Innovations ranging from scanning and point-of-sale systems to social media and mobile apps exemplify how much convenience stores have changed over the past 25 years.
By Jenny Bullard, Chief Information Officer, Flash Foods
With more than 40 years as a c-store professional, it’s been an exciting journey to see the changes to technology that have benefited our industry over the last 25 years. Not only has technology helped us account for sales dollars and inventory, the staffing of employees and the ultimate goal of how we better serve our customers, it certainly has been a game changer for our stores.
It’s difficult to encompass in this article all the technical changes that have modeled our industry over the years, but I wanted to define some definite successes that many of us have benefited from in making our companies more efficient and profitable.
Before back-office computers became part of a convenient store environment for accounting purposes, everything was done by managers with large spread sheets. Sales information was recorded from journal tapes of manual registers. There was no integration of devices, so every entry came from a different resource.
Credit card information was manually printed with all customer card information, batched, totaled and sent in for reimbursement. All monies counted by hand, and deposits hopefully made it to the banks in a timely fashion.
All invoices had to be retailed out manually by the managers in order to track retail inventory. And then once that information was received at the home office it was entered by hand into accounting ledgers or keyed into accounting software.
In the mid-80s, back-office computers and software were introduced to our industry, helping streamline the accounting process from store level to home office. Transferring of the data from the store to home office was done over a dial-up phone line.
Seeds of Change
Around this same period, electronic point-of-sale (POS) systems were introduced that could interface to the back-office systems. These systems paved the way for item scanning and allowed the other sales components in the store to be integrated within a local area network.
With the introduction of electronic POS came the ability to process credit cards electronically, which paved the way for pay-at-the-pump in the late 80’s. This was an advancement for our industry even with using dial up connection to process the transaction. But, remember the pain of standing at the pump 20-30 seconds for a credit transaction to be completed?
Over the next decade, technology continued to improve the way we ran our businesses. Faster communication became a very prominent need and wide area networks (WAN) became the most discussed topic within IT departments.
The first WAN networks were small bandwidth circuits, but the ability to reach out and touch your stores electronically was a dynamic change. Connection times for processing credit cards went from 20 seconds to an average of two seconds, which was great for customer service.
Through the years, we retailers have continued to tweak and improve our wide area networks as communications providers brought more options to the table. The ability to move to larger bandwidth circuits via wired or wireless connections greatly improved communications within our companies. So in a typical c-store today, all credit and ATM transactions, prepaid products and loyalty processing flows smoothly from the back-office and POS—and it all takes place quickly, efficiently and at a very affordable cost.
Standardizing the Industry
With efficient networking in place at store level and communicating to the home office, retailers along with hardware and software solution providers saw the need to standardize the integration of all the equipment and sales components in a store.
Fortunately, NACS (National Association of Convenience Stores) was already on top of that project with a NACS Technology Standards Committee. This committee consisted of retailers, software solution providers, hardware providers and NACS staff. Many days and hours of analyzing, writing business requirement documents and standards processes for our industry were a result.
In 2004, the NACS Technology committee became PCATS (Petroleum Convenience Alliance for Technology Standards). And just recently in May of 2014 PCATS was restructured and renamed to Conexxus. Members of Conexxus, both retailers and suppliers, are to be commended for the work that has been done over the years. The work of this organization has allowed retailers to have more flexibility when choosing POS and back-office software with the standardization of the interfaces, as well as other work done with car washes, electronic signs and many other areas too long to list here.
The processing of credit cards across networks brought about the possible electronic theft of customers’ information, which became a wide issue across our industry, as well as other retail segments. This brought about the launch of the PCI Security Standards Council in 2006.
Being PCI compliant required implementing a whole new set of rules as to making our networks and companies secure. In the beginning we all complained, being forced to spend considerable monies to be audited and implement additional software to keep our companies in compliance. But as a general rule today, our companies are more secure and able to protect customers and company information on a more trustworthy level.
With scanning becoming more prevalent in our industry and with the infrastructure of networks in place, this enabled retailers to move data up to the corporate level. Using business intelligence software to mine that data has gave marketing, operations, security and accounting insights to the store level not available before.
For our marketing efforts, the ability to have reports showing sales by categories both in units and dollars, to understand how monthly promotions impact sales, to drill down to market basket data, to understand the relationship of transactions by type of tender, has proven irreplaceable when making marketing decisions.
With operations knowing and getting alerts on events that happen at store level on a timely basis helps to control employee theft. Accounting has totally changed with the ability to have a store level perpetual inventory by item at cost. CAO (computer assisted ordering) using inventory and scan data information has helped eliminate out of stocks and better merchandise our stores.
Cultivating Customers
Around 2004 loyalty programs were introduced to our industry and over the years become a very productive way to enhance our brand image to consumers. Also around this time company Websites became a must have. With this online presence to our consumers we were able to communicate promotions, company information and accept online applications from potential employees.
But that was only the beginning of the social media era; today we utilize Facebook, Twitter and Foursquare. Likewise, company mobile applications are becoming very prevalent.
With the introduction of mobile apps, many now offer consumers the ability to use mobile pay at the pump and inside store. Again, we are using technology as a marketing tool to create brand awareness to our consumers and reach out to the Millennial generation.
Technology advancements have also brought about a cultural change within our companies. Before, IT was viewed as a cost center keeping the accounting computers up and going. Today, technology professionals are an integral part of the executive team. They are involved in daily decisions being made by operations and marketing, which creates a more open communication and closer working relationships.
Wow, a lot has taken place with technology over these last several years.
Now we wait for the challenges that lie ahead. With the rapid pace of technology today, we will not wait long to find out what great innovations await.