“Customer experience” has become an industry buzz phrase over the past year — and it has led many leading convenience store chains to enhance, and sometimes even reinvent, the experience their customers have when shopping their stores.
Data shows a move to improve is a smart one. According to an October 2020 study from Salesforce entitled the “State of the Connected Customer,” 66 percent of customers expect companies to understand their needs and expectations. “Understanding customers’ needs — and exceeding their expectations — are becoming table stakes for businesses to compete,” the study stated.
Other recent studies have found that customer-centric companies are more profitable compared to companies that are not focused on the customer, and companies with a customer-focused CEO at the helm are more profitable than their counterparts.
“Customer experience is everything,” said Bonnie Woods, convenience store loyalty strategist at Newton, Mass.-based Paytronix Systems Inc., a provider of software-as-a-service customer experience management solutions for convenience stores and restaurants.
“From interactions with associates and checkout speed, to online ordering, curbside pickup, skip the line and mobile pay at the pump, modern consumers expect each experience to be hassle-free and consistent,” she continued. “As c-stores expand into QSR [quick-service restaurant] and coffee-shop territory, they have the opportunity to serve their diverse customer set by creating a cohesive customer-centric experience that focuses on quality, convenience and lifestyle more than ever before.”
Retailers are eager for a return to normal when it comes to customer counts, noted Denise Jenkins, vice president of marketing, insights and loyalty at Cincinnati-based United Dairy Farmers (UDF), which operates nearly 200 convenience stores in three states.
“Customer satisfaction research has solidly proven that basic attention to guest interactions increases OSAT [overall satisfaction] scores and the guests’ likelihood of returning to your store,” she said. “Over time, this creates loyalty and a brand advantage over the competition.”
What’s Fueling the Focus?
Myriad factors are driving the need for more customer-centric experiences in the post-COVID marketplace, according to Cameron Watt, CEO of Intouch Insight, a leader in mystery shopping.
“The first is increased competition between c-stores and other types of retailers. Years ago, convenience and fuel retailers were mostly competing among other similar brands for patrons, primarily focused on location, price, and ensuring staple packaged goods were in-stock,” Watt explained. “Now, c-stores have become so much more than a pit stop and are actively competing with other industries like quick-service restaurants for prepared foods, coffee shops for morning joe, and even grocery stores for pantry items.”
As consumers’ options continue to expand, c-stores must enhance their customer experience to come out on top of the growing list of competitors, he added
Jenkins, too, believes an abundance of options is fueling a focus on the customer experience, especially where foodservice is concerned. “Consumers expect more from a customer experience when dealing with hot food than they would if they were just coming in for cigarettes or a beverage,” she said. “Our entire channel is changing to focus on food, and we want our guests to compare us more to QSR and fast-casual options.”
According to Watt, the fact that the pandemic caused alternative last-mile services to go from the boardroom to the street almost overnight is another factor. “At the height of COVID-19, consumers needed to feel safe while shopping, so having access to a variety of methods to buy and pick up merchandise became paramount,” he said. “Even as we exit the pandemic, alternatives like delivery and curbside pickup remain, and are picking up speed. When your brand promise is being delivered in so many ways, understanding your customer journey in each of them becomes a new and daunting task for many.”
Add rising inflation in-store and at the pump, supply chain disruptions and inventory inconsistency, and the need to improve the customer experience becomes clear.
“C-store brands need to be proactively innovating around and alleviating challenges to keep shoppers coming back,” Watt said. “In short, in a world with unlimited options and an ever-changing landscape, customer experience is not just a buzz phrase, but it is often the primary differentiator between brands. They can’t afford not to focus on it.”
Digital Interactions Increase Loyalty
Focusing on the customer experience can take many forms. Adding opportunities to interact with customers via digital platforms is an increasingly important one, industry experts maintain.
“Digital guest interactions are becoming of more significance, with retailers relying on apps and loyalty programs to serve as major marketing channels and [to provide the] opportunity to meet guests where they are,” said UDF’s Jenkins
She also notes that shoppers look for a product or type of retailer via apps or the internet before they make a trip or purchase decision. “Their experiences in this pre-shop step will also determine their experience at the brand level and can be a differentiator,” she added.
Whatever digital experience a c-store creates, consistency across platforms is key.
“Because there are more ways in which customers can interact with a brand today, consistency is king,” stressed Woods of Paytronix. She suggests c-store operators consider these questions: Are the web and app experiences similar? Do my email communications match my social media voice? Am I balancing my digital investment with associate training and support?
“C-stores must be consistently aware of how customers are experiencing their forecourts, stores, apps, and purchases via third-party vendors to ensure they know where and how they’re stacking up against the competition,” Watt added. “Too often, brands focus on making a big splash or quickly rolling out a new offering, but fail to quantify how it may affect their customer experience across all offerings.”
For better or worse, Woods notes that the “digital age” brings with it an increased opportunity for customers to interact with brands. “It opens the door to both successes and blunders,” she cautioned. “For example, if a customer places an online order, but submits a review saying the wrong product was delivered, rectifying this by immediately offering the guest an apology and replacement or refund turns what would be a negative interaction into a positive one.
Improving Interactions to Succeed
Enhancing the customer experience might sound like an overwhelming task, especially considering everything else that is on a c-store operator’s plate. But as Woods points out, creating a positive customer experience doesn’t have to be complex.
“Start with the basics in-store: clear, consistent and deliberate communication from both signage and associates. Then, make it simple and appealing for the guest to join your loyalty program: QR codes for app download, text-to-join, simplified loyalty registration forms,” she suggested. The next step, she says, is knowing where each guest is in their customer journey and tailoring communications to meet their individual needs.
Woods and Watt offer the following tips on how to create a customer-centric experience:
Create or enhance a loyalty program
A recent Intouch Insight survey revealed that 94 percent of consumers have some kind of loyalty program, but only just over half have one with a c-store. “The study also indicated that having a loyalty program was third behind location and price for selecting a store to visit, which means there is an opportunity here,” Watt said. “Once you have a loyalty program in place, it allows you to combine it with your customer surveys to drive ongoing two-way communication with your customers, which is a very powerful tool.”
Woods calls a strong loyalty program “the cornerstone on which the digital customer experience is built,” and explains that 1:1 AI-driven marketing allows c-stores to personalize communication in ways that are optimal for each guest.
“Not only is this beneficial for both the guest and the brand by improving relevancy, but many consumers also have come to expect it,” she says. “Just like any relationship, it’s the little things that matter. This can be a thoughtful birthday treat in the customer’s best category, a message delivered on their best day of the week, or a badge showcasing their achievement of a particular milestone.”
Talk to your customers
“Chances are your customers have a lot to say. Whether it’s thoughts on an LTO [limited-time] offering or general satisfaction with the loyalty program or the launch of a new technology, you should be talking to your customers through surveys and other digital channels,” Woods urged. “Survey results should be actionable, so be deliberate with each question and tell the guest why their participation matters. … [Also,] let guests choose how they want to be communicated with and how they want to be rewarded.”
Brands need to proactively seek direct customer feedback to understand how individual locations are delivering against customer standards, Watt echoed.
“Typically, a simple web-based survey is utilized through which you can also incent your customers to provide their contact information for additional follow-up. Providing that you do not abuse the access and use the communication to motivate a response, the interactions can be not only positive, but also loyalty building,” he said. “Motivating someone to give their opinion can be as simple as being clear that their opinion will shape the future of the store. Motivation also can be more direct, such as providing loyalty points or an in-store discount.”
Understand your customers
Segment customers based on frequency, likelihood to lapse, category preference and spend.
Knowing what makes each guest unique can help a retailer tailor its communications, and offers the opportunity to thank customers for their loyalty and incent behavior change.
“RFM and k-means clustering are two common segmentation methods we frequently use at Paytronix,” Woods said. “But the power of segmentation really comes in when layering segments to create meaningful and actionable customer profiles.”
Test before implementing technology
Before rolling out any new technology, Woods suggests running through customer use cases extensively. “If you can, test in a limited market to smooth out any technology or operational issues to ensure stores are equipped to support the roll out,” she suggested. “Survey customers to understand what’s working and what’s not.”
Actively monitor execution against standards
Retailers should closely monitor how well their stores are executing against their standards, said Watt. “Only when you understand both sides of this equation are you equipped to both adjust your standards and to know where to focus your improvements from within your operations.”
By Charles Gray, Paytronix
From the early days of e-commerce to today’s rapid delivery services, consumers expect fast, personalized experiences. And it’s no longer just a small subset of customers. According to the Paytronix Order and Delivery Report 2022, digital sales make up a third of all food orders, so it’s clearly something that consumers want.
Beyond just opening up a key line of revenue, digital ordering enables convenience stores to attract and retain customers, and build customer lifetime value. The catch is that it’s not just about putting in a digital front end, it’s also about establishing the operational steps necessary to meet customer demands. This include optimizing customer journeys, addressing technological needs, working with third-party aggregators, and designing the core customer experience to maximize returns.
Before launching a digital ordering strategy, brands must think through every customer journey.
The average food and drink establishment receives orders on up to 2.7 channels at any given time, and then that order needs to flow into the store, be routed to either the kitchen or the center store, and then packaged. Once the order is packaged, there are multiple ways customers can have it delivered, including either in-store or curbside pickup. Or at-home delivery via third-party or first-party.
There are three key elements that any convenience store brand must consider: managing third-party ordering, establishing a first-party solution, and creating an operation that can manage it all.
Third-Party Digital Ordering
Third-party delivery aggregators are a great way to acquire customers and test digital ordering solutions. According to a NACS study, among c-stores that offer off-premises delivery, 50 percent use multiple aggregators to serve alternative locations.
A third-party partnership enables brands to expand their audience by providing exposure through curated shopping lists and SEO. For smaller brands especially, third-party apps are an equalizer because they often display brands based on location, rather than size or influence.
The drawback, however, can be a counter cluttered with tablets, each displaying information from a single marketplace. A better solution collects data from all those and displays it through the POS system. What’s more, that system should enable a store to have control over turning marketplace orders on or off during high-volume times.
Moving to First-Party Ordering
The only way for a brand to truly engage with their customers is to have a first-party ordering solution that offers a better experience than the third party. It needs to be easy to use, personalized, and enable guests to earn and redeem loyalty rewards.
Here is where convenience store brands can learn the lessons of restaurants. Many restaurant brands have taken control of the third-party relationship in multiple ways, including strong loyalty offerings and building menu items that are only available through their own app.
Even in cases with a strong first-party app, the third-party marketplaces play a key role. Not only do they offer access to new customers, but they also offer a ready fleet of delivery personnel waiting to be activated. By working with the third parties and utilizing their delivery teams, convenience stores can extend their reach without having to build from scratch.
Operations to Handle It All
Technology, however, is only part of the solution. Sure, a guest can order something online, but how does that item make it from the shelf into the customer’s hands? Convenience store brands must think through concepts like staffing, packaging, and even curbside locations before undertaking a digital strategy.
A brand that keeps a skeleton staff on overnight shifts may choose to turn off online ordering during that time, or it can increase staff to handle the shelf-picking and packaging necessary to fulfill orders. Even pumpside or curbside delivery must be carefully considered, as brands need to think through the process of how a customer notifies personnel once they’ve arrived.
Of course, at the heart of all of this is the customer experience, which means that some little personal actions go a long way. A last check on a bag to ensure all items are in it, or a well-packaged offering, go a long way in cementing the truly branded customer experience.
Charles Gray is chief revenue officer at Paytronix Systems Inc.