Convenience Matters Intro:
[Music] You’re listening to Convenience Matters brought to you by NACS. Whether it’s for food, fuel, drinks, or snacks, about half of the U.S. population shops at a convenience store every day. We’ll talk about what we see at stores and what the future may hold for our industry.

Carolyn Schnare:
If you haven’t noticed, dollar stores look a lot like convenience stores these days and convenience stores look a lot like grocery stores and lately, even restaurants have little stores in them too. And the stores on the internet, well, they don’t look like any of those other stores, but they sell a lot of the same stuff. They’re all after your customers and they want them to use their wallets to buy these things. And some want them to use their phones, to do it all. Today. We’re going to talk about how to win the competition game and how to measure your success in doing so. I’m Carolyn Schnare with NACS and I’m joined by my cohost…

Donovan Woods:
Donovan Woods with the Fuels Institute and NACS.

Carolyn Schnare:
And Donovan, do you remember way back before in the before times when we sat at a table together, we talked with one of Aaron’s colleagues, Gunter Pfau on a similar topic. Remember that? It was like light years ago. I think it was last year.

Donovan Woods:
Yea, yeah, that was light years ago! There we go. Okay.

Carolyn Schnare:
You know, we like shared snacks from the same bowl. Like it was…#memories! {laughter} Anyway, today we’re actually really happy to have Aaron McClean, chief marketing officer of Stuzo with us today and virtually of course, and Aaron, thank you for joining us.

Aaron McLean:
Hi Carolyn, Hi Donovan, it’s great to be here.

Carolyn Schnare:
So Aaron, when we led off, I was talking about retail competition, which includes both brick and mortar stores and the internet. This is something we’ve been focusing on, or you’ve been focusing on at Stuzo you call that, getting the share of wallet. Can you tell us a little more about how you define that?

Aaron McLean:
Yeah. Carolyn, a few key things to think about, pertaining to share wallet. So the first is, you know, you were talking about how customers shop across the different categories. Like convenience is going after grocery, grocery is coming into convenience and there’s this sort of like cross-pollination of categories happening. it’s important to understand that each customer, they actually have many different wallets across all the different product groups, where they spend their money. They have, you know, food wallet, they have age verified wallet for tobacco and alcohol. They have a fuel wallet and they have CPG wallets. And these customers are spending these wallets, not just in the convenience category, right? Because the competition for share of wallet, the battle for share of wallet has been intensifying so much, especially in the last 14 months. So these wallets are now being spread across, not just convenience, they’re being spread across grocery in the dollar category and even the, the online digital native and companies like Amazon or like Gopuff. So then that’s the kind of first thing to understand. It’s like there are these, all these wallets that, that exist across different categories. But to break down, share of wallet a little bit further, I want to use like Sheetz as an example, like when I was a kid growing up Sheetz was our spot I mean late night munchies, you know, and like for fueling up and for, you know, getting a quick breakfast sandwich, all that stuff like that, that was our go-to place. So I’ll use myself as, as an example, like I would typically, you know, buy maybe 10 breakfast sandwiches. I would get, you know, out and about in any given month and Sheetz, they would typically have about five of those. So the way we think about share of wallet is for Sheetz. Their share of my sandwich wallet is about 50% because I’m buying half of my sandwiches with them. And the other 50%, those are being spent with other retailers could be other convenience. Retailers could be other QSRs, it could be elsewhere. So we think about that entire wallet, all of the sandwiches that I’m buying, not just with Sheetz, we think about all of those as the wallet capacity. And so for us, there’s a really key thing in there. And that is, within that wallet capacity, there’s a certain amount that I’m not buying it Sheetz. So for Sheetz, that becomes what we call the wallet opportunity. So if Sheetz could get me to buy more of those sandwiches that I’m already buying with them, that means Sheetz would be incrementally getting more of my wallet capacity. And if they could do that profitably and change that behavior over time, so that I’m always buying more of my sandwiches with Sheetz, that would be a great outcome for them. And that’s what we refer to as “wallet steering.” We actually have a system for it…Trademark Stuzo “Wallet Steering.” {Laughter}

Donovan Woods:
I love that. I love the breakdown because share of wallet. That makes sense if I’m a consumer, especially if you’re a consistent consumer, like you said, you mentioned one retailer in particular, and if you went there all the time and I have my favorite retailers of different categories, that makes perfect sense. But now is, or would you define share of wallet as the main metric or it’s at the main KPI or key performance indicator that retailers should be focused on?

Aaron McLean:
It’s a really important KPI. The way we tend to think about KPIs is like there’s an 80/20 rule, right? And that rule is that 80% of the value of having KPIs. You can probably get out from about 20% of the metrics that you focus on. So it’s really important to find the right metrics and focus on those. And while a share of wallet is a really important one, it is a measure for the increase in customer lifetime value and customer lifetime value for for many marketers, that’s a sort of like penultimate KPI. It’s the one that they care about the most. But there are other KPIs that are really important. Like how many new members are being signed up to your loyalty programs, your payment programs. It’s also really important to look at your transaction volume and other purchase behavior.

Donovan Woods:
Now, you mentioned one other thing I wanted to ask this first, but it kind of just slipped right past me because I was so engrossed in the share of wallet itself, but when it comes to share of wallet and you mentioned, sort of why the competition is greater for now, what are some of those reasons? Could you really emphasize what those reasons are as to why it’s more important right now?

Aaron McLean:
Yeah. You know, it’s interesting, and this has been a trend in the industry for several years now, right? I know you’ve both talked about it on the podcast many times before. Consumer behavior has been changing, and it’s been evolving rapidly, but the last 14 months, since the beginning of the pandemic has really ushered in very rapid growth in behavior change. So then what happened was, as you know, more, more consumers are getting more comfortable with buying things online or ordering ahead or getting delivery. Now, all of a sudden the government and healthcare agencies are telling us we all need to stay home. So what happens right away? All of a sudden our behavior is basically forced into going “okay, well, I guess I have to buy more of my stuff from Amazon. I have to order more from Gopuff and stay here and get it delivered.” So as that behavior has changed, the dynamic within our industry and convenience and fuel, that also meant less site trips for us. So this change in behavior has really heated up competition for share of wallet across categories, especially with digital natives, getting even more of that. But it’s also creating a really unique and special opportunity for us right now to be able to capitalize on that, on those new changes in behavior.

Carolyn Schnare:
Yeah. Like you said, it was such a rapid change, right. And, it was like lock down, don’t go here, don’t go outside, don’t go to your grocery store, don’t go anywhere, wear a hazmat suit and wash everything and don’t touch anything and don’t touch your face. And don’t all those things. It was so complicated and it was quick. It just really landed on a lot of us and it threw everybody into a tizzy. So I would have to imagine, and I saw it too through NACS, a lot of retailers just kind of patchworked it, threw it all together, got it going, got up the app, got up the website, figured out delivery, printed their paper signs with a Sharpie and said, like, “pick up here!” because you just didn’t have, nobody had time to think we all just were making due. But, now that we’re stepping back a little bit we’re…most of us starting to come out of this pandemic a little more thoughtful looking back on what worked, what didn’t work. And I’m sure that’s a lot of retailers too, because, you know, like I said, they put some things together and some people already had apps and delivery metrics or opportunities, but just really got a chance to like, look at that. So you mentioned the KPIs that you were talking about, that retailers would want to focus on in order to make a really strong program, but what are there some really core things that these retailers, listening and our listeners should think about to keep in mind or pay attention to when they’re really looking at their loyalty programs and their customer programs.

Aaron McLean:
The way we’d like to think about it is, try to keep it simple. And that is: focus on the KPIs that are directly correlated with your targeted business outcomes. That’s really the place to start. You figure out what kind of outcomes you’re looking for, and then which KPIs can help you understand your progress against achieving those goals. And if you had to like dwindle it down and just focus on a key set of KPIs, those are the ones to start with, and those are the ones to put your focus behind.

Carolyn Schnare:
So, that makes perfect sense. And, we want to talk about setting that baseline for success, for performance. Taking it back to the very basic, like you just said, what’s the, so what/now what here? What are some basics that some retailers can really do in order to get, even to that point or even perfect what they’re doing now?

Aaron McLean:
How do we set a baseline? How do we think about what the performance should be or what it needs to be right to help us get moving in the right direction against those business outcomes? You know, as I mentioned a couple of minutes ago, it’s like we’re sitting in front of an incredible opportunity right now. We believe as an industry, we can do even better than we’ve been doing before. You know, because digital has accelerated, I mean, literally over the last 14 months, digital has been accelerated by years, both in adoption, by consumers and in the availability of new digital experiences and technologies that retailers brought to market incredibly fast in response to the pandemic and what an incredible job the industry has done by the way to address these changes so quickly. I mean, just really impressive what we’ve seen across the board. But of course, in that happening, what we’ve seen is this consumer base, they’ve now adopted these new behaviors and they’re demanding kind of a higher bar, right? So what we see is it really is time for convenience and fuel retailers to raise the bar. So a question that we like to ask is how could we get to know up to a hundred percent of our customers? All of them, right? Not just a small fraction to get into our loyalty program or payments program, but how can we address the total addressable member opportunity of our programs? And it’s not just about having a loyalty program. There are so many ways that we can engage our customers with payments programs, enabling customers to buy and pay the way they want to. So that’s personal and works best for them by offering frictionless and more seamless, you know, store and payment experiences by offering a really exceptional in store experience and by cracking personalization across channels and really getting that right. These are all areas where we collectively, as an industry, need to raise the bar for performance.

Donovan Woods:
So Aaron, I have a have a question that’s not really, I don’t wanna say the word scripted, but it’s just something that’s been on my mind, especially with someone as professional as yourself. And so well-spoken, and you know, you’re really hitting on the key terms I think that customers want to hear and retailers, it seems like you’re not saying anything that isn’t attainable. Everything you’re mentioning is something that every retailer one should already know in terms of how to put the customer first. But you’re also mentioning things as a reminder, as these things are changing, as you move forward, you’ve got to move with the audience. So let me ask you this: You’ve been at Stuzo for about six years now. What would you tell yourself, you know, coming into this, you know, this is a year after COVID…what would you tell that guy who is now coming into this role and seeing what the market looks like? What are the kind of the most important things that he could focus on right now, after hearing this podcast help his team really focus on and really move forward, because we have time to kind of think about these things and put them together, but how can someone listening really turn this podcast off once it’s complete and then go, “yes, we’re going to do that!” What’s one of the things you should jump on, like right now?

Aaron McLean:
You’re right. I’ve been with Stuzo now just about seven years. How the time flies. It’s incredible. I guess if I could tell my former self…if you could whisper into the past. If I can say something to Aaron from a little over a year ago, what would I say? I would say you’re doing the right things and the retailers are doing the right things. Figuring out how to address more of your consumers on a personal level, figuring out ways to make them feel appreciated and special, to go out of your way, to deliver a really exceptional experience, whatever that means, whether it’s digital or in store with customers while they’re offsite, keep doubling down on those things and then bring all of, bring all of that data that you’re getting from all those interactions, bring it together and take action on that data. Use it to make better business decisions. Use it to be smarter about how you engage with your consumers and your, the members of your programs and deliver more personalized experiences. It’s like, “hey, we’re all on the right track here! Let’s double down. It’s working.”

Carolyn Schnare:
You know, Aaron, you made me think of, I guess, my perfect experience would be I walk into a store and like, they know I’m there. They already know I pulled into the parking lot. Somebody got an alert that said, “CAROLYN IS HERE!” She is in the parking lot, and she’s on her way in. And then I come in and they say, “hey, Carolyn!” And then, you know, in my dreams, balloons start falling from the ceiling on me and everyone starts cheering. But, besides that, I guess, what I think would be really cool is if, not only did I go and I purchased, let’s say that day I was getting a sandwich and a drink and I walked over to the register to pay and I’m maybe I’m even self-checking out. Right. And I’m ready to pay through, you know, the, the machine thing on my own. And I’m ready to pay. And it’s like, did you want… and it tells me, or suggests to me something that I want, that I’ve purchased before, that it knows about me from my profile or whatnot. Like, I don’t want it to ask me if I want like a hoagie and I’m here in Virginia because that’s a, that’s a New Jersey term or, you know, would I like to add another pop because I don’t know what that means. I’m from Virginia. I’m not from the Midwest. I don’t know what a pop is. I do actually, but I’m just saying I want it to know exactly who I am and offer me the right thing. It’s like, you know, when you’re on an online retailer and some weird ad pops up and you’re like, no, that was not what I was looking for. But anyway, I guess my bigger point basically is I just want it to know me. I want it to know that I spend this muc. I’ve got extra points. I’m cheap, I like a freebie here and there. So throw a candy bar at me and I’m like the happiest human on the Earth. And I’ll take all those balloons with me and all my food and everything else and I’ll go on with my beautiful day and, you know, I’m coming back like the next day, maybe later that day, because I just feel, treasured. And then on top of it all, like my payments went through smoothly. I didn’t have to like fumble through my wallet, like it was already in there. So, I mean, I know that’s probably a pipe dream out there, but, I guess to me, that’s just something that’s really cool is that all these things are starting to talk to each other, all these programs, all these apps. And to you, this is something that’s like, of course they did, I designed them like that. {laughter} But I mean, also, you start to expect it at one place. You want to see it in another place too. So I don’t really have a question there. I just want to talk about balloons, but, I guess, you know, Aaron is there…

Donovan Woods:
That sounds like a regular day for you coming in the office, Carolyn, just balloons dropping and everything.

Carolyn Schnare:
Whee!!! I guess Aaron, that’s basically what we’re talking about here though. You know, what would it be called? Like, what’s the right word for it…a coordinated customer experience, I think is what I would call it?

Aaron McLean:
Yeah, Carolyn the way we like to think about it, we use the term “unified”. And that it’s like one seamless, unified experience for the customer, right? Because Carolyn, like you were saying, when you’re going into your convenience retailer, it doesn’t matter to you, whether you’re at the pumps or in the store or flipping on your phone, you know, checking your points balance. Or even if you’re at home still thinking about what you might want to get once you get to the store. That’s all part of your experience with that brand. And so the brand needs to have an understanding of all the things that you talked about, about your prior purchase behavior, the different wallets that you spend with that retailer, your wallet capacity and that is how much of that wallet you’re going to be spending so that they can use all of that data really intelligently. And to do that in real time, just like the example you shared so that when you walk into the store, not only are the balloons falling, Carolyn, but they’re your favorite color!

Carolyn Schnare:
Yes, yes! {laughter}

Aaron McLean:
Right? Because we can acquire that data and we can use it, the data, intelligently, Carolyn to make you feel appreciated and special. And of course the more you have that relationship, the more loyal you become to that brand, the more share of wallet you spend with that brand, and then the greater customer lifetime value that brand will get has a reward for treating you so well.

Donovan Woods:
You know, Aaron, one of my top five scifi movies all time is Minority Report with Tom Cruise. And I feel like we’re getting closer and closer to that world where you do walk in and I don’t know how the information shared, but it’s shared and retailers know who you are. And you’re excited. When I think about that, here’s a question for you. We’ve talked about the benefits from a consumer side, you walk in and you feel great that they recognize who you are. Yes, I want this, I want that. You made Carolyn’s day great. But for a retailer, especially those listening, we want guarantees. Right. We want to know, okay, yes, this may sound like a nice program, but what are we going to really get out of this? How can we be sure. And I remember announcement, you guys made…Stuzo made recently about a loyalty program, performance guarantee. Can you tell us a little bit more about that?

Aaron McLean:
I mentioned a couple of minutes ago, we have what we call our wallet steering system. So the announcement that we made basically what it comes down to is we are so incredibly confident in our wallet steering system, which just quickly to touch on that is a combination of our open commerce products of our managed services and what we call our “know and activate method.” Those three things together make up the wallet steering system. And we are so incredibly confident about that system’s ability to perform and effect real meaningful business outcomes for retailers that we’ve announced a 1.5X Performance Guarantee. And what that means is for retailers that make the switch to Stuzo and they follow our wallet steering system that we’re literally putting our money where our mouth is. That’s how confident we are. And we’re guaranteeing that we will at least 1.5X, the number of members in the programs and the transaction volume in the programs. That’s just the start.

Carolyn Schnare:
Well, so, you know, I don’t know if you’ve already found a balloon vendor that like, you know, automatically drops all those balloons. So you definitely want to add that to your portfolio. I’m sure there’s somebody out there, if there’s not, and you’re listening, here’s a great idea. But in addition to that, what’s next for Stuzo? You guys seem to have figured it all out, but I’m sure there’s more, back there!

Aaron McLean:
Carolyn, there’s always more to come, right? Our jobs as innovators are never over and that’s because the jobs, the job of the retailer is never over, right? The market changes so much and so fast and consumer behavior changing rates. So our job really is to keep pace with all of that and ensure we’re doing everything that retailer needs to stay in front of the next changes in the market that are going to help them go after, capitalize on, the next big opportunity. And kind of related to that, you might’ve also seen some other news that came out from Stuzo just recently. We have taken in a strategic investment from Long Shore Capital Partners. We’re really excited about this investment and the new partnership that we’ve formed with Long Shore. And basically what that means is, we are doubling down on what we talked about earlier, and that is the unification of loyalty, commerce, and the cross-channel customer experience. And we’re doing all of this to even further unlock the power of data, all those things that we talked about, where Carolyn, you know, you said, oh, maybe it sounds like it was a bit of a pipe dream, right? But for us, we’re living that dream. We’re building that dream and we’re delivering on the promise of that dream to retailers. And we’re also doubling down on convenience and fuel. We love this vertical and we see significant growth opportunities in front of all of us. And we know that this is the right time to be committed to convenience and fuel.

Donovan Woods:
Nice. Very nice. So if you’re listening right now and you, maybe you skip ahead 15 seconds when I’m talking about Minority Report or about Carolyn’s dream day at work or anywhere she goes where she’s getting balloons, that’s fine. We understand. But pay attention to this part right here. Aaron, where can listeners learn more about the program? Get in touch with you, a website. Can you give us that clearly so everyone can capture that information?

Donovan Woods:
Absolutely. Please visit us at Stuzo.com, www.stuzo.com. Drop us a note, we will get right back to you and we very much like to hear from you.

Carolyn Schnare:
All right. They’re already calling the phones are ringing, that’s awesome. I’m going to put that that in our show notes as well. So if you’re listening, you can just find that on your browser. Well thank you so much, Aaron, for joining us. Thank you, Donovan. Thank you, balloon manufacturers, and thank you all for listening to Convenience Matters.

Convenience Matters Outro:
[Music] Convenience Matters is brought to you by NACS and produced in partnership with Human Factor. For more information, visit convenience.org.