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The Future of Drive Thru: Overcoming Choke Points

September 15, 2017

Three things slowing down the drive-thru lane, and how quick serves can use technology to overcome them.

The 2016 QSR Drive-Thru Study revealed that a whopping 60–70 percent of the revenue in the quick-service business comes from drive-thru sales. According to The NPD Group, drive-thru sales account for 57 percent of business at burger restaurants, 40 percent at Mexican-themed, and 38 percent at restaurants that serve chicken. In 2016, McDonald’s said approximately 70 percent of its U.S. sales come from drive-thru windows.

Americans make 12.4 billion trips to the drive-thru every year, so meals on-the-go are here to stay.

The drive-thru flow process, in general, goes like this: a consumer arrives at the drive thru, orders their food, receives their order, pays, and drives away. By breaking down these activities into components, technology can be applied to increase speed and efficiency.

Technology can impact these areas in the drive-thru process:

  • Moving customers through the line
  • Food and product preparation speed
  • Accuracy in taking orders
  • Order entry to the restaurant’s kitchen
  • Payment

The key to increasing drive-thru sales is identifying the key choke-points that slow down the order process and finding solutions that alleviate these issues.

Choke-point No. 1: Traffic flow

This means fixing traffic in the entire restaurant environment, not just the parking lot. Imagine a world where once a customer opts-in, their vehicle can be pinpointed at any time, like the geo-tracking on a smartphone. Dual authentication can confirm customer identity and speed up traffic through the line. For example, let’s say Matt is driving Mary’s car. Matt’s phone will offer the secondary authentication, which is more specific and can provide geo or micro location. As soon as Matt pulls into the drive thru, the restaurant can determine Matt is the customer with a high degree of accuracy.

From that identification, a customer profile can be activated. Retailers can build the profile by reviewing prior orders from the customer and starting an algorithm for their menu production requirements. That data is compiled to generate menu analytics; with that analysis output is sent to the kitchen to automatically drop protein—a hamburger patty or chicken cutlet—onto the grill. If you speed up the line, you speed up the kitchen, in turn speeding up throughput, which increases sales.

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Why Convenient Packaging Matters

August 25, 2017

Many convenience store customers are dashboard diners. As mentioned in the May 2017 issue of NACS Magazine, the majority of those who purchase a sandwich or meal (56%) will eat it in the car. At night, nearly 3-in-4 (73%) plan to do the same.

This raises an important question: Do your stores offer car-friendly products and packaging?

Customers are looking for it. A recent survey of more than 3,500 GasBuddy users asked about the foodservice attributes that they look for when traveling. The number one response (63.3%) was “convenient/easy to hold.”

Driving with greasy fingers, struggling to find a place to set our food, setting down a pizza tray only to discover that grease has soaked through and left a mark on the car—it’s frustrating. Even worse: products that spill or slide about can become a dangerous distraction.

The good news is that some convenience stores and companies have already made car-friendly packaging a priority. When considering your options, here are four strategies that work:

1. Use the cup holder
Scrambled eggs are especially messy when they spill. Fortunately for QuikTrip’s customers, the breakfast bowls are sold in car-friendly snap-top containers that fit easily in cup holders. For those who grab and go on their morning commutes, this makes it easy to safely enjoy a few bites at each stoplight.

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American Optimism On the Upswing

August 14, 2017

Low gas prices help buoy customer sentiment.

Americans are feeling good about the economy thanks to a recent dip in gas prices, according to the latest NACS Consumer Fuels Survey.

The U.S. convenience store industry sells an estimated 80% of the fuel sold in the country, and NACS has conducted monthly surveys related to economic issues since January 2013.

Drivers report a median gas price of $2.22, down 13 cents from $2.35 in June. This month’s prices are the lowest gas prices reported by consumers this year.

As gas prices decline, consumers are feeling more optimistic about the state of the economy. Three in five (60%) American drivers report feeling optimistic about the economy, a two-point increase from last month and a point off the record high recorded in March. Last July, 47% of American drivers expressed optimism related to the economy.

Historically, most consumers say that prices will increase over the next 30 days; however, that perception is changing as gas prices remain low for a sustained period. Only 41% of drivers now say that they expect prices to climb this month, the lowest percentage in 12 months.

The decline in gas price has been felt most strongly in the South, where over half (55%) of consumers say they noticed lower gas prices this month. In contrast, just under a third (29%) of consumers in the West say they noticed this month’s dip in prices. Overall, 43% say they believe gas prices are lower than 30 days ago.

Nearly one in four consumers (24%) say that they will drive more this month and nearly one in five (18%) say they will spend more.

“The cumulative effect of low gas prices over the past three summers is certainly pushing consumer optimism higher,” said Jeff Lenard, NACS vice president of strategic industry initiatives. “Low gas prices, warm summer weather and high consumer optimism are the three factors most cited by convenience stores retailers looking to grow their sales and retailers are very optimistic about summer sales.”

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Three Ways to Share Your Healthful Products With Customers

July 17, 2017

Although I’m impressed by the large number of convenience stores that provide access to fresh, healthful products, there’s still a disconnect in communicating this to customers. Many stores offer little to no indication that they carry healthful products—unless customers physically walk inside.

Last summer, when I was near the Oklahoma City airport, I reluctantly stopped at a location from a major brand that had questionable curb appeal and an enormous promo about a deal on 32-ounce fountain drinks. But when I ventured inside, I also discovered salads, fruit, vegetables, mixed nuts, low-sugar snack bars and other similar products.

This made me wonder how many customers might have come inside if they knew these products were available? How many would have purchased food in addition to fuel?

Part of the issue in not promoting healthful options is that such marketing comes at the expense of tried-and-true traditional products. But that’s incorrect. It’s not about promoting one over the other, but rather telling customers that you have something for everyone.

The good news? This doesn’t have to be complicated. And it can begin with a few simple steps.

Step 1: Reach customers at the pump. You may already have promotions displayed at or near the pump, but do any of them show your healthful offerings?

At my local HyVee Gas, each pump’s hose has a small plastic frame attached to hold inserts for various promotions. Some of these show traditional products, but many show healthful products as well. It’s a great strategy, because even if a customer doesn’t want the salad and bottled water I saw on one promotion, they know other healthful products are likely sold inside.

Kum & Go does something similar. As I write this column, I’m using the outdoor seating at one of their new marketplace stores. Across the parking lot, a customer is pumping gas into his SUV and staring at a poster for one of their new salads.

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4 Tips to Manage Your Online Reputation

July 10, 2017

Retailers should think of people visiting their website or social-media pages the same way they think of customers stepping into their stores.

Customers Googling a store are online to shop for a brick-and-mortar shopping experience, previewing the store before they physically enter. They will inevitably see reviews of the store and these reviews are likely to affect their decisions.

Retailers have much to gain from favorable online ratings and much to lose with negative ratings. As such, it’s important to keep track of online reviews and to make an effort to keep reviews positive. Boston-based GasBuddy recently released a report with tips on how retailers can manage their online reputation.

Here are four points from the report to help retailers gain and retain good online reviews.

1. Tap the right talent

GasBuddy suggests retailers designate an employee to track, respond to and manage online customer reviews. Answering online reviews and addressing the problems they point out is important for a store’s image and performance, so it’s smart to designate a person or team to stay on top of online reviews.

The report suggests assigning this task to the team or employee responsible for answering the phone, email communications or the store’s social-media presence to maintain a consistent message. If stores don’t have the manpower to assign a person or team to this task, there are online services that will automatically respond to online feedback.

2. Take the plunge

It can be easy for retailers faced with a bad online review to ignore it. After all, nothing good will come from engaging an angry internet user, right? Wrong.

Retailers should publicly respond to every online review, good or bad, even if it’s responding to a complaint with something as simple as “thank you for your valuable feedback. Please direct message us with more details so we can prevent this from happening in the future.”

In a recent survey of its users, GasBuddy found that a personal response to a review would influence their decision to return, and 72% of consumers would consider revisiting a station or store if their complaints were resolved quickly. If a formerly disgruntled customer is satisfied with the response to their complaint, they could even be convinced to give the store a better online rating.

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How U.S. Convenience Stores Can Stay Ahead of the Retail Pack

June 23, 2017

Compared with adjacent retail channels, U.S. convenience stores have boasted relative strength and sales growth in recent years. Built on the premise of speed, convenience stores are modeled to deliver on specific consumer needs that competing channels don’t yet address fully. While Nielsen research suggests that the strength of convenience stores will continue, it’s not guaranteed, particularly as consumer shopping trips decline, competing channels diversify and e-commerce grows.

Today, convenience stores are highly relevant to consumers’ on-the-go lifestyles and are well equipped to deliver products that meet their immediate needs. But channel distinctions are starting to blur. E-commerce, click-and-collect options and a trend toward stores with smaller-footprints and diverse offerings are raising the bar of competition. Quick-serve restaurants (QSRs) are also evolving by freshening their menus and remodeling their stores to appeal to younger consumers.

It’s also important to note that convenience stores are largely reliant on drivers, yet Americans’ interest in driving has declined over the years. In 1983, 87% of 18-year-olds had driver’s licenses; more than 30 years later, that percentage has dropped to 69%. At the same time, U.S. gas prices are rising. The U.S. Energy Information Administration projects that the average household will spend about $200 more on gas this year than in 2016.

As a consequence of several consumer shifts, including digital technology usage and driving trends, Americans are making fewer shopping trips than just a few years ago. According to Nielsen Homescan data, the total number of U.S. retail trips is down more than 1 million since 2012 (15.8 billion last year, vs. 17.6 billion in 2012). In the convenience/gas channel, Americans made an average of 11 trips in 2016, down from 14 back in 2005. Consumers are, however, making up for their fewer trips with bigger baskets, buying more units and spending more money per trip. Last year, convenience store sales eclipsed $140 billion, up 11.5% from $125.9 billion in 2012.

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Fill Up, Fuel Up and Empty the Trash

May 26, 2017

Convenience retailers spend about $600 per store per month for recycling and trash collection programs, or about $1.2 billion industry-wide on an annual basis.   

ALEXANDRIA, Va. – Seven in 10 American drivers (70%) say they dispose of trash from their cars while refueling, according to the results of a national consumer study by NACS on attitudes related to trash. And convenience and fuel retailers concur: 56% say that most trash in their trash cans at the fueling island is not generated from the store.

In early April, NACS conducted consumer and retailer surveys to gauge consumer and retailer perceptions about litter and trash leading up to Earth Day on April 22. Retailers say they spend more than $600 per store per month for recycling and trash collection programs, or about $1.3 billion industry-wide on an annual basis. The payoff is worth the expense, as convenience stores continue to grow their foodservice sales, which climbed 12.9% to $49 billion in 2016. The convenience store industry is also working with Keep America Beautiful to provide guidance to its members on best practices for recycling and trash management.

Consumers overwhelmingly say that store appearance is important when considering where to make a purchase: 84% of consumers fueling up say cleanliness of the store is an important factor when considering whether they go inside the store to make a purchase. Litter is also among the most highly cited reasons why people don’t want a convenience store in their community. (Read more on this topic in the February NACS Magazine cover story, “Don’t Be Trashy.”)

And more than 9 in 10 (92%) say that the convenience store they visit the most often tends to be clean, compared to the 85% who say that convenience stores in general tend to be clean.

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Maximizing Summer Opportunities

May 19, 2017

Often, the difference between great sales and mediocre sales is attention to detail. There are certain tasks that c-stores can accomplish that will generate a positive impression in the mind of a customer.

By Jim Callahan

Strong retail sales growth in January and February indicate that consumers are still confident in the U.S. economy.

Indicators of consumer confidence are hitting highs not seen in a decade and should bolster the U.S. economy even more in 2017, according to a recent Kiplinger report.

While it may feel a bit premature to begin forming—then executing—a summer plan that begins with the long Memorial Day weekend and ends with the Labor Day weekend is, be assured most of the major players in retail have already mapped out their plans for the entire year and are thinking beyond summer and looking at holiday strategies.

But, let’s tackle one season at a time. Now is the time to prepare your stores—inside and out. That might include everything from new windshield squeegees for motorists who pull in to fill up; to a new beer cave with an automatic temperature control that keeps the product at a steady temperature.

THINGS BIG AND SMALL
Of course, squeegees are a lot more economical then a beer cave. In the end, your operational budget will dictate the level of upgrades. Still, the point of this article is to remind retailers to keep their eyes on the details, no matter how big or how small.

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4 Social Media Tips for Retailers

May 8, 2017

Kay-Tee Olds, known online as The Mobile Contessa, shared tips on best practices for social media during CSP’s Loyalty Forum in Chicago.

Most of Olds’ presentation was focused on real-world interactions between convenience stores and customers concerning loyalty programs, but it became clear when the floor was opened to questions that retailers were hungry for advice on the constantly changing social-media landscape.

Here are four tips Olds shared on managing a successful social-media strategy …

1. Navigating multi-channel options

When one retailer asked whether each of his stores should have its own Facebook page, Olds’ answer was swift and blunt: “I’d shut that down today.” She said it would be a logistical nightmare to try to manage so many different pages and that it’s important to keep a brand’s message unified.

Another attendee said that he uses a different tone on Facebook and Twitter when interacting online with customers, and asked if this was a sound practice. Olds again stressed the importance of a unified message, but pointed out differences between platforms.

While brands can get away with around 12 Twitter posts a day without bothering followers, Olds said more than two posts a day on Facebook can be annoying. She also encouraged attendees to examine what they’re doing to get followers of one platform engaged in others.

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Personalization Helps Retailers Compete

April 21, 2017

BRP report shows how personalization is critical and what it means.

According to a new special report from Boston Retail Partners (BRP), personalization has gone well beyond simple marketing to demographic groups, customer segments or even personas. It is more than simply greeting a customer by name when they walk in the store and it goes beyond merely offering product recommendations on your website. Personalization is not just a trend – it is a critical way for retailers to differentiate their brand to compete against companies like Amazon, according to the BRP SPECIAL REPORT: “Personalizing the Customer Experience.”

“Consumers’ constant ability to shop and easily research products and prices has made it imperative for retailers – especially those with brick and mortar locations – to find creative ways to entice customers into the store,” said Jeff Neville, vice president, BRP. “The best and most powerful way to do this is through personalization.”

Personalization encapsulates all the details that make your customer’s shopping experience unique to her. It involves knowing your customer and understanding her past purchases and current interests, but it also encompasses how the experience itself meets the customer’s needs for a personalized product or service.

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