Building a Better Back Office

Back-office systems will continue to serve c-store operators better in 2012 and beyond.

“The quality of point-of-sale (POS) software that is available now, and at lower prices, is changing the market,” said Rick Yost, operations manager for Dead River Co. in Bangor, Maine. “There are some great products out there moving into the clouds, where a lot of people are going.”

For instance, Red Prairie is now a cloud-based, back-office solution that no longer needs servers. “Your updates are instantaneous if you’re a multiunit operator, as opposed to having to dial in, which we had to do in the past,” Yost said. “This technology makes your pricebook much more efficient.”

Cloud computing—providing computation, software, data access, and storage resources without requiring users to know the location and other details of the infrastructure—doesn’t really cut expenses, Yost pointed out. “You pay a monthly service charge for each unit you have, but you do get rid of your servers and your in-house IT has a little bit less of a burden because that maintenance goes away,” he said. “The efficiencies that you garner from these new systems should help offset the monthly cost.”

Training, fortunately, should not be an issue. “I would say that for anybody who’s used touchscreens in the past, the migrations to the new POS are pretty simple,” Yost noted. “Most of the stuff has become very, very intuitive. You have your front screen and the buttons that you follow through. If you take your time and plan those well, anybody can walk in and use your POS in about five minutes.”

Down the road as far as five years, Yost said he sees much of what’s been developed already becoming more widely implemented. For example, he said, better integration with vendors, where scan data is interpreted to forecast sales,  can help make out-of-stock issues a thing of the past.

“Red Prairie can already track sales in real time for you,” Yost said. “McLane can actually help you with these things as well, where they take your scan data and automatically set replenishment levels. It is one of the retail solutions that will help you avoid out-of-stock situations going forward, which obviously has been a big enemy of the c-store industry.”

Compliance Concerns

First it was PCI, now retailers have to prepare for the widespread launch of Near Field Communications, which is expected to become a widely used system for making payments by smartphone in the U.S. While securing transactions isn’t as sexy as splashy outdoor marketing and promotions, its long-term implications for operators must be looked at closely.

Visa recently announced plans to accelerate the migration to contact chip and contactless EMV chip technology in the U.S. EMV stands for Europay, MasterCard and VISA, a global standard for interoperation of integrated circuit (IC) cards and IC card capable point-of-sale (POS) terminals and ATMs for authenticating credit and debit card transactions. The joint effort is aimed at ensuring security and global interoperability so that Visa and MasterCard cards can continue to be accepted everywhere. Upgrading point-of-sale systems is a major issue with which the convenience store industry has been grappling, especially on the heels of PCI compliance costs.

“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 Gray Taylor, executive director of PCATS. “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.”

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