Strategic use of technology

By Andrew Robinson

Last week Amazon announced the release of the Kindle Fire and Kindle Touch, continuing their transformation of how we read, watch, and consume all forms of media.  During an Erick Schonfeld's TechCrunch interview, Amazon CEO Jeff Bezos remarked “in the modern era of consumer electronics devices, if you are just building a device you are unlikely to succeed.”  Likewise, you could argue that "in the modern era of consumer convenience, if you are just adopting technology you are unlikely to succeed."  What we all love as consumers of Kindles, iPhones, Facebook, and all other great products is the end to end experiences they deliver to enhance our daily lives.  As the champions of end to end convenience experiences, retailers have the opportunity to expand the concept of convenience to new heights through innovation.  

The National Association of Convenience Stores (NACS) annual trade show offered retailers amazing new ways to take advantage of the latest technologies, services, and consumer trends to grow their business.  From revolutionizing the way we pay with Google Wallet to leveraging daily deals and promotions to drive traffic, retailers will have their choice of industry innovations to choose from. In making these choices, it is critical to remember that technology is just a tool, and without a strategy to create compelling convenience experiences, retailers may discover they haven't achieved their desired outcomes. One clear example of this is the success and failure retailers have had with daily deal sites like Groupon.

Consumers love daily deal sites because they get unbelievable discounts on products, brands, and services. Retailers excited by the daily deal concept may have varying impact between departments. Marketing departments love them for the volume of new and loyal customers they bring. However, if not supported by a strong strategy, operations choke on sudden un-forecasted demand and accountants are surprised by the sudden loss of profitability. Looking forward, the new found possibilities of mobile promotions can accelerate these benefits and/or challenges by enabling retailers to better target consumers based on their buying behavior and location.

As retailers evaluate technology partners to create compelling convenience experiences, they should keep in mind the following:

• Does the solution deliver the experience, or just enable it?
• Is the solution supported by a large partner community? 
• Can the platform adapt to the rapid change of technology?

References:

Bezos: “In The Modern Era Of Consumer Electronics Devices, If You Are Just Building A Device You Are Unlikely To Succeed.” By Erick Schonfeld (http://techcrunch.com/2011/09/29/bezos-in-the-modern-era-of-consumer-electronics-devices-if-you-are-just-building-a-device-you-are-unlikely-to-succeed/)

Visa announces EMV roadmap to the United States

By Parker Burke

Visa recently outlined a roadmap to EMV (EMVCo) contact and contactless chip acceptance in the United States.  While additional information is likely forthcoming from Visa and others, there are some key takeaways for customers in the retail fueling industry:

• Visa’s acceleration of contactless chip acceptance will likely help mobile payments penetrate the market more quickly.
• ­          Beginning October 1, 2012, if at least 75% of a retailer’s payment transactions occur at payment terminals that are chip enabled, the Visa Technology Innovation Program (TIP) removes the requirement for annual PCI-DSS compliance validation
• ­          By April 1, 2013, U.S. acquirer processors and sub-processor service providers are required to be able to support merchant acceptance of chip transactions
• ­          POS: October 1, 2015: liability shift for any in-store fraudulent transactions on non-EMV chip-enabled terminals  
• ­        Forecourt: October 1, 2017:  liability shift for any fraudulent transactions at fuel dispensers on non-EMV chip-enabled terminals 

While the retail industry awaits additional guidance from Visa, industry trade organizations (like NACS) have already begun to comment on Visa’s announcement, PCATS Executive Director Grey Taylor weighed in on the announcement: 

“NACS welcomes the migration from the current, unsecured payment system but is anxious to learn what financial incentives will be offered to convenience and fuel retailers to defray the huge cost of upgrading 800,000 dispensers and 300,000 points of sale,” said PCATS Executive Director Gray Taylor. “If Visa is coming to the market with reduced interchange, indemnification on fraudulent use of their products and relief for the retailer’s huge annual expense for PCI compliance, then we think there is a value proposition here. Without any one of these elements, it will be hard to justify the upgrade," he said, adding, "It is frustrating that Visa is still obsessed with dynamic account values, while doing nothing about authenticating the card user. EMV without user authentication only addresses part of the data security challenge.”

While the industry will likely wait for things to shake out before acting on their installed bases, many in the payment industry, such as WorldPay, have begun encouraging retail fueling owners and operators to strongly consider EMV-upgradable equipment as they evaluate new hardware purchases.  This upgradable hardware will help retailers take measures to future-proof their investments against future mandates and emerging payment technologies like EMV, mobile payments, and others.

The "M" in c-store

By Rodger Williams

Yea, it’s there.  If you don’t see it, you will.  We all know that Mobile technologies are poised to take payment to a whole new level. But what we don’t realize yet is the convergence of Mobile devices into the c-store environment.  From the forecourt to the store, Mobile devices will play an integral part in branding, increasing loyalty, faster throughput, higher sales and better tracking of what the fueling retail customer wants.  Mobile devices are what they are because they make things convenient; phone calls, emails, texts, Facebook, internet access and data storage 24/7 is why we can’t live without them.  So, it’s not a stretch to see the meeting of the mobile phone with the convenience store to help retail customers get what they want faster, easier and more secure. 

So, let’s look at just how mobile will allow more convenience in a c-store.  First, the c-store has roughly 3 peak times each day; early morning (7am to ~9am), lunch time (12pm to 1pm) and later afternoon (4pm to 6pm).  It’s during these peak times when customers may have to wait in line either at the gas pump, inside at the cash register, or both.  If these lines get too long, the customer may not return because the effort was not convenient.  It’s these areas where mobile technologies will help retailers who decide to adopt them.  Example of these technologies may include:

·         Mobile Checkout – Customers use their smartphones to scan the items they want.  The smartphone then links to the clerk standing by the door which also has a mobile tablet and performs the transaction with either debit or credit almost immediately (Less than 10 seconds).  Oh, and by the way Mr. Retail customer, since it’s your 20^th coke, you get a free song posted to your Facebook account. Thanks for your support.

·         Mobile CRIND® – Customers will pull up to a fuel isle in their car and either from the in dash device or their mobile phone, link to the fuel dispenser there by automatically transferring preferences like fuel type, loyalty and payment to the dispenser.  Basically, after they authorize the transaction, the customer simply gets out and fuels.  Ok, we know you’re in a hurry now, but since this is your 10^th fill up, stop in the next time you have a minute and pick up your free sandwich or other value item Mr. Retail customer.  Again, thanks for your support and see you next time.

·         Personal touch – Mobile devices give their users a sense of personal touch.  Retailers can form a bond via the personal mobile device and the brand through the transaction.  Users will feel more adept to visit that brand because it has become personal. In other words, it’s like a friend in Facebook “Hey, I know you and you know me.”

 This is just a glimpse of the possibilities these technologies will offer. 

Preventive maintenance can save you money

By Paul Royall

When we think of preventive maintenance, we usually think of our cars and the required oil changes and tire rotations. But we should apply the same thought and care to our fuel dispensers.

There are 4 areas we should look at when we perform preventive maintenance.

·        Filters- Because fuel is transferred several times between its source and destination, there are many opportunities for it to become contaminated. Mainly, it can become contaminated with dirt and water. I recommend that you change the filter on each meter every 300,000 gallons or 6 months.

·        Hanging Hardware – Visually inspect the nozzles, hoses, swivels, and breakaways each month. This is an area of high risk, since consumers use this equipment to fuel their vehicles with various petroleum products. Many manufacturers recommend replacement schedules for the hanging hardware.

·        Cleanliness – The dispenser should be clean. All the required decals that may provide warnings, instructions, octane levels, and calibration certifications should present and easily visible.

·        Calibration – If your dispensers have traditional positive displacement meters, calibrate each meter at least once a year for proper operation. If a meter is out of tolerance it could cost you or your customers.

 
Here is an easy way to Calculate your lost profits:                                      
At $4.00 per gallon

      One Cubic Inch of Fuel = 1.7 cents

     100,000 Gallons per month = $346.32

     Approximate Annual Loss = $4,155.84

Double your giveaway if your meters are over delivering 2 cubic inches.

Triple your giveaway if your meters are over delivering 3 cubic inches.

Having a preventive maintenance program can extend the life of your dispenser, increase consumer confidence, and increase the owner’s return on investment. Most service companies offer some type of planned preventive maintenance on both aboveground and underground petroleum systems on new and existing systems. These programs are designed to reduce annual repair costs and down time.



Your first PCI audit may be over . . . but your journey is just beginning

By James Kelly

Over the last year, it’s been very interesting to watch as retailers transition from approval of their first PCI Audit to maintaining their overall PCI compliance.  Everyone was aware that PCI was a continual process, and that you are never really “finished” with PCI. But most appear to have underestimated the amount of work required to maintain compliance year after year.

While there are a lot of requirements around ongoing compliance, three areas in particular are creating unique challenges for the c-store environment, and should be carefully planned for.

·         Monitoring of Audit Logs

·         Penetration Testing

·         Vulnerability Scanning

Combine the fact that PCI has very specific requirements around each of these items with the variety of configurations and complexity of a c-store IT environment; and you end up with a very challenging problem. Often, it involves large amounts of time and potentially specific hardware and software to address.

Many retailers are attempting to manage their own compliance by standardizing their network configurations across their locations and adding or refocusing IT staff toward compliance.  Others are contracting out to one of the many PCI approved Service Providers that offer products to handle each of the items mentioned above.  Not surprisingly many retailers I have spoken with have already drastically altered their ongoing maintenance plans from what was originally submitted as part of their PCI audit, and continue to look for the right solution to fit their needs.

So, if you are one of those retailers that is just moving into that “maintenance mode” and find yourself throwing out your original plans, take comfort in the fact that you are not alone; and the right solution is out there, just waiting for you to find it.

Remote Monitoring and Control Trends: Technology is becoming more integrated . . . now what?

By Larry Tucker

It’s all around us… We are a connected world. From our refrigerators to our cars, more and more devices are becoming connection-enabled every day. Projections estimate there will be more than 50 BILLION connected devices by 2020. With everything being connected, we as customers want to feel empowered, without being overwhelmed, but that doesn’t seem to be how it’s working out.

Connectivity should make life easier, not harder! Right? This should be easy with all the gadgets that we have here and there. Even when all is connected, you come to find out it’s still very disjointed. Shouldn’t it all just ‘talk’ to each other and make beautiful music? Manufacturers focus on what they know – their equipment, creating silos of technology and uses for it. Once this happened with TV remotes, and then came the Universal remote. Now every TV comes with one.  Commercial equipment and the latest got-to-have item will get there too! Some are ready out-of-the-box, while others will have to be pushed a bit to go in that direction.  

As connections continue to become more seamless and simple, businesses are finding that just having information creates more confusion. As product offerings expand, the need for a cohesive point of connectivity becomes the must have. No one solution, even a universal remote, is without its setup requirements to make it useful. Information and technology in and of themselves do not create competitive advantage. It’s what you do with them. Companies struggle to determine how to make all of this new information functional. There are a lot of directions you can go, but ultimately it’s what makes sense for the company’s business model and philosophy. 

So what is the priority? Is it customer service and loyalty -- using data to better know your customer and ensure your offers keep them coming back? Or, is it the experience of each and every customer and ensuring they get in and out as quickly as possible? Or, is it using a world class service organization to lower overhead and increase margins?

Whatever the motivation, it needs to stay at the forefront of the decision making process to ensure success can be realized when implementing a Remote Monitoring solution. This may mean added resources or underutilizing the capabilities of a really powerful technology. In the end it’s admitting that no matter how simple technology gets, it’s still never possible to find the ‘Easy’ button.

DEF and the Travel Plaza

By Chad Johnson

The topic of Diesel Exhaust Fluid (DEF) has been on many minds since the EPA finalized their reduced NOx emission standards in 2004, with final implementation requirements after Jan 1, 2010. Many of the OEM truck manufacturers have chosen to meet the regulations using the Selective Catalytic Reduction method, which includes the after treatment dosage of DEF.

Through the first six months of 2011, truck makers sold 72,067 heavy-duty trucks in the United States, up 46.3% from the 49,257 in the first six months of 2010, WardsAuto.com said July 13.  Why is this important?  A vast majority of the OEM truck manufacturers are meeting the new regulations with SCR due to its proven reliability and improved fuel efficiency. As travel plazas plan for their drivers’ needs, filling up with diesel and DEF is becoming more common as the sale of new trucks continue.

DEF is being distributed in both small jug and bulk installs through specially designed dispenser systems for the unique challenges DEF presents. As travel plazas plan their forecourts, convenience and speed should be considered for both diesel and DEF fueling. Dispenser systems that combine both the diesel and the DEF at a single fueling position minimize the forecourt footprint and expedite the throughput of the fueling traffic. 
Projections for SCR-enabled trucks show over 75% of trucks will require DEF by 2015. Is your forecourt ready to handle the opportunity today and in the future?

http://www.ttnews.com/articles/printopt.aspx?storyid=27126

http://www.discoverdef.com/news/2011/6/23/new-1plus1-pumping-systems-installed-at-two-travelcenters-of-america-stores.aspx

http://www.discoverdef.com/news/2011/5/17/exclusive-pilot-to-install-def-pumps-in-1,000-filling-lanes-by-october-2011.aspx

http://www.discoverdef.com/news/2011/3/30/love's-picks-gilbarco-as-forecourt-technology-supplier.aspx

Are you complacent with your compliance?

By Mike Furst

You don’t have to look very hard to find reports of recent underground storage tank (UST) violations.  EPA fines range from tens of thousands of dollars to millions, depending on the scope and severity of the issue. It’s not just big oil companies that are at risk. Even small retailers are under more scrutiny by the public, media and government regulators. 

Last month a jury awarded the largest judgment ever for a UST leak.

Unless USTs and lines are maintained, monitored and periodically upgraded, you are at risk for leaks. Are you adequately protected? 

Here are some questions to consider:

1.       Do you have all your tanks registered with the state or county? 

2.       Do your employees know how to properly respond to an Automatic Tank Gauge alarm?

3.       Do you know when and how to file the permitting documents to renew your tanks? 

4.       Are you prepared for a surprise inspection from a federal or local regulator? 

5.       Do you have at least one year’s worth of monthly compliance reports and alarm history data? 

6.       Are you confident that your customers are not at risk from excessive water in your fuel?  Pumping water into a car can be costly for both you and the customer.

If you’re not comfortable with any of the questions above or want more information, consider working with a company that has the knowledge and resources to help you manage the risk and stay in compliance. These services are more affordable than most people think, costing less than $1,000 per year per site for a basic offering. Although the risk of an incident is low, the potential costs can be devastating to your business and the environment. 

The battle for the share of wallet: the aftermath of Durbin

By Parker Burke

When the Durbin Amendment cleared its final hurdle on June 8, 2011 and the subsequent Fed ruling was made on June 29, 2011 limiting debit interchange fees to $0.21 and .05% per transaction, retailers across all industries were relieved at the reduced interchange, but disappointed that the Fed had not done more.  However, cutting debit interchange by more than half would no doubt save retailers a ton of money, wouldn’t it?

While many regard the battle for “swipe fee reform” as a draw, the new battle for the share of wallet is merely beginning. The card companies have already lobbed their initial salvos to change consumer behavior towards using credit for everyday purchases by enhancing credit card rewards and slashing debit card rewards and benefits.

Without innovative action to counter enhanced “credit card rewards” programs, retailers could actually lose out on the savings associated with debit swipe fee reform: fees will indeed be reduced, but incidence of usage may also decrease, driving consumers to higher cost credit cards. 

Creativity is the name of the game here and retailers that benefit from this legislation will be the ones who steer their customers towards lower cost forms of payment.  How can you be successful?  It may not be as difficult as you first imagine: first, determine what is important to your customers; then, take that information and provide them with something of value in return.  It is that simple!

-          2 cents off gas!

-          Free coffee!

-          Double rewards!

-          Free car wash!

As new payment technologies continue to emerge, successful retailers will also need to remain at the cutting edge of the payment experiences their customer’s value.  While still in its infancy, mobile payments will be one of these experience, allowing retailers to not only serve the demands of the growing tech-savvy market, but also steering them to lower cost forms of payment.

As the battle for the share of wallet heats up, what other methods do you think successful retailers can use to incent lower cost forms of payment in-store and at the pump?






Here's a great new article about staying connected via mobile payment: http://www.retailtechnology.csnews.com/top-story-constant_connectedness-283.html

Why don't you visit my neighborhood store?

By Scott Oakes

Remember the days of visiting the same corner gas station with your parents? I remember my dad never paid cash for gas; he used one of his two gas cards. In the 1980s we visited an unattended fleet fueling station that billed us monthly and was supposedly the “best deal.” The world has really changed over the years; or has it? Today according to a recent survey by Convenience Store News Market Research 2011, the top two factors dictating a buyer’s purchase was Price and Convenience (Brand was in third place).   

What drives you to stop at a certain store?  Their coffee? Maybe. Their food? Possibly. Their location?  Absolutely!! Especially if you are like me and you drive your car until the low fuel indicator light comes on.    The whole concept of customer loyalty has become a maelstrom of activity with everyone trying to get their card in your wallet. They promise free coffee, free sandwiches, and of course cheaper gas.

Have the days of being the community gas station gone away?  Knowing the cashier by name has been replaced by quick lines, self-serve kiosks, and more pumps on the gas island. Can family-run convenience stores survive in the loyalty-driven mentality where a penny per gallon can lose a customer forever? The good news for many of these smaller community locations is that most of the Point of Sale vendors and major oil networks are investing in scalable solutions that allow them to compete with the “big box” c-stores. I know it’s hard to resist the smell of new paint, free food, and Hollywood style grand openings, but eventually customers become numb to these efforts. 

Some smaller retailers have continued to offer clean bathrooms, good lighting, and a reasonable loyalty program that allow their customer to feel they get a good deal every time they visit their store. Some are offering discounted fuel for buying a car wash, some are driving their customers to use alternate payment methods, like branded fuel cards, prepaid cash cards, and ACH processed cards. Some successful retailers continue to offer discounts to local businesses through organized local fleet programs.

Many major oil marketers have adopted grocery programs. Some have become huge equalizers where customers view saving on gas above their double coupons on groceries. For grocery chains who are involved, they get an upper hand on their competitors who either have their own gas islands or do not have a convenience store partner. Over the past few years, I have spoken with some very creative people who have used a wide variety of methods to maintain their presence as the local convenience store – the kind my dad would still like to visit every week. 

For more on creative loyalty techniques go to the following places to read more about some great ideas see below:  Other Recent Articles on Loyalty

http://www.csdecisions.com/2011/06/13/empowering-loyalty-customers/            

http://www.csdecisions.com/2011/01/26/planning-the-convenience-store-of-tomorrow/

http://www.mobilemarketer.com/cms/news/database-crm/2769.html http://www.csdecisions.com/2011/02/19/customer-loyalty-done-right/ http://www.loyalty360.org/state_of_the_industry/digital_coupons_how_loyalty_programs_will_cash_in/ 

http://www.csnews.com/article-a_bigger__better_nice_n_easy-1628.html

Customer experience is in the toilet

By Albert Fernando

Typically when customers are indifferent to a brand they usually seek the simplest and most convenient path to get what they want. In terms of choosing where to fuel, customers most often select the location that offers the best trade-off between price and convenience. In contrast, when customers are “emotionally engaged” in the experience or somehow feel enabled by the product or service, the odds are greater that they will pay more for it and come back often.

Key takeaway is the customer experience, not necessarily the brand, can have a greater impact on your store's profitability and loyalty.

In today’s fast paced retail environment, it’s easy for us to get so caught up in the “selling” process that we forget our customer’s “purchasing” process. Our challenge is to suspend what we think we know about the customer and “walk in their shoes” to fully understand what stimulates their shopping experience. Only through that intimate knowledge can we start to intuitively match our selling process with the consumer’s view of how they want to purchase. Careful thought of what matters to your customer can truly create an impactful and memorable customer experience.

The ability to create an appealing and differentiated customer experience at your site can do wonders for your brand, drive site traffic and inside sales. Consider the following case study of Preem, a gas station / convenience store chain in Sweden. 

Preem was facing unfavorable market conditions and was struggling to differentiate themselves and create a connection with their customers. With stiff competition eroding fuel margins, Preem’s only hope was to drive the retail profitability of its c-stores rather than rely on fuel sales. Sounds familiar?

Preem realized that competing on completely rational product features was not going to win, so they decided to focus on something radical. Instead of trying to grab a larger part of the total fueling consumer market, Preem focused on attracting and appealing specifically to the female segment.

Specific focus was placed on areas where customers would really notice a difference and those that would reflect the radical market segmentation of women. Through research, the number one most important point of interface for women centered on the toilets. By redesigning their bathroom customer experience (ex. full length mirrors, framed pictures, vibrant colors and softened lightning), Preem became a talking point within social circles. Their toilets were a genuine point of differentiation among female customers, who happily shared their experiences through friends by word of mouth.

Preem didn’t stop there. They extended the same design elements into the rest of site (ex. forecourts were more brightly lit, food choices were fresher and healthier) and before long they transformed themselves from a dreary, rundown gas station into a vibrant, inviting social hub.

Preem pilot service stations initial YOY sales results saw a 28.8 percent increase in fuel volume and a 146.1 percent increase in fresh food sold.

Amazing what identifying and acting on your customer’s wants and needs can do for your business. I look forward to hearing your comments and other ways you’ve seen businesses transformed through enhanced customer experience. 

Read the Landor thinking article, Sex and the c-store, or getting the toilets right for more information on Preem.