50 Innovators of the Year 2022
In today’s times it is nearly impossible to have a business conversation without “data” being a focus. Data has gone from being a supporting actor to a lead in most operational processes and business decisions. The Consumer Packaged Goods industry, a pioneer in data acquisition, utilization and analysis for nearly three-quarters of a century, seemed to have every data point throughout the supply and demand chains needed to drive operational excellence and inform the most forward thinking strategies – with one glaring exception, the mom & pop corner store. The vast majority of independently owned small format convenience stores, bodegas, and liquor stores still run their businesses with a manual cash register which creates a “blind spot” for brands to effectively sell, distribute and market their products to.
Enter National Retail Solutions (NRS). Founded in 2015, NRS designed an affordable, easy to use, fully supported POS system for the independent retailer. And since its launch NRS has sold nearly 20,000 units to over 17,000 individual outlets – enabling efficiency and growth for the merchants but also now providing a lense into product performance and trends in this important and growing retail sector for the CPG brands and adjacent companies who care about brand and retail performance.
National Retail Solutions’ technology allows for granular data aggregation to empower both independent, small chain convenience and CPG brands with in-depth analysis to increase profitability and market opportunities. The POS terminal, which is integrated with an Advertising digital display, allows advertisers to reach retailers’ customer bases. At the same time, CPG suppliers can work with NRS to uncover new market opportunities, as well as leverage the NRS platform to provide promotions, coupons , and special offers to independent retailers.
In a conversation with Elie Y. Katz, President & CEO and Suzy Silliman, SVP Data Strategy and Sales of National Retail Solutions, we learned about the scope of data collection performed by NRS’ POS system and what that data can do for all levels of the retail sector. They explain the benefits of NRS’ technology for CPG brands and retailers alike, as well as the unique advantages for new market operations.
Q. What is the NRS business model, and who benefits from it?
Our primary mission is to help small, independent business owners nationwide thrive in this competitive corporate landscape. Part of achieving that is offering merchants the lowest cost of ownership of a fully integrated, fully hosted Point-of-Sale solution. The small businesses we work with include convenience stores, gas station stores, bodegas, smaller supermarkets, and delis, and we host Point-of-Sale systems on behalf of those retailers. In doing so, we are hosting and capturing data at its most granular level in real-time, which is designed to benefit three main entities: the retailers, the brands, and the consumers.
Q. What kind of data can NRS collect when a consumer checks out through the POS system?
We host and capture our data in real-time, meaning data for every item that is scanned and every UPC in the basket is being scanned. That may not sound like much at first, but what’s in a consumer’s basket when you think about it? It’s not always just one item, paid for at the full price. Our system captures a wealth of information about that purchase and breaks it down to the finest details. So say a soda was purchased; we can see what the price of that soda was at the time of purchase, what else was purchased alongside it, any promotional discounts that were applied to the purchase, and whether it was paid for with cash, debit, credit, SNAP, or EBT. We can then take that data back to the merchant to help improve the merchant’s business.
Q. What precisely does NRS offer these businesses/merchants, and how do those things help them succeed?
Our POS system is specifically built to help these smaller stores compete in an industry where corporate giants work with larger budgets and can afford things like volume purchasing. We offer affordable technology with many included features, which can hugely influence a small business’s success. With the breadth of the data our system hosts and collects, we can quickly deliver statistics to the store owner.
Q. How does your data benefit the merchant, and how can this data help businesses with management efficacy in the retail sector so they can best serve their consumers?
Elie mentioned that we offer lots of features with our system. One of those is our inventory module; for merchants who utilize that, we can provide even more intelligent insights with that data. So we can tell the merchant in real-time when an item is running low on inventory and when it’s time to reorder to minimize an out-of-stock situation. That also means we can use this data to look across groups of similar stores and make recommendations for products or brands the particular store isn’t selling that would do well on its shelves. We can also look at these individual products and SKUs across stores and markets to calculate the opportunity loss for not carrying them. So with all this data, much of which is captured and reported in real-time, we can help the small business owner become more efficient and profitable, and improve their overall operations, which improves the consumers’ experience.
Q. What makes your data important and useful to the CPG manufacturer?
The data provided by NRS is unique in that there is little redundancy in our data with any other data set that the CPG brands have already acquired or amassed. In fact, in over 90% of the cases when we are working with a new merchant for their POS system, it's the first time that merchant is actually scanning. So rather than replacing another POS system, we're instead converting them from a more antiquated means of operations management to an automated digitized system. That means the data from that particular store has never been visible to a CPG brand, and there's the old adage: you can't manage what you can't mentor. There's a lot of truth to that, so these stores had largely been ignored and certainly not optimized by CPG brands.
At an even more tactical level, there are millions of core item distribution voids that are caused by inefficiency in how a particular retail sector is managed. So when we’re calculating that opportunity loss Suzy mentioned for not carrying an item, that information is useful not just to the merchant, but also to the CPG manufacturer who would also want to maximize that reach. We prioritize analyzing the data and calculating that opportunity loss, and then the CPG manufacturer can deploy resources so that those voids are remediated. NRS ourselves have vehicles that enable the CPG brand to inform and engage with the NRS Merchant that is more cost efficient than a store visit. This all lends to very basic sales operations, blocking and tackling core item distribution voids, and improved Speed to Shelf of new product launches.
Q. How does the NRS data account for demographic trends, and what are the benefits that information can provide?
With the NRS system, we bring brands first-of-its-kind data in a growing and important retail sector. Our stores tend to be skewed to inner city urban neighborhoods with multicultural demographics. We know from census and all other data that cities are growing, and that the segments that are growing with them are the multicultural demographic segments. It is particularly the Hispanic demographic that is growing, with over 70% of our stores over-indexing to the Hispanic shopper. So from a CPG brand’s perspective, they are really getting a more refined understanding of the shopping, brand, and item preferences of the Hispanic demographic, which then means a better and more specifically cultivated experience for the shopper.
Q. Can you explain what NRS Digital Media Advertising is and its benefits?
Our ads are run on high definition, 15” screens with a nearly 6-foot viewability, and our media is distinctive in that the screens are unavoidable to the customer. They are visibly prominent while shopping and waiting in line, and the customer must engage with them at check-out to view their purchase totals and payment options. We also commit to being able to offer zero waste on the brands that are being advertised on our digital media advertisement screens. By zero waste, we mean that we have behind-the-scenes data, where we can tell you if your brand is selling in that particular store or not. So we can use the data to identify brands carried in a store and refine the campaign scope. Based on that, we can also use the data for various targeting criteria. For example, a brand that is a top seller in its sector may want to identify stores in which it isn’t a top seller and run a campaign in those stores.
Then on the back side, the data can be used for measurement. During the campaign month or the week post-campaign, we can tell you if your brand saw an effect from that campaign. And we can compare that versus stores advertising in the prior period or prior year versus stores that didn’t have the campaign. So understanding the return on marketing spend can uniquely be done in our stores versus other venues or vehicles because you can influence the path to purchase. Many of the brands advertising on our screens are seeing profits that far exceed the investment they made on a campaign during a given campaign month. Therefore, NRS Digital Media Advertising often already delivers that return on marketing spend.
Leading revolution in POS advertising
Elie Y. Katz is president & CEO of National Retail Solutions (NRS). Seven years ago, he brought his years of experience as an executive at various companies in diverse industries, plus strong leadership, interpersonal and organizational skills, to found National Retail Solutions (NRS). Elie additionally owns a number of independent businesses and is currently Deputy Mayor of Teaneck, NJ, serving previously as Mayor.
National Retail Solutions (NRS), a subsidiary of IDT (NYSE: IDT), provides a point-of-sale network and credit card processing ecosystem that services nearly 18,000 independent retailers across the US.
Suzy Silliman is Senior Vice President of National Retail Solutions (NRS). Suzy is a trusted CPG industry leader with broad and deep demand-chain experience from both the client- and supplier side. Her tenures include Managing Director and SVP at MSAi as well as a variety of posts at both IRI and Heinz. Through leveraging data and analytics to achieve profitable growth, Suzy has worked with the leading CPG companies in the world and has gained an unparalleled understanding of the nuances of the Convenience/Small Format channels over two decades.