When rolling out facial recognition payment systems in its stores in Guangdong, southern China, 7-Eleven discovered a problem: if someone completing a transaction bent over to get something out of their carry bag, the customer standing behind could end up paying the bill.
Danni Peirce, CEO at DFI Retail Group’s 7-Eleven business, whose remit includes stores across Guangdong, told delegates at the recent NRF Apac convention in Singapore the problem was resolved by switching from facial recognition to palm recognition. Since September, contactless palm payment has been introduced in partnership with WeChat into 1700 stores already: the customer just raises their hand in front of a scanner and they’re good to go. No more unexpected grocery bills for customers waiting in line.
The introduction of facial recognition and its somewhat rapid replacement by plam scanning reflects what Peirce describes as a high degree of digital savviness in Mainland China, where a whole ecosystem has grown to support the retail and payments businesses. While most convenience stores across Asia are somewhat cash-driven, China now has 95 per cent e-wallet penetration.
The cautionary tale also illustrates the nimble approach of 7-Eleven management and a willingness to test new concepts at scale.
Heading up DFI Retail Group’s 7-Eleven business, Peirce oversees some 3600 stores spread across Singapore, Hong Kong, Macau and Guangdong.
“We’re going through a big journey at 7-Eleven,” she explained. “We are transitioning from a traditional convenience store, very heavily offline, selling what you would imagine a traditional convenience store, sells to customers.” (Think snacks, beverages and tobacco.) “Now very much we are pivoting to food on the go – in the smallest possible space – to offer maximum convenience for customers,” she added.
With IGD data predicting convenience stores as the retail format forecast to grow the fastest in coming years, Peirce relished the chance to take the helm of the 7-Eleven business for DFI Retail.
She knows it is not just about retuning existing convenience store models, however, with supermarkets and other formats cottoning on to the potential of smaller format stores.
“We see supermarkets moving into smaller formats and at the same time, we’ve got some convenience stores experimenting with larger formats. In the markets we operate, our average store size is about 500sqft, but some of our stores go down to as low as 100sqft or less, so the proposition is very different and I don’t think a supermarket is ever going to go that small.”
With a growing trend towards on-the-go convenience food across Asia, DFI Retail is focused on the category and how it can develop an experience different to its rivals “in the smallest possible space to offer maximum convenience for customers”.
“The way that customers are consuming is different and that unlocks different opportunities for all of us,” she said.
“If you ask customers what’s most important to them, they’ll tell us, ‘It’s about helping me find what I’m looking for and helping me get in and out as fast as I can’.”
In focus groups, she related, customers will boast about how few seconds it takes them to get in and out of a 7-Eleven “which is great for them, less great for us.
“But that’s what’s important to them and that’s what we’ve got to make sure that we’re meeting.”
Fundamental to any retailer is its product assortment in stores. In the past, a retailer might have taken a clustered approach, where the product range was set by classes of stores, related to size or location. Now, says Peirce, scalable technology is emerging that allows planograms specific to individual stores, something she considers has exciting potential for the group.
“That’s the next journey we will be going on. I don’t have all the answers yet on how we get there, but I think that is such a game changer, particularly for smaller formats, as we look forward.”
At DFI, one of the biggest successes Peirce highlights over the past few years is the launch of Yuu, its multibrand rewards program. Launched in Hong Kong in 2020 during the pandemic, it expanded into Singapore last year. DFI Group brands including 7-Eleven, Guardian, Mannings, and Ikea are joined by Pizza Hut and KFC to form the broader family.
“Typically we’ve operated separately, but for the first time we came together to bring something really powerful to our customers,” Peirce explained. The challenge of launching the program was how to get Hongkongers to download the app – in a market where ‘selling’ apps is notoriously difficult.
The launch used a high-profile ad campaign with a catchy ‘earworm’ tune, which also played in every one of the group’s stores for six months. Celebrities were engaged in catchy advertising and DFI Retail set out to “paint Hong Kong blue”, the program’s brand colour.
It worked. Within days of the campaign launching, 1 million of Hong Kong’s 7.5 million population had installed the app on their phone and today, 70 per cent of the country’s adult population are enrolled.
Peirce says the sheer volume of data collected from the program has proven invaluable, but it was never the objective. Rather, she explained, the goal was more about engaging with customers, building a brand that goes beyond a loyalty program. Last year in a YouGov survey Yuu Rewards was voted the third most-loved brand in Hong Kong behind YouTube and Google.
“So, we got there. But now, obviously, we have the most amazing first-party data which has become the basis now for us being able to tailor our range and leverage the data to do personalisation, and then ultimately, to move into retail media as well,” she said.
Over the four years since launch, the way the program is managed has evolved from a standalone separate team with its own culture and leadership. “The reason it worked is because it was driven from the top and there was ownership across the business and that was the right thing to do. Fast forward four years, it has been integrated back into the businesses again. Now it is about how we create skills within the business to be able to use the data and all of the great insights that we have coming out of Yuu Rewards.”
Peirce concluded by explaining how retailers need to have “hyperawareness” when it comes to trends, data and insights into their customers.
“Knowing your customer now means something different to knowing your customer in the past, because we have such different competitors from the past, and many digital competitors, and obviously they know their customers in a very different way to a more traditional offline business. For us, it’s an amazing advantage as an offline business moving into online because we have such strength offline and we’ve got such amazing customer data. If we can combine that with our digital and online data, that becomes unbelievably powerful,” Peirce continued.
“Obviously, for our teams, that’s a different way of thinking, so building that hyper awareness into our culture is a different way of operating for us.”
The post From face to palm: 7-Eleven CEO talks technology journey appeared first on Inside Retail Australia.
