Here at Taiga, we’ve been working long hours since our founding last June to accomplish a single goal: The launch of our Front Office Platform, the first real-time data analytics platform purpose built for the Convenience Store Industry. We were sure that a 5 minute demonstration at the M-PACT Conference would be enough to fire your imagination about how your operations could become more efficient and profitable overnight. We expected our Front Office Platform to takeoff at the M-PACT Conference and instead we got: THE LOCKDOWN.
So, like you, we’ve been thinking. The LOCKDOWN won’t simply revert back to 2019 in a few weeks or months and allow us to pick up where we left off. In fact, many things have changed and some of those changes are permanent. Together, we all need to adapt to the “New Normal” which will take some time and a massive amount of collaboration across the industry. To do our small part, we have decided to publish a free weekly newsletter where we share the new trends that we identify and their impact on convenience store operations. We have decided to call this the New Normal Newsletter.
The Topic of this week’s New Normal Newsletter comes from a recurring conversation that we have had with several convenience store operators. I wouldn’t be surprised if you have had a similar conversation so please read on…
“Fuel sales used to be a reliable indicator of how in-store sales were performing and depending on which source you use, fuel demand is down at least 50% across the US. Surprisingly, since the Lockdown began, most of my stores have only seen a decline in retail sales of 20%, and, there are a handful of stores that are actually outperforming their numbers from last year. It’s like my customers changed overnight along with my top selling items. What is driving these changes?”
We volunteered to use our Front Office Platform free of charge to investigate. Our Front Office Platform is a one stop shop for convenience store data analytics. To keep the process simple, we used sales data from 4 types of stores: urban, highway, residential and rural. Once the data was uploaded, Taiga’s Front Office Platform immediately began to provide useful insights:
– Customer Segmentation has changed at all 4 categories of stores. At the urban stores where “coffee commuters” were the largest segment, local residents have replaced them. **We’re planning to do a full market basket analysis in a future newsletter. No matter what we find, it’s clear that Fuel purchases are no longer the key driver.**
– Age restricted sales are up across the board. In Addition, wine was the fastest growing subcategory of alcoholic beverages and the margins on wine were among the highest.
– The perception of cleanliness and a lack of lines is driving grocery store customers to visit c-stores more often. Keep doing the little things that make your store clean and safe: good lighting, hand sanitizer stations, plexiglass shields etc.
– General Merchandise sales were up across the board. This is another indicator that customers are going to a convenience store rather than a large grocery store.
– Non-edible grocery sales were also up. Some categories were up 250% so it’s critical to track the sell-through rate of these items to avoid being out of stock. OTC pain meds like Advil, were among the top sellers in this category by volume and profit margin.
– Propane sales were up by an average of 500%. While this trend was consistent across February and March, we’re watching it to determine if it is a one-time demand spike caused by customers “stocking up” or if demand will continue because customers are using more propane at home.
The start of the pandemic provided these simple data analytics for conveience stores, but a lot has changed since then. Imagine what you could learn from Taiga’s Front Office Platform now!