ARMONK, N.Y. — IBM and SAP have released a retail solution that uses real-time data from inside and outside stores to help improve forecast accuracy.

IBM’s Metro Pulse uses the company’s cognitive services to provide hyperlocal insights on weather, events, traffic and demographics and helps address key industry challenges such as on-shelf availability and demand forecasting accuracy. During trials of this cognitive technology in more than 100 stores in multiple U.S. markets, the solution improved forecasting accuracy of volatile, hard-to-forecast products by 75%, according to the company.

For example, a New York City sales operation manager for a beverage company may try to forecast sales during the New York Marathon at one of her team’s stores along the running route. Using this new solution, she could incorporate information on traffic flows at different points along the route, as well as the effect of forecasted weather on demand. This allows her to predict with much greater accuracy the spikes in demand at a store level. Based on these insights, the sales operation manager can create tasks and suggested orders for sales representatives, who in turn can discuss with each individual store manager how to make the appropriate product adjustments expected to maximize incremental sales for both parties.

The solution uses near real-time data to improve planning and execution in the physical store. Unique data sources, such as IBM’s Metro Pulse, flow through SAP’s Cloud Platform to provide insights that can be acted upon almost immediately. These insights are fueled by live business, unique near real-time market-demand signals and a digital core that helps make the execution possible.

This is the first plan for an industry-focused solution resulting from the two companies’ digital transformation partnership announced last year. It is one of several industry-specific digital solutions in development. It also expands upon the investment IBM has made in retail and consumer packaged goods customers with SAP S/4HANA industry solutions. The two companies also intend to collaborate on SAP Model Company services, a prepackaged, ready-to-use, end-to-end reference solution that can be customized to meet specific line-of-business and industry needs to accelerate the time to value.

“SAP S/4HANA, coupled with access to rich, hyperlocal data understood and reasoned by IBM’s cognitive services, can provide consumer product and retail business users across the c-suite with the specific insights to gain a competitive advantage in major markets,” said Laurence Haziot, IBM global managing director and general manager of consumer industries.

IBM Global Business Services, Armonk, N.Y., aims to help organizations fundamentally redesign experiences to create new sources of value, digitally reinvent their operations for great efficiency and transform their enterprise through data.

Newton Square, Pa.-based SAP offers enterpise application software and services to enable more than 355,000 business and public sector customers to operate profitably, adapt continuously and grow sustainably.
 

Brought to you by Growth Energy.

When E15 fuel entered the market in 2010, it was approved for use in vehicles 2001 and newer. Now, seven years later, 2001 and newer vehicles represent about 90% of cars on the road. And along with this large market, has come a burst in popularity for the fuel.

Growth Energy performed a series of focus groups to study the feedback for this still relatively unknown product—two in Raleigh, N.C., two in Minneapolis and two in Denver. Vice President of Marketing Mike O’Brien points to three key reasons for the increase in E15 usage and popularity: higher octane, which can lead to enhanced engine performance; the environmental benefits, as it burns cleaner; and the lower cost, as E15 usually saves consumer up to 10 cents per gallon compared to unleaded.

Engine-performance benefits

O’Brien notes that purchasing fuel is something consumers don’t want to think about. “It’s something they have to do, something they’ve been buying forever that’s worked just fine,” he says. Growth Energy conducted consumer research to learn more about what would encourage consumers to care about E15, and one thing that came up repeatedly was the higher octane in E15. “Consumers liked the fact that it’s an 88 octane versus an 87 because they felt it enhanced their engine performances a little bit,” he says.

O’Brien says that consumers are interested in the fuel’s earth-friendliness, but there are other benefits to ethanol as well. It burns cleaner, which translates into better vehicle performance.

“They said, ‘Oh, it burns cleaner, so therefore it’s a little bit better for my engine because it keeps all the gunk out of the engine and helps keep things running cleaner,’” he says. The fuel is also a lower-cost option.
This key finding, that engine performance and earth-friendly properties of the E15 fuel were enmeshed when it came to consumer preference, was illuminating to O’Brien and the researchers.

Consumer perception

Increased consumer knowledge of the benefits of E15 is one of the biggest reasons that E15 has grown in popularity, largely in part because many consumers aren’t very familiar with the fuel’s benefits.

“We started testing what people thought before we told them about fuel and after we told them about the fuel,” O’Brien says.

Informing consumers has helped change the perception of it in a major way, though. Prior to receiving information about E15, O’Brien says that 57% of consumers surveyed said they’d prefer to purchase regular unleaded gas. However, once information about E15 was revealed, interest in the fuel jumped from about 15% of consumers to about 51%. “We’ve taken that messaging and adapted it into the field, and we’re starting to see some pretty good pickup response from consumers as a result,” O’Brien says.

Growth and expanded availability

E15’s popularity has come partly from education surrounding its benefits, but also from its expanded availability. In 2015, E15 was only sold at 105 sites. In 2016, that number had blown up to 626 sites; by the end of 2017, an expected 1,100 sites will offer it, and by the end of 2018, it’s predicted that E15 will be offered at around 2,000 sites. It is currently available for purchase in 29 states.

As more consumers become aware of the benefits that E15 offers—for vehicle performance, the environment and their budget—and as availability becomes more convenient, demand and purchases will continue to rise.

Brought to you by PDQ Manufacturing.

While your convenience store is most likely already a fixture in town, a car wash further ingrains your site in the fabric of the community. Its success depends on the residents, so make sure you’re returning the love and maintaining an open dialogue. Here are two community engagement strategies to help you connect with your customers and your community.

Make a splash with a grand-opening event

Celebrate all the effort and planning that went into your car wash with a grand-opening event. This promotion will allow the community to join in the celebration. This not only applies to a new car wash, but also to a retrofit of equipment or just about any type of major site upgrade.

Leverage the grand opening leading up to the event by featuring a countdown on your facility. Either a digital display or large banner, the countdown will serve as a constant reminder to all who drive by about the all-new car wash. The countdown could also be part of your local media strategy should you choose to partner with a local outlet. Local radio and newspapers are cost-effective ways to reach potential customers. Both mediums can reinforce the countdown, offer on-air prizes and tease a grand prize.

A large draw could be a grand-prize raffle where one winner will receive free car washes for a year. A great way to create engagement leading up to your grand opening is by allowing individuals to enter online. Also, you should require all entrants to give you their email address so you can build your e-newsletter database and continue to share updates with them. Multiple entries can be earned by visiting the car wash in its first week of business. The grand-prize winner could be announced exactly one week after the grand-opening event.

Connect with your community

Are you involved with any nonprofits or community organizations in town? If so, start with those organizations as potential partners for a mutually beneficial relationship. One way to build relationships with these organizations is through a community “give back.”

Partner with a local charity or organization for a day and donate a fixed portion of the day’s total profit directly to the organization. This will generate positive publicity and will give a large group of people an incentive to promote your event. It’s a win-win for everyone involved. Try it out and gauge the response and its success. You may find yourself hosting a community give back once a week, once a month, or just a few times a year. This is an effective way to boost business and demonstrate commitment to the communities you serve, which can also be amplified through social media.

Today’s customers are very in tune with their social-media platforms, and a profile for your business offers a great way to engage digitally. In addition to engaging with the organizations that you’re supporting, you can serve digital ads to targeted audiences through social media. For example, feature a happy customer and their clean car on a Facebook ad targeted at people within a 10-mile radius of your location. When done effectively, social media can be a great way to establish your car wash as part of the community. And remember, not every post should be about your business. Take note of local happenings and engage with others in the community.

Once you begin to connect with your community, continue the conversation through a customer loyalty program. Look for more on that in our next article.

Do you have questions on how to increase your car-wash traffic? Feel free to reach out to us.
 

Brought to you by Ovention.

As foodservice continues to boom in the convenience-store industry, it’s crucial for retailers to consider new and innovative ways to branch out from their comfort zones. Not only do c-stores compete with other convenience locations, but they compete for share of stomach as well.

Plenty of operators are dedicated to offering food to their visitors, with more than 21% of overall industry sales in convenience stores coming from food and dispensed beverages, according to the NACS 2017 State of the Industry Report. And of these total foodservice sales, the largest chunk of sales (34%) comes from prepared sandwiches, according to Q1 Consulting LLC.

Retailers can capitalize on this growth by focusing on build-your-own options. Consumers in general are struck by desire for customization and often have specific preferences for their sandwich condiments (an easy way you can elevate fresh prepared sandwiches).

In fact, 45% of millennials are willing to try an item or a condiment featuring a new or interesting flavor at a convenience-store prepared-foods area, according to Technomic, and a third of consumers overall want to see more ethnic foods when they go out to eat. These three spicy ethnic sauces are gaining popularity, according to Technomic’s MenuMonitor, powered by Ignite:

• Harissa: up 20.5% on menus, a North African condiment made from hot chiles, coriander, cumin, garlic, caraway and olive oil.
• Sambal: up 13.3% on menus, a Southeast Asian condiment made from chilies, brown sugar, salt and other ingredients.
• Gochujang: up 128.6% on menus, a Korean sauce made with fermented soybeans, dried chilies, garlic and other seasonings.

Put these sauces to work by crafting these easy, ethnically inspired condiments to elevate your sandwich program:

Mayonnaise

Mix 2-4 tablespoons of spice per cup of mayonnaise. Spread on the bread before toasting the sandwich for ultimate flavor mingling.

*Pro tip: Serve extra mayo with signature sushi, in wraps or bowls.

Ketchup

Mix 2-4 tablespoons of spice per cup of ketchup. Serve on the side or as a spicy dipper for sliders.

*Pro tip: Repurpose these customized ketchups with spicy roller-grill items.

Vinaigrette

Whisk harissa, red-wine vinegar, tomato paste, olive oil, salt and pepper together; combine rice vinegar, sambal, Dijon mustard, and vegetable oil; or mix together gochujang, rice vinegar, soy sauce, sugar, olive oil, sesame oil and minced garlic. Drizzle on the cut side of sandwiches featuring crusty bread.

*Pro tip: Use these vinaigrettes in ethnic-inspired salads or as marinades for roasted meats to use in salads, wraps and bowls.

With so many consumers seeking made-to-order, toasted sandwiches at convenience locations, there’s only one oven that can promise both high quantity and ultimate freshness. The Ovention® Shuttle® is a two-in-one oven with high-volume conveyor capability. Save energy by choosing from its two distinct cooking modes, shuttle or conveyor, depending on your production needs. Its closed cavity and Precision Impingement® Technology allow you to deliver a variety of customized orders faster, without compromising taste or quality. See it in action at NACS this Oct. 17-20 at booth 5939 in the South Building. Or connect with Ovention on Facebook, Twitter, Instagram and LinkedIn.

NEW YORK and ALEXANDRIA, Va. — New York City has settled a lawsuit seeking to block the city’s efforts to enforce U.S. Food and Drug Administration (FDA) menu-labeling regulations before the May 7, 2018, compliance deadline.

In July, NACS and other retail and restaurant groups asked the U.S. District Court for the Southern District of New York to stop the city from levying fines against noncompliant retailers and restaurants starting Aug. 21. The settlement now ensures that menu-labeling enforcement will be delayed in New York City until the federal rules are ready.

“This settlement with New York City is a clear victory for common sense. States and cities cannot enforce menu-labeling rules until Food and Drug Administration rules are enforced. We’re pleased that New York City has agreed not to jump the gun,” said Lyle Beckwith, senior vice president of government affairs for Alexandria, Va.-based NACS.

“There are good reasons for everyone to wait: It is increasingly clear that the federal regulations have real problems that must be fixed before they go into effect,” Beckwith said. “A recent economic study confirmed that total costs for the industry under the rule will be more than triple the FDA estimate, reaching more than $300 million per year—and seven times the estimate for convenience stores. And no matter how much businesses spend to comply with the FDA’s rule, routine calorie-count variations would result in 93% of prepared foods being in violation of the rules. 

“NACS members and other businesses will need to comply with the federal and city rules once they properly take effect,” he continued. “NACS urges its members to become educated on those rules and work to come into compliance. NACS will continue to battle for common-sense changes to the federal regulations through the regulatory and legislative process, so that the rules ensure NACS members can provide nutrition information to their customers in a way that makes sense for everyone.”

James Calvin, president of the New York Association of Convenience Stores (NYACS), said, “We’re relieved that common sense prevailed here. The attempt to prematurely implement this rule was clearly a governmental overreach by the city of New York.”

HEATHROW, Fla. — Tropical storm Harvey is affecting gasoline prices far beyond Texas. In one of this summer’s largest week-over-week increases, the national average retail price for gasoline hit $2.37 on Aug. 28, a 4-cent-per-gallon (CPG) jump, according to AAA.

The price increase comes as Harvey—which hit Texas as a Category 4 hurricane but has since been downgraded to a tropical storm—has forced about 2.5 million barrels per day (bpd) or one-quarter of the Gulf Coast’s refining capacity offline, according to the Oil Price Information Service (OPIS). Eight refineries shut down in response to the hurricane, led by ExxonMobil’s 584,000-bpd refinery in Baytown, Texas. Other refineries are running at lower rates, and three facilities have been offline since shutting down in anticipation of the storm last week.

Jeanette Casselano, a spokesperson for AAA, said the extent of damage to refineries in the region is still unknown. “Despite the country’s overall oil and gasoline inventories being at or above five-year highs, until there is a clear picture of damage and an idea when refineries can return to full operational status, gas prices will continue to increase,” she said.

As of Monday morning, the section of the Colonial Pipeline that brings gasoline from Houston to the mid-Atlantic region was still operating normally. Magellan Midstream Partners, however, had suspended refined product and oil shipments on its Houston-area pipelines area over the weekend.

The U.S. Environmental Protection Agency (EPA) waived local environmental regulations on gasoline for some Texas counties to help ease possible fuel shortages.

Texas’ retail gasoline average rose 4 CPG week over week, although this was not the greatest increase. Indiana led the nation in the largest weekly change, with an 11-CPG jump, followed by Ohio (9 CPG), Florida (7 CPG), Michigan (7 CPG), Illinois (6 CPG), Washington (6 CPG), Georgia (5 CPG), South Carolina (5 CPG) and Washington, D.C. (4 CPG).

Texas’ retail average as of Aug. 28 was $2.17 per gallon, placing it among the top 10 least expensive states, according to AAA. Pump prices in Houston rose 4 CPG week over week, thanks to heavy demand from residents filling up before the hurricane was set to hit. But in Corpus Christi, Harvey has eroded demand to the point that the local average was 1 CPG lower.

The lowest retail averages as of Aug. 28 were in South Carolina ($2.11), followed by Alabama, Arkansas and Mississippi, each at $2.12 per gallon. Hawaii had the highest retail average at $3.09 per gallon, followed by California at $2.99.

South Carolina may not have the lowest average for long, however. Tropical Storm Irma was poised to land along the Carolinas’ coasts at the beginning of this week, and it could potentially pressure wholesale and retail prices, AAA reported.
 

WASHINGTON — In a letter to the U.S. Food and Drug Administration (FDA), five U.S. senators called for a ban on menthol cigarettes, saying tobacco companies disproportionately target African Americans when promoting and marketing their products, according to the Associated Press.

Sen. Edward Markey, D-Mass., is leading the effort, saying in the letter that African Americans suffer the greatest burden of tobacco-related mortality of any ethnic or racial group in the United States.

Sent in mid-August, the letter to the FDA was signed by Sens. Elizabeth Warren, D-Mass.; Jack Reed and Sheldon Whitehouse, both Democrats from Rhode Island; and Richard Blumenthal, D-Conn.

Disagreeing with the ban, David Clement, North American affairs manager for the Consumer Choice Center, Arlington, Va., said such a law would only foster black markets and result in greater incarceration rates and less consumer choice and harm-reduction. “Sen. Markey’s call to ban menthol cigarettes is nothing but nanny state paternalism,” Clement said in a statement. “Rather than trying to enact heavy-handed legislation infringing on consumer choice, Sen. Markey should focus his efforts on promoting harm-reduction strategies, like vaping.”

In a public event on July 28, Dr. Scott Gottlieb, commissioner of the FDA, released a statement saying, among other things, that the agency would revisit the issue of flavored tobacco products, including menthol. Thomas Briant, executive director of NATO, Minneapolis, expressed confidence in the process that is in place. “In the new regulatory plan announced by FDA Commissioner Scott Gottlieb on July 28th, the FDA is planning to request comments from the public and the industry about potentially regulating flavored-tobacco products, including menthol, mint and wintergreen flavors. This means that the FDA is taking the appropriate course to first obtain public input and then determine whether any new regulations on flavored-tobacco products should be proposed.”

Bans on menthol-flavored tobacco products have made industry news this summer, with San Francisco and Minneapolis both passing new ordinances banning or restricting menthol sales.

BOSTON — GasBuddy unveiled Pay with GasBuddy, a new payment service that provides U.S. drivers with a discount off of virtually any gasoline purchase.

Pay with GasBuddy saves users 15 cents per gallon on their first purchase with the app. Every gallon of gas purchased afterwards will come with a minimum discount of 5 cents per gallon.

Users can connect the Pay with GasBuddy app to their checking account online. There is no credit application and it is free to enroll. Shortly after signup, users receive a GasBuddy payment card in the mail connected to the Pay with GasBuddy service and the user’s checking account. After the card is activated through the app, users can use the card at the gas pump as they would use any other plastic card.

“Not only will we help you find the best prices through our app,” the company says in a video introducing the service, “but you’ll save extra money on every gallon of gas at every station nationwide. You’ll never pay full price again.”

Customers who combine Pay with GasBuddy and the GasBuddy smartphone app could save up to $340 per year, the company said.

“Today, GasBuddy breaks new ground as a media company building its own proprietary, secure, federated payments network for the more than $315 billion spent on retail gasoline,” said Walt Doyle, CEO of GasBuddy. “The sheer scale and focus of our installed base of nearly 70 million drivers, combined with the value and convenience we’re delivering to the consumer, should make Pay with GasBuddy a very popular choice for U.S. motorists.”

Pay with GasBuddy is the first commercial product delivered from the partnership announced earlier this summer with WEX, a provider of corporate payment solutions. For the last year, GasBuddy has also been assembling management, technology, engineering and operations talent from companies including PayPal, Cumberland Farms SmartPay and Heartland Payment Systems. Together, they have developed and commercialized secure consumer payments technology for the retail gasoline market.

Boston-based GasBuddy is a smartphone app that allows drivers to rate their convenience-store and gas-station experiences. With nearly 70 million downloads, GasBuddy is the leader in crowdsourced information to help drivers find the best gas prices, closest stations, friendliest service, cleanest restrooms, tastiest coffee and more in the United States, Canada and Australia.

CAMARILLO, Calif. — The Aug. 25 U.S. average retail price of regular-grade gasoline is $2.3921 per gallon. Two weeks ago, it was $2.3971, so it fell half of one penny, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.

Also since Aug. 11, the weighted (all-classes) wholesale price rose 5.10 cents per gallon (CPG), mostly in the past couple of days, costing retailers 5.65 cents in margin. Margin on Aug. 25 sits at a narrow 11.38 CPG for regular grade, the lowest in a whole year; it was 10.34 CPG on Aug. 19, 2016.

Not limited to areas hit by Tropical Storm Harvey, wholesale-price hikes were all around the country, including the West Coast.

In Houston, the average retail price of regular-grade gasoline is $2.1035 per gallon, down 1.86 cents since Aug. 11. The weighted wholesale price is up 3.81 cents over the two weeks, putting the Aug. 25 margin at a pitiful 4.05 CPG. Clearly, there’s pressure to get well via a street-price hike, if wholesale prices do not quickly retreat.

But in Houston and elsewhere, there is also a fear of price-gouging accusations, as petroleum retailers may avoid or delay hiking price, even straightforward pass-throughs of wholesale-buying price hikes. History has shown that for some, a way to avoid being called “unconscionable” by officials is to put a “closed” sign on the door and pumps. It may not be easy to recover lost margin quickly under such conditions.

Among markets where prices increased during the two weeks, Seattle and Portland, Ore., stand out with the biggest hikes, both a dime. Margins in both of them on Aug. 25 sit more favorably than elsewhere at about 30 CPG.

Fortunately, most of the country’s refining capacity remains up and running. Gasoline stocks and output are comfortable, enough to more than satisfy demand. A dramatic gasoline-price spike so far seems unlikely to occur. Demand destruction is taking place in hardest-hit areas, enhancing the supply balance. If imbalance should ensue, volumes of exports can stay home instead, to satisfy domestic demand. The same goes for crude oil.

Crude-oil prices have exhibited just modest changes in this period, as they have during most of the past two years. If they do not jump or crash soon, and if damage from Harvey does not become far more severe, then short term, the U.S. average pump price is more likely to stand pat or drop a little than to rise, even with a bit of retail-margin recovery built in.

Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries. Click here for previous Lundberg Survey reports in CSP Daily News.

SAUKVILLE, Wis. — Mad Max Convenience Stores has sold nine convenience stores and gas stations in southeastern Wisconsin to Yesway, CSP Daily News has learned.

These are Yesway’s first locations in Wisconsin. The West Des Moines, Iowa-based company also operates more than 70 stores in Iowa, Kansas and Texas.

Mad Max Convenience Stores CEO Janiece Maxwell told CSP Daily News that Yesway’s parent company, Beverly, Mass.-based Brookwood Financial Partners LLC, approached the company in January about a sale.

Maxwell’s husband, Steve Magestro, opened his first gas station in 2000. They built their first Mad Max location in Sheboygan, Wis., in 2006. The company grew to 11 c-stores, and it purchased O’Connor Oil in December 2014, adding a fuel-hauling transport division and wholesale gas jobbership to the company.

The Saukville, Wis.-based company sold two of its 11 c-stores to other buyers, it said.

Watch for details in CSP Daily News.