge retailers need year-round.

To compete in this new world, it’s more important than ever that retailers and CPGs adopt a data-first, analytics-centric approach across the board, from supply chain, to store, to online. If they do, they’ll be able to provide a seamless, convenient, and compelling shopping experience.

You can thrive in today’s digital economy. Contact us today to learn how we can help you transform your business.