Paula: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.
Paula: I’m your host, Paula Thomas, and if you work in Loyalty Marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
Paula: So welcome to episode 28 of Let’s Talk Loyalty.
Paula: And as I record this episode, first of all, there’s some fairly dramatic decisions being made in the city that I live in, in Dubai, in the UAE, which really consists of things that I wasn’t expecting, such as our airline basically grounding itself and our shopping malls closing down.
Paula: And I think even when I launched last week’s episode of the show, I kind of felt we really needed to acknowledge the challenges of the coronavirus and exactly how that’s impacting on loyalty.
Paula: And that’s in its most basic form.
Paula: So where we normally talk about structured loyalty programs, today I really wanted to bring in a subject matter expert around what can be done at the point of sale for people in the retail industry to really just optimize the customer experience and just give them that overall sense that we’re looking out to their best interests.
Paula: So what I’ve done is I’ve invited in the chairman of Liquid Barcodes, which many of you know I work with extensively and have done for the last number of years.
Paula: And I love Liquid Barcodes, the technology and the whole convenience retail industry.
Paula: And Bob is an industry veteran.
Paula: In fact, he has 38 years of experience specifically within this sector.
Paula: And what he’s going to talk to us today is what exactly are the ideas that we should be considering given the impact and the potential for supporting the community through this industry.
Paula: So Bob Stein, welcome to Let’s Talk Loyalty.
Bob: Thank you, Paula.
Bob: Good evening to you.
Bob: Good morning to me here in Cleveland, Ohio.
Paula: Absolutely.
Paula: And I’ve already complimented you on your lovely spring tie, Bob, this morning.
Paula: So thank you for brightening up my day.
Paula: Great.
Paula: So listen, Bob, I just, first of all, would love you to go through, I suppose, the most relevant parts of your career.
Paula: You’ve got, as I said, 38 years behind you.
Paula: So tell us about the convenience industry and the work you’ve done over that time.
Bob: Okay, very good, Paula.
Bob: Convenience industry is in my blood.
Bob: Those of us that have been in it say that.
Bob: So as Paula said, it’s been 38 years.
Bob: I started out as a treasurer coming out of public accounting in a convenience store company in Connecticut in the US many, many years ago.
Bob: And we grew into a very large, one of the largest in the country, 1,200 locations.
Bob: Through a series of hard work and luck, I became the CEO of that company, Dairy Mart.
Bob: So I was very, very involved and in retail and in the lifeblood of convenience stores.
Bob: So that was the first sort of section of my career in C-stores.
Bob: We sold that particular chain to Circle K, which is a global C-store chain today.
Bob: And then I got into the technology business that serves convenience stores.
Bob: So the company that I ultimately went with was Calibrate Technologies, which used to be called KSS.
Bob: And it does fuel price optimization, helping people price their fuel, and also loyalty programs related to fuel, and then network optimization, which is really how you should think about building out your chain in a city, a country, whatever geography.
Bob: So I spent 18 years doing that.
Bob: So I’ve been very committed and responsive to the convenience store industry.
Bob: And I think it’s a wonderful industry.
Bob: It’s an essential industry to communities, particularly today, given what we’re going through in an industry that serves a great purpose.
Paula: It sure does, Bob, absolutely.
Paula: And again, I know there’s a lot of listeners in the convenience retail industry already, and they will definitely know your name and reputation.
Paula: So it really is great to have you on the show.
Paula: Now, I always do start with a statistic, usually a statistic about loyalty programs and their impact.
Paula: But I think given that we’re focusing on convenience retail today, you have some extraordinary statistics really about, I suppose, the sheer scale of this industry, which I had completely not appreciated until recent years.
Paula: So maybe you’d share some of those statistics with us, Bob.
Bob: Yeah, certainly, Paula.
Bob: So the convenience store industry is truly global, and there are approximately, there’s over a million locations throughout the world.
Bob: In the US, where I’m resident, there’s over 152,000.
Bob: These are statistics that come from the National Association of Convenience Stores, which oversees our entire industry.
Bob: So it’s everywhere in the world, obviously offering essential products, fill-in purchases from supermarkets.
Bob: These days, a lot of food service, high-quality food service, and certainly gasoline, where many, many see stores, most, in fact, in the world, also sell gasoline.
Bob: So again, a very critical and important.
Bob: Brick and mortar, I would say.
Bob: So brick and mortar is not completely going away.
Bob: We do need businesses like convenience stores to serve our needs.
Paula: Yes, absolutely.
Paula: And a couple of the other statistics, because again, I’ve worked with yourself and with Naxx, obviously, in recent years.
Paula: And the figure that I remember really blew me away was that 50% of Americans visit a convenience store every day of their lives.
Paula: And I just thought that that was extraordinary.
Paula: How little I had appreciated the importance of having these community services almost.
Paula: So really are hugely impactful, both revenue-wise and just in terms of making my everyday life very, very easy.
Bob: Yeah, exactly.
Bob: I mean, there’s many cases where there’s customers that go multiple times a day to convenience stores or certainly multiple times a week for various needs and purchases.
Paula: Absolutely.
Paula: And I suppose on a quite a serious note, the fact that the Homeland Security Department of the United States has just this week deemed that the convenience stores are an essential sector to continue operating despite the advice for every other sector to really shut down.
Paula: I suppose that’s further clarification of the importance of this whole industry and what we’re working with.
Bob: Yeah, and I think that’s two reasons and the right thing to do.
Bob: One is, in essence, there are many grocery stores.
Bob: I hate to minimize convenience stores to that because they do so much more, but in this case, they do provide the basic products that people need.
Bob: Obviously, for transportation purposes, our frontline workers, our first responders, a lot of essential businesses still need to drive places, so the gasoline stations need to be open.
Bob: And another thing, psychologically, I’ve walked down to my corner store these last two weeks every day to get the newspaper and to get a cup of coffee.
Bob: It gives me fresh air.
Bob: Everybody’s practicing social distance in the convenience store.
Bob: People are wearing gloves and being careful.
Bob: So it’s also a way to still be in the community.
Bob: Not with a lot of people in there all at once, but serving all those needs.
Paula: It sure is.
Paula: And in fact, the only time I suppose I’ve ever really realized how important that was, was in Ireland, for example, where I’m from, as you know, if it snows and the country grinds to a halt.
Paula: And that’s probably just a taste of what we’re all dealing with now.
Paula: And again, it’s only when you can’t get in the car and you realize actually proximity and access to just actually human interaction, even if it is at a distance, certainly has a role to play to keep us all sane.
Bob: Yes, indeed.
Paula: And I’d love to go back, Bob, to some of our earlier conversations about loyalty and convenience.
Paula: So as we said, it’s an essential service, but it’s also one of the industries that’s only really gotten into, I suppose, formal loyalty programs in the last, I’m going to say maybe five or six years, that, you know, as far as I can tell.
Paula: So why is it exactly that, you know, airlines have been doing it for years, hotels have been doing it for years?
Paula: Why is convenience retail relatively late to the party in terms of recognizing that opportunity?
Bob: That’s a great question, Paula.
Bob: I think it’s a few things.
Bob: One is that the business, and speaking for the US is so dominated by the gasoline pumps.
Bob: The initiation of loyalty was to relate, getting people to the pump, and then hopefully they come into the store.
Bob: So it was really, in my mind, it wasn’t as much loyalty.
Bob: It’s a form of it, but it’s discounting.
Bob: And that’s just another form of promotion.
Bob: So a lot of the industry first started that way.
Bob: How do we get more people?
Bob: How do we get them there?
Bob: And once we get them, then they’ll come in the store.
Bob: So that’s one reason.
Bob: The second reason is a lot of the promotional activity in convenience stores has historically been mostly driven by the CPGs, the consumer product goods companies.
Bob: So they set the promotions.
Bob: It’s a lot of couponing and all that’s wonderful.
Bob: Don’t get me wrong.
Bob: The one thing that has been missing that other forms of retail or restaurants had, and that’s customer engagement.
Bob: So I think the clear change and evolution of loyalty in convenience stores now is to continue to do things that are proper for the pump to relate to the store.
Bob: That’s good to continue to have coupons coming from the various manufacturing companies, but also to really understand how do I engage my customers, keep them loyal to me and my brand.
Bob: And I think that’s what real customer loyalty, and we’re seeing more and more convenience store chains understanding that true concept and how the digitalization of things can help create that true customer engagement for my brand.
Paula: Absolutely.
Paula: And I know location, location, location is something also that the industry offline, as we talked about the bricks and mortar, has always been possibly the first decision a convenience store would take when it’s opening a new business.
Paula: And you’re right, this whole digital store and this whole access, so when you’re not in the physical store, actually you have a way to be in communication and connecting with your customer base.
Paula: That is something I think that so many brands from Starbucks to 7-Eleven, they’re really realizing the opportunity.
Paula: So yes, it might have taken a bit longer.
Paula: And I know the term that the industry really is super focused on is reducing friction.
Paula: So I think it’s the optimization of connecting with your customers, but in a way that also makes their lives easier.
Paula: So I think what we’re seeing, actually, and certainly from you, with the technology background, it seems that that’s where the loyalty programs are essentially plugging into that whole industry.
Paula: Yeah, excellent.
Paula: So we know the loyalty programs are being built.
Paula: And again, we’ve written about 7-Eleven Rewards or the Starbucks Rewards programs.
Paula: But I suppose the piece that we really wanted to talk about today was how can we operationally support the convenience industry when they are being challenged to distance themselves in so many ways from their customers?
Paula: And I know you have some really interesting ideas around that.
Paula: So maybe just talk us through exactly those kinds of ideas.
Bob: Okay, thanks, Paul.
Bob: I really do have some thoughts on that.
Bob: This is a horrible crisis that we’re all dealing with with this coronavirus.
Bob: And we need to take heed of the public health officials who rightfully are talking about social distance, what it means.
Bob: But having said that, we still need our countries to operate.
Bob: We still need our people to be taken care of.
Bob: So getting this specific to the convenience store industry, most convenience stores have not been in an order and pay environment, like a lot of restaurants and other businesses are.
Bob: So I’m not necessarily saying shift all the e-commerce.
Bob: That’s a different subject.
Bob: What I’m talking about are having a certain number of products that consumers today in this situation can feel comfortable, safe to be able to order online and have those products available for them at the corner convenience store, which also, by the way, is good protection for the employees, having a few less people having to come into the store in terms of shopping, but have the order ready.
Bob: To order and pay, I think, is an extremely valuable, socially responsible thing to do for C stores all over the world.
Bob: And Liquid Barcodes has such an offering a module that can be a very simple link even into existing loyalty platforms that a convenience store operation anywhere in the world could get an order and pay system up and running literally in a week.
Bob: So I sort of make this as not a sales pitch, I apologize if it’s coming that way, but a call to action in this circumstance, which isn’t just a short-term thing, because I think ultimately moving forward convenience stores can certainly have some of their food service products and other products on an order and pay.
Bob: But right now, if we concentrate on what really matters, how do we all practice in every aspect of our life, the maximum ability for social distancing and order and pay can do that for convenience store operators.
Paula: Well, I can hear the passion, Bob, and certainly I don’t think anyone will need to be convinced.
Paula: I really believe that there are so many stores that can easily make this change.
Paula: And they haven’t needed to in the past.
Paula: So again, as you said, e-commerce is not the issue.
Paula: That’s not what we’re talking about here.
Paula: And also this show is not about, you know, pitching or selling or anything else like that.
Paula: And in fact, I don’t really have many technology companies on the show exactly because it is around education.
Paula: But today, I really feel that what we are doing is educating all retailers out there that there are mobile solutions available.
Paula: And order and pay is something that normally happens in a queue with, you know, a lot of proximity to a lot of people.
Paula: And what we’re saying is there’s a completely different way to do that in a very quick and convenient way for retailers.
Bob: Yeah, and I would add, Paula, because I know a lot of your listeners are all forms of retail, obviously not just convenience stores.
Bob: This order and pay can go to other retail establishments that may not even be able to stay open today.
Bob: Like there’s talk of maybe liquor stores or beer and wine stores that could have restrictions.
Bob: And most of them aren’t having people buy online.
Bob: Now you have to follow regulations that might exist for things like that.
Bob: There’s book shops, book stores that unfortunately are having to close down.
Bob: There’s coffee shops.
Bob: You could go on.
Bob: There are a lot of other particularly small businesses.
Bob: One of the most hurtful things throughout all this is how many small businesses are being shut down and negatively impacted.
Bob: So this order and pay solution really is broader than just the convenience store.
Bob: But certainly where convenience stores are essential businesses to be open for our communities and our people, it’s something that really they should try to put in place as soon as possible.
Paula: Love it.
Paula: Love it.
Paula: And Bob, just for the sake of again listeners who may not have a lot of technology awareness, for example, can you just talk us through the consumer journey?
Paula: So let’s say my local convenience store has implemented this order and pay solution you’re talking about.
Paula: What do I do as a customer?
Bob: So there’s a simple customer screen that would come up that for a particular retailer, you can pick the store.
Bob: There will be a drop down menu, first of all, because obviously you’re going to a certain store.
Bob: The retailer, and this is all customized to each retailer, they can put in as many or whatever products that they want to offer on this order and pay solution.
Bob: So the customer sees all these products and they literally, and there’s a picture of every product.
Bob: So it’s a very visual experience, and they just literally pick the products that they want.
Bob: There’s another tab in there that will say approximately what time do you want to pick it up.
Bob: They can put some notes, they can put some comments in it, and that order will specifically go to that store, because on the store side, they will have a store dashboard that deals with what their orders are, and they can fulfill those orders.
Bob: So it’s a very simple, easy process, both for the customer and for the store employees in the convenience store shop.
Paula: Wonderful.
Paula: And then when the customer arrives in the store, so there’s usually like a designated area, do they scan a QR code, or what’s the collection process then?
Bob: Actually, the store employees will have done that before the person even gets in.
Bob: That’s the beauty of this.
Bob: They can come in and pick up their order on the counter, and just take their order home.
Bob: So all of that operational activity would already be done by the store and not having the customer have to wait for that, or wait in line.
Bob: And obviously, you can pay.
Bob: The pay system is through PayPal, which is a very credible system that most people in the world are aware of PayPal.
Bob: It’s all linked into a PayPal account that the customer can pay for.
Bob: So there’s no transaction in the store.
Paula: Amazing.
Paula: Amazing.
Paula: So it’s literally taking everything that the customer would have done and delayed physically in the store and putting that onto their own mobile phone to do as and when they’re completely comfortable and safe.
Paula: And then literally it’s a few seconds just to go and collect the stuff from the store itself.
Bob: Exactly.
Bob: And I want to say this too, though, Paul.
Bob: This is not saying to everybody you shouldn’t go into stores.
Bob: Again, the convenience store industry is doing a wonderful job with sanitation and training their employees.
Bob: So once you’re in the store, you might want to buy something else.
Bob: But the point here is you can get certain things that are important and essential to you.
Bob: And that shopping experience can be enhanced and sped up, and the payment can be sped up because you have it in this order and pay mode.
Paula: Yeah, yeah, absolutely.
Paula: And in fact, you know, and it’s not just because of this crisis, you know, I was even reading about Starbucks there in September last year.
Paula: I know in Manhattan, they have launched, for example, a store where it’s purely order and pay.
Paula: So it’s no longer, you know, the third place exclusively where you go and sit down and spend time.
Paula: But it’s for people like us who are busy and who are literally going, I know I need these things on my way to work and my way home.
Paula: But let me preorder, prepay, and literally it’s a collection or pick up point.
Paula: So it’s definitely the way the industry is going anyway, from what I can see.
Bob: It is, Paula.
Bob: And if I tie this back to loyalty, if you look at the evolution of convenience stores, they were first just brick and mortar stores.
Bob: And you walked up where you drove up to the store and you had to pay for everything in the store.
Bob: When Pay It, the Pump first came out as a convenience to consumers, a lot of people were concerned to say, well, people aren’t going to come into the store and I’m going to lose business.
Bob: The reality after time is what that proved is, it was part of loyalty.
Bob: It was part of convenience.
Bob: It’s why somebody came to your store.
Bob: So in other words, if you didn’t have Pay It, the Pump, you may have been losing business.
Bob: So I think potentially order and pay, because our world is going to change in a lot of ways after we’re through this crisis.
Bob: There’ll be different consumer behavior and habits, and we will do more digitally.
Bob: We’ll never eliminate brick and mortar again.
Bob: But I believe that order and pay can become that next evolution where convenience store, you can walk into a store after this crisis is over.
Bob: You can walk in like you always did in shop.
Bob: You obviously can pay at the pump and then walk in the store, or you can pay at the pump and have an order and pay before you come.
Bob: And somebody brings it to your car, for instance.
Bob: You can do a combination of those three.
Bob: So I do think it’s a business model that isn’t just for this current crisis, although it would be very, very important.
Bob: I think it’s an evolution of a good business model that will enhance the customer loyalty experience for convenience stores.
Paula: Yeah, and I totally agree.
Paula: And as I said, Bob, when I’ve been writing, the more I’ve written about programs all over the world from China to the UK, it’s when the business sits down and goes, what does my customer really need overall?
Paula: So yes, I want a loyalty program.
Paula: I want to have digital connection with them, and I want to have all of those opportunities to connect with them emotionally.
Paula: But actually, I want to make their lives easier as well.
Paula: So it’s just back to that point about making your business operationally efficient and combining that with a rewards structure.
Paula: And overall, we’re just driving loyalty through everything that we do in one digital communication.
Paula: Fantastic, fantastic.
Paula: So listen, I think we’ve really done, I think it’s a great idea, and certainly when it comes to the show notes, Bob, I’ll make sure we have links to talking about Liquid Barcodes, sorry, links to the solution itself.
Paula: And then I suppose just, are there other ideas you’ve seen happening either online or with other retailers in the United States?
Paula: I know, for example, Circle K, you already mentioned Circle K.
Paula: They’re doing some fabulous work, which is really around giving teas and coffees to health care workers.
Paula: So those kinds of ideas, are you seeing that happening in the US as well?
Bob: Definitely all over the place.
Bob: I mean, one of the things in a crisis, as we all know, we don’t wish for crises, but it shows the best in humanity, the best in people, and it really just puts us all together that we’re a community and we have to help each other.
Bob: And the convenience store industry is stepping up big time, as are other industries.
Bob: I mean, restaurants, having their curbside delivery, I just got a meal at my favorite restaurant this past weekend, and the owner was out there personally thanking everybody.
Bob: And I gave the biggest tip I’ve ever given in my life because I just appreciate that they’re open and I recognize that they’re doing that.
Bob: So the sanitization has been stepped up immensely in convenience stores.
Bob: The whole supply chain is critical.
Bob: So we have distributors who bring products and vendors to bring products, and all this is being communicated to the industry.
Bob: And I’m really heart-warmed.
Bob: Again, my whole life, I’ve been in the convenience store business.
Bob: I love this industry, and the people in it are so entrepreneurial, they’re so caring, and they evolve all the time with how society is evolving.
Bob: And they’re handling the crisis right now, but they will continue to evolve.
Bob: So I just give all the kudos I possibly can to, first of all, all the people that are working in these convenience stores.
Bob: 24-7 to maintain these essential services to the community, and the leaders and managers of all the stores that are doing the right things.
Bob: And I do want to plug the National Association of Convenience Stores, NACS.
Bob: They’re doing a wonderful job.
Bob: They’re tied in with all the government aspect in Washington, DC and throughout the world, and they’re putting out the right kind of messaging, information, education.
Bob: So this industry of 1 million stores, which is I don’t know how many tens of millions of people that work in this industry, has really come together in a spirit of doing all that they can to serve the community in this time of crisis.
Paula: Yeah, and I would wholeheartedly support that as well, Bob.
Paula: And I’ve often said that when I came into convenience retail, what really blew me away was the generosity of information sharing, of education among what are essentially competing brands.
Paula: So I couldn’t believe coming from some very aggressive industries where I worked, the amount of just generosity that I can see, and that’s coming through.
Paula: Again, I get all the newsletters from NACS, and there’s plenty of resources again we’ll link to.
Paula: So there is an incredible amount of work being done.
Paula: And again, everybody’s under almost reactionary.
Paula: I know there’s been plans for lots of things that might happen, but I don’t think any of us really foresaw a health pandemic of this scale.
Paula: So yeah, there’s full guidelines.
Paula: I know that NACS are issuing in terms of how to deal with anything and everything that convenience store retailers, or indeed other retailers might be worried about at this particular time.
Paula: So is there anything else you wanted to cover today, Bob?
Paula: I think, again, kudos to the Circle Ks, kudos to anyone that’s looking after the health industry, as best we can, but anything else you wanted to share on today’s show?
Bob: I guess, Just, I encourage all of you in the convenience store or other industries I mentioned, try to get some order and pay set up.
Bob: It’ll be good for you, good for your business, good for the community, and a good evolution of your business model.
Bob: And I guess I would just close back to your, you mentioned Mike Tai.
Bob: It is spring, and I do think we all have to have hope.
Bob: We’re going to get through this.
Bob: We’re going to come out of the other side because the human spirit is going to allow for that.
Bob: So flowers to everybody on this spring day.
Paula: Wonderful, wonderful, Bob.
Paula: And I know you do some leadership training as well.
Paula: So I can see all of that coming through now in your coaching and keeping us all inspired.
Paula: So thank you so much for joining us on the show today and really do appreciate your insights and order and pay.
Paula: So thanks for everyone from Let’s Talk Loyalty.
Paula: Thanks so much for listening to this episode of Let’s Talk Loyalty.
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Paula: Thank you.
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