One focus that unites operators and corporate dining leaders within the unattended retail industry is the desire to improve market operations. While many leaders naturally review standard business indicators, such as revenue, profit margins, market share and more, to identify and plan for their business goals, there is a deeper level of data to consider when identifying and working toward operational improvement. That’s right, data is an often-underutilized indicator that can elevate business strategy – particularly in the unattended retail space.
365 Retail Markets’ chief technology officer, Krishna Vedula, recently sat down for a question-and-answer session on leveraging data to improve operations. Check out his insights to improve your next strategy session.
Q: What is the first step operators should take to make their market or dining data work for them?
Vedula: Before combing through thousands of potential data sets, operators should first understand the goals they are working to achieve or the gaps they wish to fill. As technology rapidly advances, so too does data and the metadata that it produces, which is to say that data sets can be vast and overwhelming. Therefore, knowing what you are looking for is imperative. That way, you do not set out to “boil the ocean” in hopes of reducing such a massive body of information down to something useful.
However, it is also a healthy practice to aggregate and review your business’ data on a regular basis – before your typical planning sessions such as a year-end or five and ten-year strategy planning sessions. When you consistently review your data, you allow the data to speak to you. Sometimes, it’s best not to walk into data analysis looking for something, but rather, to let the data tell you what to monitor. This is a practice known as avoiding confirmation bias, in which people walk into data analysis with a notion, or bias, that they force the data to confirm. On a lighter note, it’s the same as the saying “if you torture data long enough, it will tell you what you want to hear.”
Observing and analyzing business data on a consistent basis informs those business goals or gaps I mentioned earlier.
Q: Once the data has spoken, how can operators leverage the gems it has revealed?
Vedula: Your business data can reveal so many topics. For example, one of the leading analyses that led 365 Retail Markets and Avanti Markets to manufacture their PicoMarket+ and Avanti Auxiliary Kiosk+, which both feature bill acceptors, is that our data showed that, despite technological advancements, cash is not yet obsolete.
Because retail continues to innovate the way consumers remit payments, this is a data point we continue to monitor not only to help inform our business goals but also to deliver relevant and useful advice to our customers as they continue to expand their markets and dining spaces with our suite of solutions. This year, our analyses reflected that only one-third of our customers’ markets boast completely cashless revenue. This means approximately 66% of our customers’ markets need to continue to cater to consumers who, at times, pay with cash.
Without data, we may have missed out on this large market segment of consumers who still leverage cash. This is something our data told our data analytics teams, and we, in turn, share it with our operators as they decide on the right product mix for their locations.
Q: Now for the question many operators likely ponder … how can data assist in reducing shrink?
Vedula: This is a common concern across many retailers, and there are quite a few approaches that I have noticed data can reveal in this regard. When operators identify that their markets have experienced shrink, the indicator is typically a given time’s revenue versus the anticipated projections based on inventory. Depending on which solution providers an operator partners with, potential shrink causes are easily detectable.
Ultimately, data can identify what products are more likely to experience shrink, what locations experience it most, and, in some cases, at which times shrink takes place. For example, 365’s picking, planogram and backend software options can aid an operator in identifying exactly how much of each product a given market has available for purchase, what device it is housed in, how much it sells for and, depending on the device, even when it is removed from shelves.
Reviewing your stocking and sales data, with 365’s ADM or 365Ops app, for example, can help you pinpoint key indicators on opportunities for improvements in your market. Those improvements could range anywhere from implementing market devices such as the controlled-access PicoCooler to offering subsidies through systems such as ADM on the key items for which your market is experiencing shrink, in order to offset assumed high prices or other financial barriers. Another market enhancement to which data might lead operators is to add another level of security to their market by partnering with organizations like Panoptyc, a micro market security company that leverages artificial intelligence through software and hardware solutions to recognize theft and alert operators of suspicious behavior.
Q: Beyond securing locations, what other benefits can operators anticipate by leveraging data?
Vedula: There are so many other benefits operators can take advantage of by gleaning meaningful data from reliable sources. Some of those benefits include:
- Running more efficient routes to improve market operations.
- Optimizing product mix for their entire operation.
- Automating merchandising decisions.
- Matching product selection with consumer preference.
- Maximizing consumer and client engagement.
- Streamlining picking/warehousing operations.
- Maximizing revenue potential by partnering closely with brands or manufacturers.
Most, but not all, operators are familiar with each of these benefits and are able to leverage one or more of them. There are not enough hours in a day to be able to make the most out of all the data available on a daily basis. If operators have the scale, interest and capability to hire a team of staff to do it all for them, then I would recommend doing so. If not, the best approach would be to find someone who can do this in a repeatable, reliable and consistent manner, on their behalf.
