On the rare occasions that I actually take a golf lesson, the pros always talk about consistently hitting the ball with the “sweet spot” on the club face. “When you find that sweet spot, the ball will fly further, straighter, and higher while landing softer.” Then they show me a picture of some famous golfer’s five iron with a worn spot the size of a dime right on the “Sweet Spot.”  I’ve searched for that Sweet Spot a long time and I’m growing more and more certain that it is just a marketing myth to sell more golf clubs.  But just because I can’t break 90 doesn’t mean that you can’t improve your margins by finding the Sweet Spot for your product pricing.

For convenience retailers, pricing products in the Sweet Spot that maximizes margins while maintaining unit sales is anything but a myth – good store operators have done it for years.  But recently keeping prices aligned has become a major headache because Covid, gas price gyrations and inflation are causing those elusive price Sweet Spots to jump around more frequently.  To make matters worse, your suppliers are increasing their prices more often, and cutting into your margins every month.

If you tried to keep up with this on a manual spreadsheet, you could overwhelm your staff and still run out of time, leaving heaps of money on the table. You can’t just ignore these changes, because customers are pinched for cash and growing more price sensitive. If they notice significant differences between you and your competition, they may decide that your stores are charging too much, which could change their behavior for a long time to come. 

The science behind finding the pricing Sweet Spot for each product is called Price Optimization. The good news is that a real-time front-office platform can automate all of the manual analysis, making very accurate pricing suggestions and even send them out as real-time alerts, whether you are trying to raise prices while maintaining sales volume or raise prices while maximizing gross profit.

Taiga is well positioned, with its real-time Front Office Platform, to provide a solution to retailers looking to perform rapid Price Optimization. Again, Taiga has collaborated with its clients to develop a scalable system that can measure price elasticity for every product at every store in real-time. With the addition of Price Optimization to your front-office platform, you will be able to price your products in the sweet spot a lot sooner than I will become a scratch golfer.

If you didn’t have a chance to read our article from last week about the difference between front-office and back-office systems, click here. I think it will give you a new perspective on your technology and help you prioritize your next investment as we head into 2023.

 

I always look forward to this time of year when the Summer is fading, football returns and Austin may finally get some cooler weather.  Fall also includes the NACS conference where many of us will be visiting Las Vegas to learn about and discuss new trends and technologies in the industry.  In that context, I wanted to highlight a technology transformation that has begun to occur in the c-store industry – the adoption of Front-Office Technology.

For decades now, the primary technology used by convenience store operators has been Back-Office software.  This category of software was introduced when the c-store industry was undergoing its first “Technology Transformation”.  Back-office systems were developed to replace pencil and paper by automating accounting and administrative processes like the end of month reporting, inventory control, tax preparation and reconciliation.  These systems make use of batch imports of historic data from your POS to report on what happened in the past.   The ROI from back-office systems is derived from automating manual processes and reducing the amount of time team members needed to perform those tasks. These systems have been improved over time, but they are generally considered “legacy” systems because they were originally developed on older technology that is difficult to enhance.

The convenience store market is now in-the-midst of its second major Technology Transformation which is being driven by the adoption of Front-Office Technology. Front-office technology includes forward-looking products that have been designed specifically to drive revenue, increase profit and improve customer satisfaction. Generally speaking, front-office technologies have the potential to deliver a much larger ROI than back-office automation.

As we have been preparing for our trip to NACS and talking with our clients and prospective clients alike, it has become clear that convenience retailers have identified the need for front-office technology. After experiencing so much disruption and change over the last few years, they have realized the systems that they have in place were not adequate to keep up with the pace of change. Some of these retailers have even made significant investments into their front-office but they have ended up with partial solutions that would require an enormous effort to tie together.

Taiga has developed the c-store industry’s first comprehensive Front-Office Platform. Our entire organization has been carefully designed to be the foundation of your Front-Office strategy. We provide complete solutions to your challenges like: Price Optimization, Promotion Analysis and real-time operational alerts – just to name a few. We’re also proud to be an open system and we offer real-time integration with any of your other technologies so you can consolidate everything into a single Platform.

To learn more about Taiga’s Front-Office Platform, and how you could generate a much greater ROI from your technology, please feel free to contact us.

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