Episode #9

Location is Everything Summit: Adapting to the Next Normal Consumer

At our 2nd annual Location is Everything Summit, speakers from Wawa, PwC, and Sevan joined us in an engaging roundtable about adapting to the next normal consumer and changing store formats. Access the full summit on-demand: https://learn.tangoanalytics.com/location-is-everything-summit-2021
Location is Everything
Location is Everything
Location is Everything Summit: Adapting to the Next Normal Consumer
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In this Episode

At our 2nd annual Location is Everything Summit, speakers from Wawa, PwC, and Sevan Multi-Site Solutions, joined us in an engaging roundtable about adapting to the next normal consumer and changing store formats.

Access the full summit on-demand:

https://learn.tangoanalytics.com/location-is-everything-summit-2021

  • Transcript

Episode Transcript

Bart Waldeck:

All right. So let’s jump into the panel itself. As I mentioned, a great group of very experienced individuals joining us here to kind of talk about COVID and post-COVID and how that’s impacting store formats and how retail organizations are trying to deal with that reality and change and shift. So I’m not going to attempt to introduce all of the guests because it never has worked very well for me. So I’m going to take that risk off of my plate and hand it over directly to our guests today. And why don’t we start with you Michelle Walsh from Wawa.

Michelle Walsh:

Hello, I’m Michelle Walsh with Wawa. We are a chain of about 935, I believe, as of today, convenient stores across six states. We specialize as far as a point of differentiation in an extensive food service offer and more food service oriented, or QSR type setup for a convenience store, but certainly have over I think it’s 780. These numbers change every day stores that currently feature fuel as well. So really shifting business model for us over a series of years. I work in the area of existing stores and modifications to existing stores, remodels and things of that nature.

Bart:

Awesome. Welcome. Thanks Michelle. And we’ll just kind of go in order of the pictures here. So Stephen, why don’t you go next.

Stephen Mulligan:

My name is Steven Mulligan. I work with a company called Sevan Multi-Site Solutions. We are a company that supports anything and everything from customers portfolios. So design services, survey, construction management, portfolio management, and program management. We serve as clients in the retail restaurant, QSR fuels spaces. Some of our big clients that I serve as are 7/11, Walmart and Matter Health but our company has over 55 clients in our portfolio that we support. So my role is an operations director I get to be the client lead and help see their visions across the finish line.

Bart:

Awesome. Thanks Stephen and then Katherine.

Katherine Huh:

Hi everyone. I’m Katherine Huh. I’m a partner in PwC and the real estate team and I lead our occupier services team. So any PwC’s clients that use a substantial amount of real estate, they fall into our occupier services division. So we support them from a strategy perspective, technology, analytics perspective as well. Happy to be here. Thanks Bart.

Bart:

Thank you. I’ll go ahead and dispense with the slide-ware and we can get up close and personal, which is what everybody wants for the round table discussion. So thanks again for joining. I think what might help and you guys touched on it a little bit maybe starting with Michelle you’ve talked about the portfolio, maybe a little bit about the company, your role. If you want to expand on that then Katherine and Stephen you can do the same as it relates to the types of customers that you support.

Michelle:

Sure. My focus in my role primarily is on refreshing the brand in our existing stores. So as we talk about changing environments and to try and kind of foot it back a little bit, I don’t deal with the net new, I deal with the existing. So the 900 plus we currently already have, how do we adapt them either through remodel, a platform rollout, a general maintenance refreshes, or activities such as those even been infrastructure improvements that we need to do periodically.

So that’s my primary focus in my role and it’s kind of germane to as things change. So in some ways it certainly takes longer to make adjustments on new stores kind of from ideation and going through the permit process. But there is a lot more extensive work that needs to be done to change or recondition your portfolio of established stores. So that is my focus.

Stephen:

I can piggyback on that very similar in a lot of what I do to support our clients. A lot of what I focus on currently is on the acquisition side. So taking snowflakes that are getting merged into whether it be a rebrand or a refresh or putting our fingerprints on that location to make it my clients. Remodels then happen into that after it changing controls, there’s an element of that as well. And then we also do new builds ground ups raising rebuilds on the McDonald’s side. It just kind of depends on what the client’s looking for from a rollout perspective. So it can be anything from initial branding or a shelf initiative or complete a rollout of a new site initiative drive through initiatives, et cetera.

Katherine:

And with a lot of our clients we tend to focus on the project management component of doing remodels. And as of lately we’ve been doing a lot around the analytics of what needs to take place in those remodels, the strategy behind that and kind of where do they want to be in the next few years as well.

Bart:

Well, it’s been an interesting year and a half, and it’ll be an interesting several years to come. So I want to just get a flavor maybe again, starting with you Michelle. What is the impact of COVID on the business? How have things changed for you and then Stephen and Catherine, maybe a composite of your clients.

Michelle:

Sure. I think after kind of the initial shocking shattering change, the changes have been more subtle and longer term. There’s no reason to think it’s a permanent correction just yet, but we’ve seen shifts primarily in two areas. One, as it relates to growth of delivery and off prem, curbside as well that we’re seeing not just the need to accommodate that business. And we’ve worked to do that, but also a changing complexion of the size of the transaction. So a significant increase in the size of transaction and there’s labor components and labor necessity that and adjustments that come with that.

The other thing, again, a subtle shift that kind of creates big changes is the shift in time of day for our customers. We had a very strong morning, day part. We’ll call it from 5:00 AM to around 11 that has weakened, it has been very much replaced by the 2:00 PM to 5:00 PM time zone which we typically we’ve been trying to crack that nut for some time. So that’s exciting news that we’re getting customers in our store there, but we’ve seen a shift in a very congested morning. And how do we obviously want everything, how do we get that morning back and keep that afternoon. So that’s really what we’re working on now. So really the quantity of the ticket and the number of transactions by time of day have changed significantly coming out of the initial shocks of COVID.

Bart:

Do you think it could be some other shifts or a lot of the shifts at least lately in particular, are relating to the lack of return to work? So your typical generators of home, work, shopping, distributing the flow from those becoming more residential, maybe more single trip in nature?

Michelle:

Yes. I mean, in the convenience business we were in high volume, high-frequency kind of workspace. So the change in school and, and kind of work from home has had a significant impact. September is going to be very interesting for us as we see what happens as school comes back in session quite frankly, what do the parents do? Do they go back to work or do they continue working remotely or is it some blend of the two? And there is certainly some thought that some percentage of that loss that we’ve experienced in that day part is not coming back, at least not anytime soon. And so how do you recondition the business and kind of shift things around.

Bart:

Katherine, you’re about to jump in there.

Katherine:

Yeah. I was just going to say this building off of what Michelle was talking about. I think obviously every client saw behavioral shifts and I think the key was kind of being able to respond in a meaningful way within the right amount of time. And it sounds like Wawa was able to adapt and respond quickly roll things back if that’s not working. But I think a lot of clients didn’t have the infrastructure in place in order to measure the behavioral change and then to respond to it. So I think that’s been one of the key factors or success factors with a lot of companies throughout COVID.

Stephen:

I was going to add to that. I think my clients have also seen a change in the associate and staffing the associate and what that looks like and how they’re pivoting and looking at their workforce differently based on either availability or limited workforce availability. And then still how to understand that ever changing customer behavior that Michelle was talking about. Are we just replacing something that we previously knew or are we shifting that employee’s role a little bit to look differently.

That grab and go type environment or that Door Dash environments like retraining that associate because the customer is shifting to the Door Dash elements of that are just as much a customer as we see the people coming in and out of the door. So it looks a little bit different and they’re pivoting their associates behavior in trainings and how they’re staffing to meet that need.

Bart:

Yeah. We’ve heard that theme consistently today through a number of sessions. One is labor shortage. Two is, you need different type of associate to do different things that facilitate the delivery or the pickup in addition to changing the format of the store itself. So with the increase in delivery and pickup, what kind of wrench has that throne for you operationally your clients or Michelle for Wawa in trying to handle a little bit of a Nixon in how business is done?

Michelle:

I guess I’ll go first. I’m first somehow in all this.  I would say that primarily there’s really two key elements. One, we tend to in our industry and the business we’re in, we leave not a bit of space unoccupied by some activity. And one of the large things that delivery curbside, those sort of non immediate transaction activities need is ramping space is some open space for staging that we are working through.

We have come up with some pretty quick and easy solutions on how to handle that. That is a real issue, but we feel like we’ve addressed it at least on a small scale and probably will a little more elaborately go forward. The bigger issue is actually the volume of an individual order and the size increase. So where Wawa has always excelled is the onesie twosie order. We do that extremely well and extremely efficiently. If somebody via delivery, which is not an uncommon goes ahead and orders, 10 sandwiches, we have mucked up the works from a production perspective.

And so those 10 sandwiches are now in front of, in the queue a bunch of people who are actually standing in the store that have ordered one and two units, like our typical model. So balancing those two things is our biggest challenge. And we are working through the best way to do that, whether it is to Stephen’s point dedicated labor in order to just work the delivery or a different model, as far as how we handle the queuing of these orders. And we haven’t quite figured out the best method.

In some cases, the best method is to change it based on what’s going on in any individual store, which is not something we love, is to have a very policy across varied things. But some stores are doing far more delivery orders than others. And so how do you create a policy or procedure across the plane when it’s not necessarily best for certain groups of your population.

Stephen:

And also what type of orders that they’re experiencing. You think about what’s available to them in the C-store environment, from a frozen product to a cold product, to a warmer product. And then if you have a larger volume of those warmer items, the real estate is limited. It’s maxed out already. And so what does that customer behavior telling us right now that we can slice something or reshift something else in order to reallocate and move it.

And then going back to that staffing element, does it make sense as we’re limited with the resource to even think outside the box of what the store is. Is it simply just a grab and go and Door Dash type environment and creating that last mile type entity not just on the C-store realm but anything in retail as well.

Katherine:

We had a pretty significant project this year to that point, where we were looking at a client’s portfolio to see which of their stores should be turned into distribution centers because they were seeing from the analytics that within different pockets, it made more sense to just focus all of that real estate on on delivery as the primary model, so yeah.

Bart:

Stephen outside of C-store and obviously you’re dealing with a lot of QSR and some Big-Box. Are there similar problems where everything is accounted for, everything’s purpose built within the store or the restaurant and this delivery and pickup has really thrown a wrench into things.

Stephen:

It has. It changes to the model of how the customer interacts with the business. And when you think about the queuing, it’s two different customer models that Door Dash individual and servicing them for convenience for accessibility is different than how you’re going to treat the customer who’s coming in and reads a menu who wants to have that face-to-face interaction experience. And so you see it on the QSR elements and you also see it in the Big-Box retail. There’s a lot of push for online delivery. How do I get in that queuing and it’s changing the shape of a customer’s coming even in the door themselves.

It’s a pattern of behavior where we’re seeing complete shifts in, I once went into the Bar, the Brick and Mortar location, and now I can simply just do that on an application and avoid that traffic entirely. So then it creates different types of understanding of how do you market that? How do you look at placement of product for a customer that’s no longer in your store to see the product right? You’re to shift how you’re getting them captured with what you’re offering and that, like I said, they’re not even seeing it.

Bart:

Right. Kind of makes sense. So how are you solving this problem or are you solving this problem? It sounds like Michelle you guys are almost not site by site, but you’re dealing with the reality of that given situation, that store, whether one channel is pickup more than another, and then try and look for ways to solve that. But you can’t automatically create a more square footage in your stores. So what’s the answer here?

Michelle:

I think some of what we’re doing is looking for new ways to deliver our current offer. And that’s equipment changes, that’s some differences in how we bring our current offer to our customers in addition to new offers. So companies frequently focused on bringing the new thing, the next new shiny penny. We continue with that, but we’ve kind of parsed off a group to look at delivery of existing offers in a smaller footprint. And how do we do that? And therefore create the space needed in order to provide what the changing complexity of the customer wants Stephen’s exactly, right. It’s a totally different customer.

Their need state is different. And their kind of demands on our business are different. We also have to figure out how to handle the impulse purchase is no fun remotely. There’s a lot of change in how you have to deliver that to the customer. And particularly in food retailing, this is not something that we take lightly. So we are working pretty diligently to look at new ways to deliver what we already have and how to do that in a smaller footprint and more efficiently, in order to create additional void space in our packed out store to provide space, to do these new things.

Bart:

Katherine and then Stephen.

Stephen:

I was just going to highlight the equipment element of that, just the efficiency of equipment. And I’ve seen some initiatives exploring how to … Sometimes we when we add a program into a rollout, there may be a duplication of a similar function. And so there’s push to say, Hey, can we consolidate some of those things again, just trying to reduce overall square footage in the building, what can we move to something else? Can we repurpose it? Do we have to have that?

And asking ourselves also just hard questions on does the offering still have a seat at the table? And it’s shifted. I’ve seen shifts in that dialogue where some of those, what I would call legacy programs are not on the chopping block, but they’re just being questioned. How do we refine those? How do we either bring it back to the table in a different light? Or like I said, modify the equipment to maintain the offering, but more efficiently.

Katherine:

And I was just gonna add. One of our clients, that’s a grocery store. I think the first step for them was really thinking through which app or which platform to do this on initially they had their own app. And it made sense to kind of migrate that elsewhere. They were also able to carve out part of their stores that were used as restaurants, obviously during the pandemic people weren’t coming in to eat. So they were able to change those bring in fridges and really ramp up the delivery efforts.

And then just from a process perspective, they had certain hours of the day when they would have staff do shopping so that the store wasn’t inundated with with staff doing shopping all throughout the day. So I thought those were pretty good solutions. It took a little while to get there, but pretty good solutions for that as well.

Bart:

Is it a kind of a true programmatic view of this and then getting approval to roll out the traditional way of going about that? And I know I made the mistake of using the word prototype with this group. We were getting ready and that’s going to stick in the brain for a while. So there is no such thing as a prototype everybody. It’s a nice concept, but we started talking a little about this MVP or minimal viable product type of concept and how that can be used as a way to test and learn if one of you guys could maybe jump in on that and explain that concept and how it’s used.

Michelle:

Sure. I’d love to actually, we’ve been talking about this for quite some time as an idea, and a concept like you have enough to proceed, give it a shot, let’s see how it does in a store. I think the real first true viable test of MVP for us was during COVID in a real sense that we’re saying we’re not fully baked go anyway, go all the way. Don’t just go to 10 stores and see what happens. We have to go all the way and now particularly delivery being one of those stories.

And now we’re saying, okay, now how do we make it the most efficient? How do we set it up for success operationally in the store? Because we really forced ourselves to say, look MVP can work, but not without some residual back end in which you are constantly modifying, you’re improving. You’re not taking a breath after deliveries all rolled out and saying, oh, thank goodness that’s over. That was rough. But we got it done. Now we have to continue to innovate and improve on what we put out there.

Meanwhile yielding the benefits of that additional offer. Conceptually I really think it was put to the test during COVID and has shown some merit, but we need to stick with it and continue to improve.

Stephen:

MVP also has an executive education component to it where I see Michelle laughing. Where you put out, you have to also supplement with the education like that go back element of it. MVP it’s truly the minimal viable product to get it to a state of existence. It’s not the state of optimization. And we’re just in an element of test and learn and where that go back piece. If it’s not clearly articulated on the front end, even just the ambiguity of it. It doesn’t have to be completely known and it shouldn’t be known because it’s a test and learn space, but some tripping hazards can be in the education of that MVP kind of holistically. We’re going to push this out. And the expectations of traditional rollouts at an executive level are great. We’ve done this, let’s go to something else. It’s like, ah, well, we’ve done it to here, but there’s also some things on the backend that we need to button up.

Bart:

Well to that point, since it’s not a perfect test lab with double blind and everything you think of, how do you prove the sales lift for the investment or can you? How is that ROI decision made with these types of touches to the existing store in an environment that’s moving very rapidly like this?

Katherine:

Yeah. I think the key is having that real time data and that real-time information and having someone who’s designated to analyzing it and helping to make those decisions real time. I mean, obviously during the pandemic the grocery store example, I mentioned before, that’s completely switched to having a designated delivery section of the store. But coming out of the pandemic as people have started to return to work, we’ve seen that in some of the urban locations the lunch crowd is kind of coming back and we need that space back to accommodate them. I think being able to adapt to that behavioral change and you can only adapt if you have the analytics to kind of back up your decision. I think that’s kind of the key to doing that. So, I mean I think the return on investment might be shifting over the next few years or so.

Bart:

Yeah. Michelle, how do you guys look at those investment decisions?

Michelle:

Well, I think even building Katherine’s example, there’s reason to take a pause and not kind of over-correct. Many all of the things that we did were temporary in nature so far. So they were all things that were easily put up and quite frankly, easily undone if the business shifts back to the way it was or to some other reality in addition to that one. So the idea is not yet to overcome it, but to be nimble in those adjustments and make them as frequently as you can, knowing that figuring out how do we invest and what your maximum investment can be.

In a time like what we just experienced is not necessarily the priority. And then you go back and look at it and you say at a time, like now when things have stabilized a little bit, all right, are we even making money on this? Let’s figure this out. And the answers are strong, they’re positive. But in this particular case, which is also very rare, go first, figure it out along the way. And by figure it out, I don’t just mean how to deliver to the customer. I mean, does this pay for itself? And does this make sense?

Bart:

It kind of reminds me of a traditional product life cycle. So it’s going to go early adapters, you got to prove it out, then you optimize, eventually you’ll retire it and move on to the next thing. So it sounds similar to that. But you talked about-

Stephen:

It’s a little bit of a caveat there where it comes back and then goes again. It’s kind of like a figure rate almost if I were to redraw that.

Bart:

Michelle, when we were prepping for this, you talked about kind of push and pull and the desire to touch the store, but then operations has an issue. And so how does operations come into play in these decisions about what should and shouldn’t be done at the location level?

Michelle:

I have said for, well, I’ve been at Wawa 23 years, and I’ve said the whole time if operations doesn’t really like something, particularly on the food service side, for whatever reason, it’s too difficult, what have you, it will fail. It may take them a minute or two, but it will fail. I think that their feedback is instrumental throughout the process. We like to run typically a 1, 5, 30 model, which means you put a new in one store, you babysit the heck out of it. You promote that to five stores. You also babysit the heck out of it. And then you move to 30. And once you’re at 30 now you’re frequently seeing what the reality is going to be.

You can’t babysit 30 stores. Once you get to those 30 stores, I’ve seen programs where we’ve completely changed our equipment package before rollout. We’ve done massive changes to program at that 30 step. During that 30 step, you are doing large-scale analysis, you’re really getting a control group together and understanding how a program is performing against a do nothing status. And you’re really mobilizing to go on the broader scale. I think without those phases you’re flying blind a little bit. And we’ve had to do that in a few cases recently, but that 1, 5, 30 model, I would say the most important part and the easiest step to skip is the 30. And that is really where you understand from ops, if this is going to fly, or if it’s not.

Bart:

A question at that point candidates sustain, scaling and interesting. Stephen or Katherine any thoughts on this?

Stephen:

I just have maybe something into dive into Michelle on maybe a question on that. Just understanding the test markets that you go into, because what we’ve traditionally seen as we feel like we’re confident in these areas, like we know what the customer is. We know what the behavior is. And when everything’s turned on at end, on who my customer is, how do you define the 1, 5, 30 locations? It just feels like the ambiguity of who the customer is maybe could mislead your read of the room.

Michelle:         

It actually depends what we’re looking for. So in 1, 5, 30 frequently, we allow the system we use APT to actually pick the stores for us. There are other times in which we do it by state because the restrictions permitting board of health would have, you are driven by states or barriers to entry will vary by what state we work in. So there’s reason from an operational perspective to do it that way. But frequently we do it based on what the system is going to tell us. It’s a representative sample of our population and of our categories of store against a defined control group in the same status.

Stephen:

My question was, do you feel like any of that’s from a not knowing our customer right now, or figuring out their behavior shifts, we know our customer, but they’re shifting in their patterns. Do you feel like that’s changed any of your outcomes and leaning into the data?

Michelle:

A little bit. In the way that it has is actually things seem to be doing, really great problems to have better, faster than normal. Our early adapters there’s a lot more of them and it’s reaching critical mass much faster. Our last rollout of burgers and fries has been a tremendous rollout for us, that in a pre COVID environment may not have happened. Did we think it would come near that? No. Our data did not support the huge response that we’ve received. So generally I think we’ve seen a more positive adoption of new platforms, new items than negative, but I hear your point that the data is not ready to tell us that things are going to be quite as extreme either way as they have been over the past year and a half.

Katherine:

I’d say Bart also your question was around operations involvement. I’d say that the branding teams are also struggling right now as well, because a lot of the delivery it’s not through the client, the store, so they don’t have control over like a big piece of the experience of the store. So I feel like a lot of clients have been struggling with how to maintain that through this whole shift.

Bart:

Yeah. We’ve been hearing, Opus has kind of, we’re going to go into, multi-channel more, we want that to grow. We want order online pickup in store. We take away that risk of a third party delivery. We get someone in the store, they can experience products in a way they can online as Stephen was mentioning. I don’t know if it’s the same for your guys’ businesses, but we’ve heard almost to a Tee that the margins in these different channels are not as good.

So trying to figure out how to optimize that margin. And that is part of these operational elements. It’s part of a lot of things to try to get something that’s more sustainable as those channels grow more. So, absolutely. Okay. So let’s talk a little bit about the store of tomorrow, if you will. And I know Michelle, in your case, you guys have long development timelines. So it’s a slow turning ship sometimes. Are you seeing any appetite to whether it’s from a pure location strategy perspective, or if it’s changing of the format itself, a greater appetite within Wawa to think differently about omni-channel and location strategy and the format itself on these new items that you’re in the stores that you rolled out. I know that’s not necessarily your area of focus, but obviously it intertwines with what you’re doing in your area.

Michelle:

Absolutely. I think that the appetite is certainly there to explore new ideas. We opened our first drive-through only store in November, December, maybe it was the first week in December toward the end of the pandemic. So we’re deeply exploring that. We also put together a bolt-on version to an existing store and we have plans to test that further. I don’t know that we know enough quite yet. That’s a large undertaking and it’s a big shift in our business, but we definitely have an appetite to look more deeply in those areas. We also have an appetite to look more toward a catering tight model or a large sized order kind of opportunity, not too similar to what some other customers do.

So the business lunch catering type of an idea, and we’re moving in that direction as well. Those things really are not well-suited to our existing format. And so we have to do some things to really commit to those as we work through and decide if they’re the right direction for our business.

Bart:

Stephen, I know you do a lot of work with Walmart they’re ahead of the game, as you might expect in some of this stuff. I think I saw a drone fly by a minute ago with a Walmart logo.

Stephen:

Right. Yeah. Walmart has been very aggressive in that final mile solution in finding out how the customer is responding to that convenience factor. It’s no longer just an online grocery pickup that I come to the brick and mortar to. That’s still a great offering and they’re succeeding in that, but how do they then take the product directly to the customer where they’re at? And there’s a ton of initiatives out there too. Like you said, the drone initiatives, they launched in Fayetteville, North Carolina last year, and what that looks like to autonomous car driving and how that looks. And there’s a lot of exploration of that final mile and how we can make it as convenient as possible for the customer.

Bart:

Absolutely. Katherine I know you’ve worked with Walmart as well, in general, what are you seeing across your clients as it relates to this?

Katherine:

Yeah, I think a lot of our clients are trying them in terms of the store of the future, they’re trying to take out any friction points within the flow throughout the store. So trying to take out payment stations trying to take out you know like if you order similar things every day, just having that pop on your phone, when you walk into the store that you’re going to be picking that up or one of the three that you always get. So just trying to profile their clients a little bit better and take out some of the friction points.

I think the struggle is they’re trying to balance the person to person experience with those friction points as well, because again, with the brand, you want to make sure that the person you interact with, maybe it’s just the person handing your bag has a big smile and it’s part of the experience. But the focus is really around removing any of the friction areas where clients might be getting hung up.

Bart:

That’s a good segue to the kind of technology side of things. And we’ve had several sessions today talking about the challenge in omni-channel to connect the dots in the buyer journey between the online experience and the offline or physical experience and how you can bring those together, whether it be technology with mobility, data, and other types of things, loyalty data.

And then there’s the flip side technology in the store itself, which also can play a role not just the technology that the consumer is using themselves. So give me a couple snippets on technology and areas that you think that are interesting both in the store and from an operational perspective that you think could kind of help in this environment.

Katherine:

Yeah. I mean, I will say it varies by country. In certain countries you can’t control that much data on people and actually in the US there’s some restrictions around that as well. But I think the ideal scenario is to have a very consistent experience between your online experience and your in store experience. I think clients are trying to move in a direction where they really have a strong profile of your spending habits not just at their location, but anywhere else you go throughout the day. And what brands are you buying? What brands compliment the brands that are in the store that they might have and maybe swapping some of those out if they see that trend enough with customers.

So it really is kind of compiling, maybe 10 sources of data to be able to get a really strong an accurate view of the customer. And then once they’re in the store, it’s making sure that you give them access to the things where they’re going to spend their money. So making sure that if there’s a discount code that can pop up on their phone, as soon as they walk into the store if you can already have their payment information on their phones so that they don’t have to pay as they’re leaving, they can kind of grab and go.

Implementing things like that is definitely the direction that we’re seeing. A lot of it is mobile. A lot of it is based off of technology incorporated into the phone. What’s been interesting during the pandemic is with contact tracing a lot of that moved to mobile as well. And a lot of those privacy walls kind of came down a little bit. So I wouldn’t be surprised if we see kind of a ramp up of this kind of behavioral analysis with more stores throughout the country.

Bart:

What we’re seeing is if the consumer sees a value in opting into sharing that data, in other words, you’re using it in a way to improve their convenience, improve anything like that, that they’re obviously much more willing to carve out certain parts of data and not be worried about privacy in those areas because they get something in return.

Stephen:

Echoing some of what Katherine was identifying, simplification is the theme from the technology platforms to make it as pain-free as possible for that user experience on the application and not jumping between different platforms or even having to dive deep into it, to find what I’m looking for. That whatever happens on the back end of that to simplify my user experience is the common theme.

Bart:

Makes sense. And how about from a technology perspective, are you guys getting deeper and deeper into whether it be in store technology or mobile technology to help the consumer experience?

Michelle:

We absolutely are. And I think that both Katherine and Stephen are 100%. The idea is, it needs to look and feel the same across any method of delivery, whether it’s the mobile phone, whether it’s online and whatever we have in store that is a large ship to move. It’s easier said than done, and we’re working to do that. A lot of these things have been bolted on over time. And we have to unpack and put it back together.

The customization is a move that we’re making in that we’re doing custom experiences for our customers from a technology perspective as they come in using our mobile app and loyalty, and kind of building that up to be quite frankly what it should be, which is a standardized experience regardless of how you choose to shop our store. So it’s spot on. It’s simplifying by kind of decluttering years of development and consolidating it into one cohesive and an idea.

Bart:

Okay, we have a few minutes here and I want to kind of wrap with kind of getting a sense of do you believe the pandemic for your clients or yourselves is it increasing the capital investment into the portfolio? And is it also increasing the number of projects that are going on and how do you see that being split between existing stores and new stores?

Stephen:

Regarding the initial response to it, it just changed priority. As we were looking to do X, Y, Z rollouts, they stop observe shift. And now that we’re coming kind of full circle it’s observation. And I don’t see any slowdown in rollouts they just look different than what we had initially assumed this was going to be. And I think there’s some additional elements that program we may not have included had we not had the pandemic in a good way.

Certain offerings that we probably this Michelle was talking about the fry initiative, like those types of things come up where it kind of gave to certain things that gas to go. And it has kind of allowed us to lean into that a little bit more than we ever would have had pandemic not happened. So unfortunately positive in my response to that question.

Katherine:

Yeah. And I’d say from what I’ve seen with clients it’s been positive as well. There are certain industries within the retail sector that it has not been positive for, and they’ve had to do very dramatic shifts. For example, a lot of the stores that were in malls and things of that nature. But I’d say by and large, it has been definitely a positive thing.

Michelle:

I would agree with both thoughts. I think we stopped. We stopped dead and you heard the screeching tires as far as capital investment of any kind. And then we turn things back on and we’ve turned them on probably at a slightly more significant pace than they were at prior to. So we’re moving quickly, both with major capital investment in new stores and remodels as well as platforms. It’s all systems go. All signs are pointing to good right now in terms of consumer interest in continuing to shop our stores in whatever way they choose to. And we’ll be ready.

Bart:

Okay. Last question for each of you and you guys can pick your own order because I keep picking on Michelle. I don’t know why she’s in the top right for me. So I just keep going. So what’s your advice for your peers in the design and construction area or delivery area? How to assess changes to store formats in this climate? What should they be focusing on now versus longer term? What kind of advice would you give?

Katherine:

I would say, and I feel like I’ve been pretty much only saying this the whole time, but if you’re not collecting and assessing the data and analytics to understand the behavior, then you’re at a disadvantage. It’s a must and a necessity because as Michelle was saying, in the next two months, we’re going to see another shift in behavior. And then in another, three months after that, we’re going to see another slight shift in behavior and then six months after that, another shift.

So the dynamic nature of what’s been happening is not over. And it’s just, we’ve had this break where we can actually catch up and make sure that we have the technology in place and whatnot to be able to respond quickly and appropriately. So now’s the time to set up the fundamentals to do that. That would be my advice.

Stephen:

I think don’t be afraid of the one. I’m using Michelle’s terms, the 1, 5, 30. Sometimes what I’ve seen in my past is we have an idea and it just takes a lot of time to get something turned and in motion. And our environment doesn’t always give us the luxury of time anymore. And so when those ideas come up and it’s something that you have a gut with, trust your gut and push for the one, and it may not get to five and it may not get to 30, but at least try.

My advice is just lean into that a little bit more. There’s a lot of great ideas that have come out of this because we were forced to do the one. But look at the great that has come out of it. So I think a repetition of that can really set the industry in a different trajectory.

Michelle:

I think we’re probably in the place where we need to spend some time working on a few things that we may not need it all in and that’ll be great.  So some working through various, if then scenarios of things that may or may not happen over the next six to eight months to really be ready at least to have a framework to proceed that if this happens, we’re going to do that. And here’s how we react.

And then really being able to understand how the consumer has shifted and how permanent it is over the next few months and have some plans in place. To everyone’s point, things are moving too fast for us to, and see what happens and ponder it then. We need to be reacting to a number of different possibilities in equal measure right now, before we know which one wins.

Bart:

Excellent. Well we’re up at time. I really appreciate our guests here today. Stephen, Katherine, Michelle, thank you so much. I think honestly the touching existing stores and programmatic rollouts and things like that is one of the more interesting topics within the context of COVID that I’ve been having discussions with clients about. And you guys have kind of brought that to life. So appreciate it. Thank you very much.

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