Speed of service is crucial, of course, but with all the services that convenience stores offer today communication—between machines—is key.
From gas pumps and safes to back-office software and lottery terminals, operators are finding that integrating them with their point-of-sale (POS) systems leads to greater accuracy, efficiency and profitability.
Mary Vinson, director of operations for Donnini Enterprises and Reliance Petroleum in Lake Park, Fla., said tying store electronics together is essential if for no other reason than it allows for more rewards and promotions.
“I don’t think it would cause the downfall of a station not to have it,” Vinson said. “Convenience stores are price-driven. I think that’s really where you get your loyalty, not whether or not somebody can offer you a promotion at the pump.”
At Donnini’s six stores, gasoline dispensers regularly communicate with cash registers, Vinson explained. “We manually enter our information into our backroom software, which electronically transmits to our office and downloads into our accounting program,” she said. “The amount of labor involved in maintaining a price book on your register is really pretty incredible, and unless you have that workforce you’re not going to do it right.”
The technology’s return on investment seals the deal, especially given the current economy. “I don’t think hiring somebody to do that is actually going to pay for itself,” Vinson said.
Fortunately for the industry, NACS and the Petroleum Convenience Alliance for Technology Standards (PCATS) have helped forge new standards that allow equipment to speak to each other effectively.
“PCATS is what this is all about: systems that communicate using a single or unified interface,” said Avsha Klachuk, director of marketing technologies for Alon USA, whose wholly-owned subsidiary, Odessa, Texas.-based Southwest Convenience Stores LLC (SCS), is the largest 7-Eleven licensee in the U.S. with more than 200 stores.
According to Klachuk, such interfaces are more crucial to success than ever. “In difficult times, the number of store personnel goes down. We are facing having only a single person on a shift just because we are operating in rural areas in the Southwest,” he said. “Because of that, people don’t have the time to take a pencil and a piece of paper and reconcile all these activities. Also, if you think about it, people make mistakes. That’s why everything has to be communicated electronically.”
Defining the bottom-line benefit of this type of electronic interface system is difficult. “Probably there will be a time next year, or some time in the future, when we will sit down and do the math. But without it I don’t think that we can survive because we may lose numbers, transactions, money,” Klachuk said. “Anyone that has more than a couple of stores may lose if he doesn’t have that communication or interfacing in place.”
Alon’s full interface is about 70% complete. “We’re not there yet. We don’t have the lottery machine hooked up to the system interfacing yet, so it’s a lot of manual processes,” Klachuk said. “Management is projecting next year for completion,” he added. “It’s just a matter of time; time and money.”
In the past, Alon didn’t have permission from the Texas Lottery Commission to interface, but lottery commissions in other states have already agreed to let the company do what’s needed. “We’re seeing progress in this area,” Klachuk said. “We’ll include age verification by swiping driver’s licenses as soon as Texas will allow us to swipe them. Other interfaces will allow us to get rid of most of the card reader on the counter.”
Eric Huppert, president of Team Oil Inc. in Spring Valley, Wis., a BP marketer and jobber, said his company’s systems will be upgraded in the next six months for Payment Card Industry (PCI) compliance, with the firm transitioning to Gilbarco’s Passport system. About seven years ago, the it purchased a PC-based POS system with what was promised to be unlimited upgradeability.
Since then, Huppert has seen the need for his equipment package to expand to be able to communicate. “For instance, we have never had a backroom package, but I think we’re going to do that when we put the Passport system in. The reporting and real-time tracking alone is worth the investment.”
As for Donnini, it also is in the process of upgrading its registers due to the need for PCI compliance. “We’re going to be using all the features available except, probably, for maintaining that scanning price book,” Vinson said. “We use scanning software, but where it transmits to our office it’s still too labor intensive right now. We’re definitely going to take advantage of every goody that the software offers.”
The timing of the upgrades has proved a hard pill to swallow for small marketers. “I don’t know that I would have spent the money right now if I had not been forced to, but I guess this is making me do it,” Huppert said. “I think it is your most accurate way to control your product loss and keep up with price changes—it is supposed to make it easier for you to do weekly price changes. You hear a lot of negative stories about stores that don’t maintain their price changes.”
In the market in which Team Oil operates, in-store merchandise prices can change weekly, if not daily. “As prices go up and down—and it’s mostly just up—if you’re not keeping an eye on it, all of a sudden you find you have been selling something at a loss for a week or two,” Huppert said. “If you don’t have that technology you are not going to be keeping up on that, or on your margins, and you’re going to be out of business.”
Team Oil’s current system provides a running total of sales, but the data is still recorded manually at the store level. “It’s a lot of work to do it that way,” Huppert said. “With the new backroom packages you can scan all your products and you’re registered. The computer knows how much is in there and tracks it accurately.” If discrepancies arise a report can determine what happened, which helps retailers focus on the areas they need to watch and control cost, rather than spend time tracking inventory by hand.
Team Oil also can track underground tank fuel levels in real time. “If there’s water in the tanks and that machine talks to our registers to tell them a tank level is below a thousand gallons, it alerts the cashier so he can tell us a fuel level is low,” Huppert said. “If there are any leak warnings they will also show up on the registers, although we’ve never seen it.”
The gas pumps also communicate effectively with the POS letting the store know everything from a declined credit card to when somebody is putting their card in wrong. “It will also tell them if they left their card in the pump, because it won’t finish the transaction unless you have pulled your credit card back out,” Huppert said.
If a gasoline customer pays inside and a cashier authorizes the transaction, the system alerts the cashier when he picks up and returns the nozzle. “We always keep an eye on the running total so the person doesn’t lay the nozzle on the ground and drive away,” said Huppert.
Team Oil’s 54-camera safety system—tied into its offices and Huppert’s home—are ar
ranged so cashiers can watch the pumps and other locations in and around the store and car wash. “We used be an electrical company, so we do different systems like that ourselves,” Huppert said. CSD