Loyalty and Digital Offers

in the

C-Store Environment:

Linda Toth

Conexxus Director of Standards

NACS / Conexxus • Convenience & Retail Fueling

• Not for Profit

• Trade Associations

• Conexxus = Technology Arm of NACS

– Educate

– Advocate

– Create Standards

2

U.S. Convenience Stores • 154,195 Stores

• 575 B Annually in Sales

• 160 Million transactions a day, every day

(US population = 321 Million)

• 80 % sell motor fuel

• 63% are single-store operators

3 Source: Nielsen TDLinx , NACS State of the Industry Survey of 2015 Data & CSX, LLC

U.S. Convenience Stores • 575B Annual in Sales

– 225 B (inside products) up 6%

– 349 B (fuel)

• Inside Sales (Sales, GP$) – Tobacco (37%, 19%)

– Beer* (12%, 8%)

– Pack Bev (15%, 20%)

– Center Store (10%, 14%)

4

*For those stores selling beer Source: Nielsen TDLinx , NACS State of the Industry Survey of 2015 Data & CSX, LLC

U.S. Channel Count Comparison

5

Source: NACS Nielsen TDLinx , NACS State of the Industry Survey of 2015 Data & CSX, LLC

C-Stores struggle with paper coupons

6

≠

C-Stores = Promotions

7

+ =

Cash

C-Stores = Loyalty Programs

8

The Consumer is Changing…

9

• Time starved

• Mobile

• Always connected

• Knowledge on demand

• Seeking simplicity in complex world

Personalized Relevant Offers

Increase Sales

10

Source: Accenture Personalization Survey Source: Medallion Retail

46% of shoppers said they will

buy more from a retailer that personalizes the shopping

experience

57% of consumers want real-time promotions/offers

Digital Offers/Marketing & Mobile

11

Paper Equivalent

12

• Early generation of

“Digital Coupon”

• Cool new platform!

• But really – Just paper in

disguise

Remember: C-Stores struggle with paper coupons

Digital Offer Life Cycle

13

Issuance

Redemption

Validation

Settlement

Validation to

Limit Fraud

14

Digital Offers Ecosystem

15

CPG Marketing

Mobile Payment

Processing Application

(MPPA)

Broker/

Aggregator

Loyalty

Host (LFEP)

Acquirer/

Payment Host (PFEP)

Site Level

Above-Site Above-Site

Site Level

Mobile Applications

16

• Early Win to Combine:

• Payment Wallet

• Loyalty

• Digital & Targeted

Marketing

Browser Benefits

17

Car Wash Code Use Case

18

Consumer purchases a

car wash code (for use

now or in the future)

using his mobile device.

Car Wash Code Sequence Flow

19

Car Wash Code Sequence Flow (cont.)

20

Car Wash Code Sequence Flow (cont.)

21

Indoor Use Case

22

Consumer enters store and

purchases goods/services

and/or pre-pays for fuel all

through his mobile phone.

Indoor Sequence Flow

23

1. User initiates Mobile [Application] selecting payment/loyalty.

2. Identify user location.

3. Optionally, MPPA prompts for fleet data.

4. Loyalty Processing

• MPPA LFEP (above site) OR

• Site System LFEP (site level)

• Interaction with user for optional rewards

5. Payment Authorization

• MPPA PFEP (above site) OR

• Site System PFEP (site level)

Indoor Sequence Flow (continued)

24

6. Consumer Fuels

7. Additional Loyalty Processing with LFEP (post fueling

and/or product/transaction based)

8. Complete Payment Processing with PFEP

9. Complete Mobile Transaction (MPPA Site System)

10. Receipt Processing at Site System

• Print At Site System (optional)

• Send to MPPA for use on Mobile [Application]

Identify/Verify User Location

25

Conexxus Standards use:

• Single Transaction Authorization Code (STAC)

• Generated either by:

• MPPA

• Site System

• Format examples:

• QR Code (scanning)

• Numeric code (PIN pad or mobile device)

• Depending on format and origination, Mobile [Application]

may need to determine site location to include in the STAC.

Identify User Location

Option 1 – MPA Requests STAC

26

Identify User Location

Option 2 – Site System Generates STAC

27

Outdoor Use Case

28

Consumer pays for fuel

through her mobile

phone (without going in-

store).

Outdoor Sequence Flow

29

1. User initiates Mobile [Application] selecting payment/loyalty.

2. Mobile [Application] determines fueling position

3. Optionally MPPA prompts for fleet data

4. Reserve Pump: MPPA Site System

5. Loyalty Processing

• MPPA LFEP (above site) OR

• Site System LFEP (site level)

• Interaction with user for optional rewards

Outdoor Sequence Flow (continued)

30

6. Payment Authorization

• MPPA PFEP (above site) OR

• Site System PFEP (site level)

7. Optionally, validate the user is where they think they are

(may occur either before or after payment auth)

8. Price may be adjusted before fueling

9. Optionally, consumer receives message on mobile device to

begin fueling.

10. Consumer fuels.

Outdoor Sequence Flow (continued)

31

11. Additional Loyalty Processing (post fueling and/or

product/transaction based)

12. Complete Payment Processing

13. Complete Mobile Transaction (MPPA Site System)

14. Receipt Processing at Site System

• Print At Site System (optional)

• Send to Application via MPPA

Validation of User Location

32

Conexxus Standards use:

• Validation code (numeric)

• Verified by:

1. Site System

2. MPPA

Validation of

User

Location

33

Receipts

34

• Conexxus standards: Site System is responsible for receipts. For above site, the MPPA must provide the

host portion of the receipt lines. • Different countries have different

receipt requirements.

ISO 20022

35

Reporting (only) of loyalty/discounts proposed to TG1; extension of repeatable sale items to include: • Item id • product code • additional product code info • original (amount, unit price) • adjusted (amount, unit price) • UOM • quantity

• repeatable price adjustments o program id o promotion reason o amount o unit price o quantity

Success in a C-Store Environment

Increase Revenue

• Easy Acceptance

• Application or Browser

Decrease Expenses

• Life Cycle Management

• Limit Fraud

• Reduce handling fees

36

37

Linda Toth ltoth@conexxus.org Website: www.conexxus.org

Conexxus LinkedIn Group: Conexxus Online