When Upside was founded just more than seven years ago, it started in fuel. Customers could earn cash back when they filled up their gas tanks at a participating location. Now, Upside has expanded into grocery retail, as well as restaurants.
In explaining how Upside works, Renaghan said from a customer perspective, fuel, groceries and restaurants are everyday spend categories.
“They’re earning cash back on their everyday spend needs, increasing their financial power. That’s the first piece, on the customer side.”
On the participating retailer side, he said the dollars that Upside drives are new and unexpected. “We can measure that through the data that we use to work together.” In addition, Upside is working to maximize the use of their stores. He noted in a typical store, every checkout stand isn’t busy.
“If you can take one more customer per hour, two more customers per hour, 10 more customers per hour, without having to schedule that extra hour of labor, those dollars are dollars you wouldn’t have expected otherwise,” he explained.
“Now you’re maximizing sales per labor hour. And those dollars are flowing straight through to the bottom line for those stores. As we continue to get more and more into the data and into the capacity utilization for our retailers, the more profitable the program actually becomes.”
According to Renaghan, if the company knows how many hours per day are scheduled at a grocery store, then see the amount of sales they’re getting for that same grocery store for those same labor hours, “we can actually increase the sales and profits and not touch the labor hours. We’re making the stores much more efficient. It’s by all the data that we’re using…to drive more efficiency within the store.”
Through shared data, Upside knows how much room it can fill without driving any extra costs. That information is then plugged into its offer engine.
“Every single time a customer opens the app, they’ll see a personalized offer…we know there’s room for that store to handle that customer because we’re looking at that sales and labor data. It’s all going into the offers for the customers, so they can get a little cash back to drive the traffic physically into the stores.”
Renaghan added the Upside algorithm is “always figuring out how do we get the maximum spend out of that customer in the participating stores that are on Upside, stealing from those that are not.”
Data provided to Upside shows between 50-75 percent of stores’ capacity is left unfilled. The company focuses on driving traffic to its retailers during those slower times.
While the customer experience is relatively intact, he said what’s changing is the “macro.” An Upside survey showed 77 percent of customers are comparing prices before making a decision on where to buy their groceries. “We continue to look for the data to drive those customers into the participating stores.”
Renaghan said Upside is continuing to evolve its partnerships. Many of the retailers it is working with have their own rewards program. Of the customers Upside is sending into their store, 20 percent are new, non-rewards members. Of that 20 percent, he said 21 percent go on to sign up for that retailer’s rewards program.
“We’re truly serving as top of funnel customer acquisition, not only into the physical store but into their rewards programs, as well. So on the surface, it may appear as if they don’t work together. But in reality, we’re very complementary to each other.”
He said Upside is uniquely positioned to connect people in its digital ecosystem directly into the physical brick-and-mortar stores that are on the platform.
He said grocery is a bit more complex due to the different formats. Upside continues to look for regional anchors, such as Schnucks and Price Chopper. The platform also features high-end specialty retailers such as Gelson’s and Mother’s Market in the Los Angeles area. He noted that Northgate Gonzalez Markets just recently went live on the platform.
“In the very, very near future, there will be a couple of really large regional retailers that are also going live. So more to come, more news to come on that.”
Read more grocery equipment news from The Shelby Report.