Decoding Trends: Navigating the 2023 NACS Show with Taiga’s Front Office Platform

10/19/2023 | Comment

Now that the 2023 NACS show has concluded and we have all returned home, I wanted to take this opportunity to reflect a bit on the show and themes our team saw while we were there. The NACS Show was a great place to learn and connect, as usual. It was also great to see so many of the Taiga team in person.  While we were in Atlanta, my team and I had the opportunity to attend education sessions, connect with friends and clients, and walk the show floor to see the future of convenience retail.  As we went through the week, we saw three pivotal themes that are reshaping the convenience store landscape: Digital Transformation, Artificial Intelligence and Customer Experience.

Digital Transformation: Powering Smart Retail

Digital Transformation is no longer a choice for convenience retail but a necessity, dominating discussions at the 2023 NACS Show. Consumer expectations are evolving almost as fast as technology and convenience retailers must keep up. Digital Transformation was defined in one of the education sessions with Alix Partners, Yesway, and Pilot  as “the change and acceleration a company undergoes through the integration of digitally enabled innovations at scale”. This digital transformation is occurring as many convenience stores are fast-tracking their adoption of digital technologies; from self-checkout, to dynamic pricing, to personalized customer journeys to chatbots and voice recognition. A consumer study reiterated that digital innovations can impact each of the value drivers for consumers. In the study, Alix Partners found that consumers value innovations tied to payments and mobility (i.e., self-checkout, contactless payments, and mobile app/loyalty). However, listening to consumers feedback on technology investment is essential to ensure adoption of these new technologies. Consumers stated they are more likely to adopt technologies that are somewhat familiar AND that make their in-store experience better.

Artificial Intelligence: Revolutionizing Operations

Artificial Intelligence (AI) is a subset of digital transformation and was, in itself, a theme of the show. AI is becoming more prevalent in C-stores, from predictive analytics helping optimize inventory to AI-driven customer service chatbots. Some examples of how AI can help convenience retailers are with predictive analytics on loss mitigation, labor forecasting/staffing optimization, sales forecasting, and inventory optimization. One example given for AI was having AI track sales against predictive analytics to identify when an item was going to go out of stock and send an alert, just like Taiga’s Front Office Platform does with our Issue Detection module. The most important application of AI was in customer experience.  Customer expectations for service and a personalized experience continue to grow. AI can help meet ever changing customer needs as it can provide you with real-time, relevant information on your customers and their habits so you can provide them with an optimized experience. 

Customer Experience: Beyond Transactions

Customer Experience was probably one of the most important themes of the show.  As I reiterated in several previous articles, customer behavior changed during the pandemic, with people looking to convenience stores to replace their grocery runs. The era of c-stores just being a quick stop for snacks is over. Convenience stores are transforming into community hubs, focusing on personalized experiences. As convenience stores are looking to enhance customer experiences, Taiga’s commitment to this theme is evident in our technology roadmap and will be available soon to our customers. We are using our aggregated data to decipher purchasing patterns, preferences, and demographic data in order to provide a detailed segmentation of customers for c-stores.  This data will help convenience retailers tailor promotions to individual customers, fostering a sense of belonging and turning one-time shoppers into loyal patrons.

Now What? How To Take Action

So as a retailer, how do you take advantage of the NACS 2023 trends?  As you look to implement digital transformation and AI to provide a better customer experience, make sure your systems are set up so you can see the data and results from these investments.  You wouldn’t put money in the bank without expecting to see a return on it, right?  The same goes for investments in technology – don’t put in self-checkout, promotions, or a loyalty program without ensuring you have systems in place to track performance and make sure you get a return on your dollars spent.

That’s where Taiga can help – our Front Office Platform can work with the other systems in your stores to aggregate and categorize your data, allowing you to see results easily and quickly.  Say you install self-checkout – Taiga’s system can display the adoption rate, compare sales between self-checkout and cashier, and provide details on items purchased through self-checkout.  The ROI will be right there for you to see, and if something needs to improve you can identify where to focus your efforts. Don’t worry about the Taiga platform being out of date for changes in technology.  Our platform is versionless, so it is continuously upgraded for customer needs. This means that if you want to see a new dashboard view or adapt your platform for a new technology, we can make it happen without adding costs.

2023 NACS Show Recap

The 2023 NACS Show was a great experience for the Taiga team, and it helped us understand the priorities for the industry: Go digital, leverage the power of AI, and prioritize customer experiences. The good news is that Taiga’s Front Office Platform isn’t just keeping pace with what convenience retailers need; it’s leading the charge, enabling retailers to thrive in this transformative journey.

Convenience Stores Have a Problem with Data

09/15/2023 | Comment
The Really Big Expo – March 1, 2023 MEETING ROOM 205 – 8:30 AM – 9:30 AM – Length: 30-60 minutes Presented by: Taiga Data President, John Oakley Description: Convenience store retailers have a problem with data.  It’s not that they don’t have enough data, but that there is so much manual effort required to turn that data into actionable insights. Back office systems just manage the data, but Front-Office technology unifies the disconnected silos of data in convenience retail and uses AI to automate the process of turning that data into insights.Click on the button below to watch our president, John Oakley, present at the 2023 SE Petro Conference. In this presentation John discusses the data challenges faced by convenience retailers today, and solutions to those problems that ultimately lead to greater efficiency and improved profitability at all levels of a convenience retailer’s organization.

Capturing the Value Within Your Own Data to Maintain Margins

09/15/2023 | Comment

When inflation increases the cost of CPG products by 22% and consumers begin to exhibit recessionary behavior, retailers are left with a complicated problem to solve. The winning solution in the current economic environment is capturing the value within your data to measure and understand what is occurring and to form tactics and strategies that ensure you are meeting your customers’ changing needs.

“The key to success in times of change is gaining better visibility into your data,” said Bill Ivers, CEO at Taiga, an analytics company serving c-stores. “In order to do that, the first step is to have your data properly aggregated and cataloged so that you can analyze it at the subcategory level and drill down to the brand, supplier, SKU or basket level.”

Having clean data allows retailers to pick up on even the most subtle consumer purchasing changes and take action to mitigate any negative impacts. Effective category management comes from really understanding how consumers are shopping in your stores and ensuring you have the right products in the right places at the right prices when they are looking to purchase, according to Ivers.

“You need to be performing this type of analysis frequently because new behaviors are continuously appearing and then fading away every quarter,” said Ivers. “You could miss out on a trend altogether if you happen to sell out of the trending product or, conversely, you could end up holding a lot of excess inventory when an item’s sales slow down.”

Taiga’s Front Office Platform delivers real-time alerts on just about any metric a retailer chooses to track, according to Ivers. “When that metric gets outside of the normal zone, alerts are sent via SMS and email. The things I would be monitoring right now are unusual increases or declines in a specific category’s revenue or volume of sales,” he said. “Our platform runs your data through AI constantly, and it will realize, ‘In the salty snack category, they’ve now exceeded a 20% increase,’ and it sends an alert.”

Promotional Strategy Can Impact Changing Consumer Behavior

Once retailers are leveraging their data effectively, Ivers suggests they take a closer look at their promotion strategies. Taiga’s Front Office Platform gives retailers the tools to analyze each of their promotions, including the take rate, pool margin and other important metrics.

“I can’t emphasize promotion strategy enough,” Ivers said. “If promotions are the leading driver of your consumer purchasing right now, you need to go through your promotions and find out how they are really performing so you can optimize to attract more customers.”

Pricing Adjustments Can Drive Revenue and Margins

Ivers also suggests that c-store operators watch their pricing as consumers become more price sensitive.

“Pricing is a key lever in times of inflation, and looking at your data to see where you can optimize pricing to maximize both revenue and profit is very important,” he said. “With Taiga’s Price Optimization tool, our AI can recommend price changes, both increases and decreases, that will deliver the highest revenue and margins.”

Demand Forecasting Can Maintain Margins in an Inflationary Environment

Ivers says that convenience retailers should eventually consider demand forecasting as well.

“I think it’s vitally important to maintain your profits on quick-service food or freshly prepared foods, of course, but retailers should go even further and look at the demand forecast for some of their staples,” he said, adding that Taiga’s demand forecasting within its Front Office Platform can accurately predict the next 72 hours of sales demand for any product, category or subcategory at a specific store.

Ivers says that looking back at inflation over the past year, and how CPG products went up, retailers need to detect rising costs quickly and have a sound strategy in place.

“Taiga’s tools allow you to get your handle on market trends as well as pricing and margin impacts,” he said. “Instead of taking the hatchet and making big changes without knowing the outcomes, our tools allow you to get out your scalpel and precisely carve out the changes that will maximize margins and minimize losses.”

This article is was originally posted on the NACS website in September 2023.

How CPG Inflation Has Impacted Convenience Store Shopping

09/12/2023 | Comment

The past year has not been easy for convenience retailers as CPG inflation has negatively impacted in-store margins, and there’s no clear end in sight. While there are multiple articles discussing that sales revenue has increased year over year, the real impacts of this inflation can be seen in shrinking margins.

Bill Ivers, CEO at Taiga, an analytics company serving c-stores, saw the impact of inflation on CPG product margins beginning in early 2022. That’s when convenience retailers increased pricing to maintain margins amid rising costs. However, the price increases resulted in changes in consumer behavior patterns that ultimately yielded smaller margins and were evident by Q3 2022.

CPG Inflation Convenience Stores Shrinking Margins

 

Inflation and CPG Margins

The driving factor for these changes in behavior was inflation. Over the five consecutive quarters ending in March 2023, CPG prices rose by a total of 22%, as retailers raised prices to maintain their margins. At that point consumer behavior began changing rapidly. The month of March was the tipping point where inflation peaked and a combination of other economic events, like the failure of Silicon Valley Bank, contributed to undermining consumer confidence to the point that NIQ described consumers as exhibiting “recessionary behavior.

“My research revealed that most convenience retailers were not keeping up with the rapid pace of inflation. I began to see CPG margin compression all over the place,” Ivers said. “The impacts of this continued from early 2022 all the way through the first quarter of 2023. In March of 2023, we began to see a crisis in consumer confidence, which led to a major change in purchasing behaviors. For example, consumers began to prioritize perceived value, buying on promotions and substituting private labels for name brands.”

While inflation rates may be slowing, we are not out of the woods yet. The aftershocks of this inflation-cased behavior are far reaching. Ivers says that once consumer behaviors have been altered, they don’t necessarily revert back. Some of the changes in consumer behavior that happened during the pandemic are still in place. Convenience retailers need to adapt for these changes and adjust promotion and merchandising strategies accordingly.

Increasing Consumer Value

“Customers are seeking perceived value with their purchasing power,” said Ivers. “Promotion strategy right now is extremely important.” Loyalty often goes hand in hand with promotions, and customers are wide open to joining loyalty programs if they feel they can receive special offers, he added. “It is good timing to grow your loyalty channel. Customers are more receptive to loyalty programs than they were just a year ago.”

Because customers are seeking value, they are buying more private label items. “We are seeing some consumers moving away from premium products and choosing products that they perceive as a better value,” Ivers said.

It’s one thing to understand what’s happening with consumer-buying behavior, but it’s another to implement strategies to address this in your business. This is where Taiga comes in. Taiga’s cloud-based platform, processes and expertise help retailers become more data-driven and take quick action on that data.

“It all starts with having the data. That’s the foundation for an effective strategy against inflation—and being able to accommodate the evolving customer,” Ivers said.

This article is was originally posted on the NACS website in September 2023.

Getting to “Why”

06/08/2023 | Comment

A couple weeks ago, we onboarded several new members to our sales team. As a part of that process, our new team members spoke to existing clients to get a user’s perspective of our technology and services. During a call, we asked one client to describe how using Taiga has  transformed their business. He responded: ”I could always understand what happened within my stores by reviewing my back-office reporting, but Taiga is where I go to answer the question why.”

Upon hearing his response, many of us realized that simple statement was one of the most concise and accurate descriptions of what our platform achieves that we had ever heard. A Front Office Platform, like Taiga, can help you understand “why” your business is changing.  Many of today’s convenience retailers are currently in the challenging position of having the data to know what is happening but operating without the insights to answer the question “why”.

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 The Importance of Asking “Why”?

Take your pick, all the most prolific business writers talk about the wisdom of asking why at some point or another. From the classics like Covey, Carnegie, and Drucker all the way through to the modern era. If you have ever read a book by Malcom Gladwell, it’s a deep dive into asking “why” and the importance of using data to answer the question.

Whether your goal is to grow your revenue and margins, make your processes and staffing more efficient, or reorganize your operations, asking “why” is the key to identifying the areas where you can improve and setting up a strategy aligned with those goals. Without knowing “why” achieving these goals is far more challenging for Convenience Retailers.

 

You can’t get the answers you need 

For the typical Convenience Retailer, it can be difficult to ask the question “why” because there are major technical and time intensive hurdles that must be traversed to get an answer. A Retailer may find the “what” in their monthly financial reports – that sales of non-alcoholic Packaged Beverages have declined by 10% month-over-month – but not know the “why”.  But most times getting to the “why” currently requires a process something like this:

  1. Using SQL, a staff member has manually poll raw data from each store (takes at least an hour)
  2. Then a staff member must manually organize and clean the data (another hour or so)
  3. Next, the data will be sent to another department where they will manually analyze it in a spreadsheet with pivot tables etc. (this can take hours to days)

 

Finally, all this manual effort gets to an insight, but at this point you are at least a couple days (and a lot of times weeks) from when the question was asked. So, is the data still relevant?  Even if the data is relevant, it is typically only a partial answer because the data set is incomplete. Did your team factor in any of the following that could have impacted the data?

  • Changes to customer demographics or traffic?
  • The impact of supplier price changes, new promotions, and loyalty?
  • Are customers making substitutions, lifting other product sales?
  • Is there a seasonal shift in demand or is the change a result of something else?
  • Were there any inventory issues?

Since asking these kinds of questions and re-analyzing the data is so time consuming,  Convenience Retailers operate on instinct rather than facts, most of the time.  As a business leader, if “why” is the most important question that you should be asking, then you need to have the answers available at your fingertips.

Stay Competitive

Whether dealing with a labor shortage, a pandemic, or a post-pandemic recession, carefully tracking macroeconomic trends that may disrupt the Convenience Industry is not enough. Being able to ask “why” and immediately get the complete answer to explain the changes in your business is the most valuable exercise Convenience Retailers can perform.

A Front Office Platform can help you understand “why” your business is changing. Seeing the data from all your sources in real-time and at your fingertips can help you make business changing decisions quickly and easily. Click here to learn more about Taiga’s Front Office Platform and how our solutions enable Convenience Retailers to go from what to “why” and adjust their business to keep up with the changing marketplace.

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How to Become Data Driven

03/23/2023 | Comment

In this second installment of our two part article series with NACS Daily in March 2023, we discuss how Convenience Store Retailers can become more “data driven”. Specifically how they can save time and increase revenue by using Taiga’s Front Office Platform to turn the clutter of all their data systems into actionable insights they can use to improve their business.

Click the link below to read about the importance of turning raw data into real-time actionable insights.

How To Become A Data Driven Business