Remerging Technology?

Zip back to Nov. 4, 2008, when CNN newscaster Wolf Blitzer seemed smitten by some techno-spice his network rolled out during its coverage of the presidential election.

It went like this: A 3D image of a CNN correspondent in Chicago was beamed to the network’s New York headquarters, where she appeared in-studio as a hologram.

It was a nifty use of gadgetry, no doubt, but some late-night TV hosts couldn’t help but poke fun at the seemingly pointless technology, as well as ask the all-important question: Why?

It’s a blunt question that could, perhaps, become the word of the day for convenience retailers weighing their own options for new technology in 2009. If successful operators learned anything in the past 12 months, it was this: Convenience stores that aren’t sitting on a mound of cash must run lean-and-mean to succeed in a marketplace where cash-strapped consumers are scrutinizing every purchase.

While that probably means consumers won’t be seeing holograms of c-store CEOs at the coffee bar, it doesn’t mean technology is being pushed to the back burner. It just means there’s more likely to be improvements and efficiencies for existing technologies.

And, of course, it means a few operators will be asking, “Why?” as they approach the technology of 2009 with some trepidation.

Year of Efficiency
“I certainly think people are going to be in efficiency mode this year,” said Scott Hartman, president and CEO of Rutter’s Farm Stores in York, Pa. “I don’t think a lot of the smaller folks are necessarily in a position to spend a lot of money.”
Hartman, long an advocate for new technologies and tech standards in convenience retailing, predicted that two primary focuses will gain steam on the technology front this year, both of them driven largely by necessity: Solutions for PCI compliance (see The High Stakes Of Compliance) and innovation for loyalty programs.

“For the POS guys, those are probably the two key things they’re going to be talking about these days,” said Hartman, who has chaired the Petroleum Convenience Alliance for Technology Standards (PCATS) and the National Association of Convenience Stores (NACS). “With the recession, if stores don’t move on something, I think a lot of budgets will be spent on PCI compliance.”

The price tag for emerging hardware or software on this front could run the gamut, with even greater fluctuations depending on where a retailer is in regard to existing technology in their stores.

“I’ve heard everything from significantly older facilities—for a whole new gas setup—looking at easily $50,000 to a couple hundred thousand,” Hartman said, admitting that PCI compliance is an area that’s a bit “unsexy” as far as new technology goes.

“The only thing it gets you, hopefully, is better security,” Hartman said. “It’s hard to put an ROI or number on it.”
And that’s just PCI compliance. In loyalty programs, there’s a plethora of options on the table as well. More than two dozen variations were featured at the NACS show alone this past fall. It seems every other week a company is rolling out a new fuel- or points-based solution for frequent flyers at c-stores.

Old Tunes, New Twists
PCI Compliance and loyalty program technologies may be the two elephants in the room, but what about those new solutions that trigger some sort of razzle-dazzle to lure new customers and lock in old ones. A hologram, per se?

Not yet, but there are always grand upgrades to old tools. Retailers are looking at new and improved versions on everything from POS systems to lighting technologies and signage as a way to increase brand visibility, improve energy and labor efficiencies and streamline operations.

Companies like Emerson have new solutions that can help manage lighting and control in-store climates, while technology innovators like NCR are introducing new POS systems that offer multiple solutions to save on costs.

“What we’re doing as a company is putting a lot of emphasis on self-service,” said Gary Dalton, product manager for NCR’s RealPOS 70XRT system, a POS terminal that improves on energy efficiency, durability, serviceability and options for upgradability.

“This unit is designed to be a very green product,” Dalton said. “The terminal is almost 100% more powerful than previous generations, but it uses 50% of the energy.”

It may not sound like much at a glance, but at savings of $30 or more per terminal each year at sites that have, for example, five terminals at each of 50 or 60 stores, the savings can add up to thousands of dollars over a product’s life span.

The concept of putting control in the customer’s hands isn’t anything new—think self-serve kiosks for foodservice or self-checkout at POS terminals—but what is new is the cost accessibility these products offer retailers, as well as the increased efficiency for both retailers and customers.

“That’s absolutely the case,” Dalton said. “The end user, the customer, at the convenience store or any other retailer is very savvy today. They appreciate when a vendor makes that type of option available to them.

“All these things that we’re seeing people experiment with is the future of POS,” Dalton said. “To have the kind of flexibility and expandability to do what you want today and in the future. You can buy an entry-level version that meets all needs now, and then you can expand to something more than that later.”

Sign of the Times

In Maine, J&S Oil President John Babb (see The Maine Thing) said he’s anxious for the economy to pick up so he can invest in electronic signage for his seven Xpress Stop service stations and convenience stores.

Internal LED lighting and external electronic signage featured at the NACS Show offered wider parameters for performance improvements, enhanced displays and costs savings, too.

Such investments could pay off in labor as well, Hartman said. “Some operators are certainly putting money into electronic gas price signs. At the speed prices are changing these days, that’s a pretty good investment. When you’re changing them every day, even more than once a day, that’s a lot of labor.”

Hartman and his team are experts in this notion of fine-tuning the details to improve overall costs. They launched the largest expansion plan in Rutter’s history this past year, using a prototype store to guide development in new stores, all of which include the latest in energy-saving solutions and more efficient technologies.

Instant hot water heaters, for instance, were installed in Rutter’s restrooms to cut down on the utility costs. “If you think about it, how often do people use hot water at sinks in bathrooms,” Hartman said. “With the instant heaters, it can warm up pretty quickly.”

You don’t need a hologram to tell you that’s a technology worth having.

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