The convenience retail sector has seen quite a bit of innovation in loyalty program design.
Loyalty Technology

Executive Interview from NACS: The PDI Marketing Cloud in Focus

Image by Sambeet D from Pixabay

With the retail industry as our editorial focus during November, we thought it was important to cover a sector that represents one of the most vibrant growth markets for customer loyalty today. The convenience and fuel retail sector has seen an acceleration in loyalty program penetration over the past 5 years and is a true showcase for innovation in loyalty program design, mobile apps, mobile wallets, and offer delivery.

To provide you some background, the convenience retail industry slumbered along for decades in terms of customer marketing, never fully tackling the challenge of “knowing your customer” and competing mostly on a steady rotation of discounts and promotions. Beyond stopping for the necessity of a fuel fill-up, there was little practical reason to go inside the store, except to pick up your “cokes and smokes” before moving on with your day.

Stopping for Gas is fun?

Today’s leading convenience retailers offer an in-store experience that has been wholly transformed. Walk into a flagship store operated by one of the “big-oil” companies (BP, Chevron, Exxon Mobil, Phillips 66, Shell, Valero, etc.) or one of the leading convenience chains (7-Eleven, Circle K, Casey’s, Cumberland Farms, QuikTrip, Racetrack, Sheetz, Wawa, etc.) and you will find a welcoming environment where you don’t mind sitting down with your beverage of choice, ordering some lunch, tapping into Wi-Fi, and catching up with a friend.

According to the National Association of Convenience Stores (NACS), there are more than 150,000 convenience store locations in the U.S. today, with almost 70 percent of those represented by single-store operators. The top 50 convenience chains in the U.S. account for nearly 60,000 locations and 66 percent of these top 50 chains have a loyalty program in operation today. The penetration of loyalty programs across the top 25 chains is higher, with 84 percent of this group operating a program.

But the narrative around customer loyalty in convenience retail is not simply about adoption, it is also about the diversity of operating models that are in use today. A study of the program formats across this top 50 group reveals structural centricity across all of these options; gift card platforms, surprise and delight, point currency, points like cash redeemable at point-of-sale, ACH payment programs with fuel discounts, CPG-funded offers, and location-based offers. There are also programs that leverage popular made-to-order food offerings, eschewing points and cash back offers altogether.

Diversity is the name of the game

It is refreshing to see that, in spite of the growth in program launches over recent years, there is no consensus “go-to” model for customer loyalty in the industry. This is consistent with a tenet of Loyalty Truth™, that every brand has unique attributes that, if documented and explored, can provide inspiration for a loyalty program offer that is differentiating and difficult to replicate by competitors.

Enabling the growth in customer loyalty across this industry are a handful of loyalty service providers that dominate the market for loyalty technology and related services. PDI is one of this small group and during the most recent NACS show during October 2019, Wise Marketer had the opportunity to sit down with Brandon Logsdon, President of Marketing Cloud Solutions at PDI and Jimmy Frangis, CEO of PDI. The conversation was wide ranging and highlighted recent announcements from the Atlanta-based company.

If you are not familiar with PDI, the company has over 1,500 customers in more than 200,000 locations worldwide. PDI has its roots in “back office technology”, meaning that it provides the software platform with all the capabilities needed to operate the business. Mr. Frangis explained, “PDI’s ERP Solutions unify and optimize retail inventory, workforce, and food service management. It also manages logistics, fuel pricing, accounting, and delivers marketing solutions to increase volume, margin, and customer loyalty. This means our customers have the flexibility to control every aspect of their operations.”

Through its 2018 acquisition of Excentus, PDI owns and operates the Fuel Rewards® loyalty program that is the hallmark of the Shell fuel brand in the U.S. and is consistently ranked as a top-performing fuel savings program and by consumers as their preferred loyalty currency. PDI followed this acquisition with the purchase of Outsite Networks in late 2018, further consolidating and strengthening its market position in c-store customer loyalty.

Earlier this year, PDI announced the launch of PDI Marketing Cloud Solutions. With this announcement and the acquisitions mentioned in mind, we probed these two executives about the nature of the company’s product development plans..

Mr. Logsdon explained, “Convenience retailers face continual challenges connecting, analyzing,and managing customer data across their operations, making it difficult to gain insights into their customers’ behaviors and deploy an optimal marketing and loyalty solution … the PDI Marketing Cloud brings multiple loyalty marketing technology needs into a unified solution and provides the tools retailers need to deliver personalized offers and messages.” Mr. Frangis added that new features in the latest version of the PDI Marketing Cloud included “mobile payment integration with loyalty, enhanced personalization, and targeting and advanced analytics.”

During NACS, PDI also announced the launch of its Offer Network. According to Mr. Logsdon, this new national-offers network “provides both retailers and CPG brands unprecedented shopper and product insights, together with quality customer and store-level data.” He added, “the Offer Network covers over 30,000 locations in the U.S., providing promotional and analytical tools previously not available to retailers or accessible to CPGs, making the PDI Offer Network unique in the industry.”

Mr. Logsdon also talked about the recent acquisition of CStorePro, an organization providing technology to over 2,500 retail locations, mostly single-store operators. The CStorePro platform makes available mobile and cloud-based tools that were not previously available to single store retailers. The solution enables owners to easily monitor and manage their pricebook and store operations from anywhere, which translates into better control of daily operations. The solution provides the smaller operator the chance to become more competitive in the midst of a consolidating industry.

PDI has a rich heritage of solving industry challenges and reimagining what’s possible. Since building one of the first back-office solutions specifically designed for convenience retailers in the 1980s, PDI has continued to push the industry forward.

From our interview, it was clear that PDI is taking on the challenge of digital transformation for the c-store industry. By unifying its technology platform and making it easy for customers to access aggregated data and build smarter, cloud-enabled solutions, PDI is creating a more powerful platform to support the continued transformation of this industry as it becomes more sophisticated in its customer marketing efforts.

Executive Interview from NACS: The PDI Marketing Cloud in Focus
To Top

Join our mailing list for the latest customer loyalty news, research and updates.