Hi everyone, I hope that you're all well and staying safe. Welcome to our how fuel retailers demand capture episode. We're here to talk about how fuel retailers can accelerate their success as the pandemic forces a new normal, and the role that customer centric strategies have to play. I'm Kirk Wilson and I'll be leading the discussion today here from London, and I'm joined by my colleagues Masoud Haque, Senior Vice President, Energy at Epsilon, and Karl Modafari, Senior Vice President at Epsilon. So thank you everyone for joining us. You can type your questions into the Q&A box at the bottom of the screen. And if we can't get to your question today, obviously we'll try to follow up with you afterwards. So the COVID-19 pandemic has left no industry unaffected, but for fuel retailers, the disruption caused by the pandemic has been especially acute. So Masoud, I'll start with you. Why are fuel retailers especially impacted right now?
Yeah, thank you, Kirk. You know, while this is very painful and, you know, for the industry, it's a negative outlook, it is also an opportunity for the industry, because as Karl mentioned, the consumers are behaving differently. And if you think about the consumer behavior in terms of, you know, worrying about their safety, their health, et cetera, and the companies, the fuel companies thinking about their revenue, their profit, and in some cases their dividend, the question becomes, how do you bridge that gap, right? And the way to, you know, take advantage of this situation is to be able to bridge that gap, which is where the opportunity lies, and to be able to satisfy the consumer concerns, needs, and worries such that those then result in, you know, a higher demand capture, which will then show up in the revenue and profits, right? So bridging that gap by personalizing to the consumer needs and worries is the key here.
Okay, brilliant. And Karl, probably time to trick this one over to you. Masoud mentioned personalization there. From your experience at Epsilon, how does personalization help?
You know, we've been talking personalization for years, and I think everybody gets the concept and the value prop of being customer-centric at the 50,000-foot level. I think for us, this pandemic, this crisis has allowed everybody to see personalization in a new way, as a way to bridge the gap between the company and a consumer's needs. Obviously, to get there, you know, it's a little trickier. Consumer requirements are evolving at a more granular level. So we're not just talking about a region-by-region or city-by-city adjustment. Every individual has been impacted by this in different ways. Are you able to stay home? Are you an essential worker? Are you sending your kids back to school or choosing not to? That doesn't happen regionally. That happens in an individual or household level. So you've really got to understand the behavior of, you know, the profiles of the consumer that the company can identify so that you can get those trends, create those personalized messages that go hand-in-hand with the products and services that an organization offers. So, you know, we mentioned safety being important. All retailers have had to rethink their offers to satisfy customer safety requirements, and fuels is no exception. But how do you get that to your consumers? You advertise that you've got contactless payment available. Do you keep your consumers updated about their safety measures and, you know, through text messages or email? That is what we partner with a lot of our clients to help them build that capability. We've been doing that for years, and what we've done recently is sort of gone from this concept of building a marketing engine to building a marketing flywheel. So, you know, the flywheel is that part of the engine that allows you to shift gears quickly as you need to. And that is really what's needed in an environment like this is the status changes as your consumer needs change, as your business needs change. You've got to be able to shift quickly, and that's really where we're aiming, you know, our clients. So as you start to get that knowledge of the customer, as you think beyond your core products, you can seize other opportunities when you have a flywheel-type thinking. You know, traditionally, fuel retailers have attracted customers by offering discounts other than new services. But now you can look at, you know, can the convenience store attached, you know, deliver groceries to somebody at their home or when they're there fueling up? You know, obviously, data is the key to all of this. So understanding whether your consumers are interested in stocking their pantry or filling their tank or doing it together, that is really what marketers and business owners need to understand. We're really getting outside the mindset of trying to get a share of wallet of a consumer and think more about getting a share of life.
Yeah, that share of life piece is very powerful. It goes without saying that for that level of personalization, you need data, as you mentioned. And as our data expert, what are some of the data approaches fuel retailers should be thinking about right now?
You know, in the fuel industry, as in other verticals, there's different levels of maturity, but everybody's got at least some investment in first-party data. Whether you're taking your point-of-sale data and centralizing that in a database, or if you've got a loyalty solution that ties those transactions and builds that in or just an e-mail platform or, you know, marketing lists. Most people have that first-party data. What's important also in this space is understanding what you can see about your consumer outside of your brand experience. So, you know, and typically this has been in the form of demographic data or panel data or surveys. Now what's available is the ability to connect and see what your consumers are doing online. How are they behaving? What are their attitudes and sentiments? And to get that, what most people are using to connect with is a cookie-based identity. And, you know, obviously that works. That out of the gate gave people a connection to their consumers that they didn't have before. But without a persistence and ability to keep that over time, you don't have that longitudinal connection. And that's lost. So, you know, you really need something that's persistent when bridging that offline and online. And it's really important to unlocking those data profiles and understanding the consumer base. So while traditionally cookies have been used, I think modern technologies are far more robust. For example, we at Epsilon have, you know, built a platform we call PeopleCloud. And it really allows us to connect at levels that, you know, conservatively in this space we've seen 55, 60, 70 percent matching at a conservative level, going all the way up to 80s and 90 percent for other retailers where there's a strong e-commerce connection. And that accuracy is really critical in tying that data together, bringing it together in a central decisioning hub that you can then build as the machine keeps moving forward. In the U.S., we've built this out for about 200 million consumers. And, you know, we've got that in Western Europe and in Canada and other locations that are, you know, obviously GDPR compliant because privacy is obviously critical in this internal discussion as well.
So Masoud, we've spoken a bit there about data and about personalization. What are the other elements that need to come into play once you have your data?
Yeah, absolutely. So let me build on two terms that Carl introduced. He talked about the flywheel and he talked about the share of life. So when you think about bridging this gap to the consumer and their needs, the things that you have to think about are not just the communication, right? So one part of it is understanding the consumer through the data that's visible or can be visible to the fuel retailers. Second is the communication. But beyond that, you also have to think about the holistic experience. And that's the online and offline experience. So online experience could be, you know, can I do a contactless payment? Can I do e-commerce with the attached convenience store such that, you know, I'm prepaying and I know what's in stock and what I want to buy. And then the physical part of it could be, you know, a full service pump. It could be a, you know, having sanitizers at the pump if it's self-service. It could be, you know, delivering the goods from the convenience store into the trunk of the car while you're at the pump. Or it could be even delivery to the home. So you have to think about all of those experience pieces holistically. And then inside the company, you also have to think about how the supply chain is affecting the experience, right? So making sure that, you know, it's not just a fuel supply chain, but as the consumer sentiment is changing and they're thinking about, you know, at the convenience store, they might be thinking about not just cigarettes and beer, but how do I stock up my pantry with, you know, with bulk purchases? And are those products, you know, which might be, you know, cereal and, you know, other food products, you know, are they available at the convenience store? And so you're stocking it and thinking about the supply chain as well, right? So at the end of the day, it's about thinking about the consumer experience holistically. It's not just the communication and not just the digital experience, but the overall experience, you know, end to end. And what the fuel retailer has to do to meet those requirements.
Okay. And I mean, innovation of that kind is or has been unusual to the industry, which hasn't sort of seen the level of disruption we're facing now. What do you think they need to learn to suit?
Yeah, so this is where it gets very interesting because history is no longer a guide to the future, right? So previously, a lot of these companies used to do demand forecast based on whatYou can then start to think about two things. One, how do I evolve my offers? Are the offers I have out in the market working? Like, for example, I've seen some fuelers who, in addition to putting out hand sanitizers, they put out rubber gloves, and it's a very expensive thing to do, and nobody used it. So how would you make sure that you don't spend that kind of money without actually some validation from data, as an example? And then part two of it is thinking about this communication and the digital experience, meaning once you have decided what those offers are, how do I now bring it to life? How do I start incrementally executing to that and having a plan for that and start building it?
Okay, brilliant. So, Karl, I'll take this one to you. What are some ideas for an approach to data that will deliver rapid results?
That's a good question. Something we're doing a lot right now in relation to this, not just for retail, but actually in hospitality, theme parks, et cetera, there's this concept of canary data. So how can I understand what are my consumers' behaviors? Where are they in terms of their position to this pandemic? So looking at things like sentiment in social media, geolocation data on mobile devices, doing an analysis to understand are people staying home? Are they only traveling between home and essential jobs? Have they started to go out to restaurants and parks and those types of things? Gives you a sense of when it's time to start taking the right offers to consumers. So that can have a big impact. Now, obviously, when we talk about that type of data, something we haven't spent a lot of time on here but is really, really important is understanding how that data can be used. And while data can be used, should be used, those types of decisions are things that are not just data scientists but are legal experts and those types of things help us make sure that vertical by vertical we're aligning this data in ways that make sense and more importantly, respect and protect the consumer's privacy relative to it.
Okay, and we'll just take the last one here because I'm a little bit crunched for time. Masood, and I think this is one for you, how much appetite do you think there is in the industry for this level of change?
You know, the question about appetite implies there's a choice, and the way I see it is it's not so much a choice. All of us in the world have been thrown into this pandemic and the current situation, and we need to figure out how to navigate this. So the real question isn't should I choose to navigate this or not? The question is how? And at the end of the day, the starting point is what you have and the focus is the consumer and their worries because if you address that with your starting point, then the revenue and the profits will follow. So I think the idea isn't that you need to do a big, huge project and spend a lot of money. The idea is change the mindset, start with what you have, and then incrementally build towards where the consumers are evolving and follow that.
Okay, that sounds like good advice. And just before we wrap up, let me ask each of you, what is the number one thing that fuel retailers should take away from this conversation that will help them capture demand? Masoud, should we start with you again?
Yeah, sure. Thanks, Kirk. So the main takeaway for me is the data, right? And historically, we've seen a lot of fuel companies, they think about consumer data to mean their name and contact information. But what we're really talking about is quite a bit beyond that, which is what are their day-to-day behaviors, where are they shopping, where are they going, what are they watching, what websites they're visiting, what are they searching for, what are they posting on social media, and getting that full view. And that view is going to change day-to-day, week-to-week, and month-to-month. So keeping up with it is going to be key. What I've seen a lot of fuel companies structurally have internally is they have somebody who's responsible for the technology, which is IT, somebody responsible for the communication, which is usually the marketing department, and then somebody who's responsible for the digital experience and probably somebody for the physical experience at the pump and the convenience store. And what falls through the cracks in that kind of a structure is this idea of data as an asset. And having somebody owning that data and making sure that you're collecting and curating and sourcing all of that data, you have the right algorithms to do the matching, and then leveraging that data across all of these different functions, that's going to be key. And then using it also to, as I mentioned earlier, to continually innovate. And over time, hopefully you've then built a flywheel that keeps the engine running over time. And as you're addressing those consumers, you're also addressing a share of their life, not just the share of their wallet of the pump.
Okay. And Carl, your one key takeaway?
Yeah, I think data is obviously critical, and because Masood has spent some good time on that, what I would go to next is identity, that connective tissue that stitches the data together, that joins your third-party data to your first-party data, that allows you to take your first-party data and the profiles you've built and reach them in media or drive decisions on them from a personalization perspective. I think that is what's critical. Everybody knows data, more data, better data is important, but how that ties together is at the identity layer. And for us, as I mentioned earlier, this is the DNA of Epsilon. We've done this forever in the traditional offline identity, the name address, phone numbers, emails, account numbers, and then now more recently in the media side, taking beyond third-party and building our own media network that helps us build an identity layer that is 50%, 60% on its worst day relative to what you've seen in a lot of media companies taking a 3% or 5% match rate and being happy with that. And that's really just scattershooting with your media budgets. And when you take this to the type of identity that we're talking about, it's easy to see how that can give you a strong competitive advantage in a crisis situation like this or not. So I think identity is where I would go next in terms of priorities.
Okay, fantastic. Well, we're out of time at the minute, so I'd just like to thank you, Masoud, and thank you, Carl, for sharing your perspectives in the conversation today. For those of you who still have questions that we weren't able to get to in the Q&A, please feel free to reach out to us directly to continue the conversation. Thank you for joining us in this edition of Demand Capture, the webinar, and have a great day.