Mobile technology rides in to save convenience stores

The convenience store industry is undergoing tremendous change, and is faced with the potential loss of enormous profits as the country moves away from fossil fuel–powered vehicles. Many stores and store chains are banking on mobile technology investments to lessen the financial damage by increasing sales to existing customers.

Fuel sales represent a significant slice of the revenue pie for many convenience stores. But instead of that being a revenue stream that is expected to grow, the clock is ticking on when fossil fuel ceases to power the majority of vehicles in this country. Several individual states hare announced target dates, as has the federal government.

That is forcing many convenience stores to boost revenue elsewhere. Since they have little new to offer new customers, loyalty programs and customer engagement practices are getting the most attention. Robust mobile strategies are now a must-have, and cover everything from marketing and social media to loyalty programs, ordering and payment.

VentureBeat spoke with Daniel Kahan, loyalty lead at W. Capra Consulting Group, about investments in mobile technology that convenience stores are making, and how they will improve the customer experience. W. Capra Consulting Group is an industry leader in retail technology, providing IT and business-focused advisory services.

VentureBeat: What do you believe are the features and capabilities that consumers expect from a mobile tech program at convenience stores?

Daniel Kahan: Payment and loyalty have become barriers to entry. Beyond that, flexibility must be the core of any mobile program. A retailer can offer any fancy features that they want — connected car, order ahead. But if they do not allow the consumer to select how and when they wish to receive notifications and offers, how they wish to pay, etc., then the consumer will not leverage that channel.

VB: How would you describe the ideal use of mobile tech for marketing by convenience stores?

Kahan: The leaders in our industry 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 precious real estate, not to be spammed. Once a retailer has established a deep enough trust to meaningfully engage a consumer via mobile channels, the opportunities for data collection allow for idealized 1:1 marketing campaigns.

VB: What is the ideal use of mobile technology for social media by convenience stores?

Kahan: In our view, the role of social media in a mobile program will vary by brand. Social media can often be something that companies participate in because they see their competitors doing so. But the reality is that it often doesn’t translate to a measurable impact unless the company invests the time to do it right. If social media doesn’t play part in a brand strategy today, attempting to wedge social media into a mobile strategy likely won’t translate into meaningful or measurable conversions.

VB: What role can mobile technology best play in customer loyalty programs?

Kahan: The state of the industry is such that mobile and loyalty technology have merged. Though the initial hurdles of implementation have challenged retailers, there’s an ultimate symbiosis to this merging that has propelled the industry forward.

From a consumer perspective, their expectations have evolved to allow for the receipt, tracking and management of rewards and offers in an easy-to-manage location.

From a merchant perspective, loyalty serves as the mechanism through which mobile maximizes data collection, allowing retailers to collect, validate and enrich their datasets to drive actionable insights that will inform an enhanced consumer experience.

VB: Would you please describe the ideal use of mobile tech for ordering and inventory management by convenience stores?

Kahan: When conducting mobile strategies, many often think of mobile as a consumer-facing channel. The common understanding has become that integration through the vendor stack will enhance the consumer experience and reduce friction. However, back office and OMS vendors are often excluded from these integrations.

Corporate customers as a whole are often ignored as a potential audience in mobile strategies. The leaders among us understand that mobile, at its best, facilitates connection, empowering not only B2C, but B2B relationships.

VB: How is mobile technology typically being used for customer payments by convenience stores?

Kahan: With mobile payments, it comes down to two essential tenets — flexibility and security. Mobile can offer consumers a way to pay with whatever method they wish to pay with, eliminating as much friction as possible. It can also introduce best-in-class security measures that ensure consumer credentials remain protected, that the merchant never sees them in the clear.

Mobile programs also allow for facile integration into fraud management vendor programs, enabling merchants to implement optimized algorithms that reduce fraud and limit false positives in their environment.

VB: What do you believe separates leaders from laggards in the convenience store industry when it comes to using mobile technology?

Kahan: While not yet a monumental barrier, in the coming years we anticipate system architectural models will become make-or-break. As digital capabilities (i.e., frictionless, scan-to-pay, etc.) that can seem conceptual today become more commonplace experiences, retailers will require ways to experiment and adapt at rapid paces.

Architectures or vendors that require a merchant to spend several months implementing a program or feature will effectively bar that merchant from competition in the years to come.

Finally, whether a retailer is implementing or enhancing a mobile program, or whether they are looking to amend their technology stack or brand strategy, it’s essential to remember the objective must be fit-for-purpose, customized to that brand.

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