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