By Don Longo
More than two dozen CIOs, representing some of the convenience and fuel retailing industryâ€™s most successful chains, kicked off NACStech on May 21 with a roundtable discussion of technology best practices and challenges and the role that IT will play in future years.
This yearâ€™s CIO/Tech Roundtables, presented by PCATS and Convenience Store News, attracted the largest number of attendees in the eventâ€™s history, including leaders from retailers such as The Pantry Inc., Caseyâ€™s General Stores Inc., QuikTrip Corp. and Speedway LLC.
As the day began, Don Longo, editor-Âin-chief of CSNews, revealed findings from the CSNews 2012 Technology Study, which found that 42% of retailÂers expect to spend more on technology this year compared to 2011. Although planned technology investments vary, four areas of investment stood out: soÂcial media, employee training, speeding up the customer checkout process and reducing theft/shrink.
After reviewing the studyâ€™s findings, participants split into two discussion groups. These interactive exchanges were moderated by Dae Kim, NACS vice president of research, and Michael Davis, NACS vice president of member services.
In these two concurrent group disÂcussions, three questions were posed to attendees:
- What keeps you up at night?
- Where do you see your business headÂing in the next three to five years?
- What role do you see technology playÂing to support those changes?
The technology executives in Group A cited concerns about payment card industry (PCI) requirements; integraÂtion of systems when acquiring compaÂnies; keeping information technology teams motivated; ensuring that loyalty programs are working; prioritizing projects within available budgets and resources; the future of mobile payÂments; and predicting changes to credit card fees.
As for the next three to five years, many retailers in the group singled out mobile payments as a major focus area. In addition, Europay, MasterCard and Visa (EMV) integrated circuit card standards, alternative fuels and overÂall store growth via acquisitions were discussed.
In terms of how technology will support these changes, several CIOs said that as their companies grow, rapÂidly advancing technologies would be front and center. One executive noted that growth cannot take place without technology.
Meanwhile in Group B, many of the same themes emerged, along with human capital, security beyond PCI standards, aging infrastructures and ever-changing regulations â€" all of which keep both retailers and suppliÂers awake at night. They also pointed to forces outside their control, such as social, economic, technological and political trends.
Regardless of the changes they face, all the CIOs agreed that IT is becoming less of an organizational department and more of an integral component across all business functions throughÂout the convenience store industry.
Roundtable curriculum continued on Day 2 with two educational sessions that delved into the future of mobile payments and the way to build a conÂsumer-centric technology strategy. In the first session, Gray Taylor, executive director of PCATS, presented a thorough analysis of current industry payÂment options, the effect of debit card swipe fee reform and the dozens of moÂbile payment providers that are jumpÂing into the market.
Taylor described mobile payments as "a business-altering technology," notÂing that the payments landscape is at an "inflection point." Traditional card companies are at risk, he said, and marÂket forces can play a role in identifying the ultimate winners and losers in the burgeoning arena of mobile payments. Above all, technology is the catalyst for these changes.
He also discussed the expected reacÂtions of the major credit card compaÂnies and big banks, both of which will fight to maintain their monopoly on payment transactions. Currently, Visa is pushing EMV, a dynamic chip that replaces the traditional magnetic stripe on cards. Taylor said this contact and contactless EMV â€" essentially a "chip and signature" card â€" exist to perpetuÂate the Visa brand.
Taylor also outlined the competitive moves by MasterCard and Discover, as well as the pros and cons of new service providers including Google Wallet and Isis. Another one to watch is PayPal, which has a huge online following and is now being tested in the convenience store channel.
During the second Roundtable session on Day 2, NACS Vice President of ReÂsearch Dae Kim spoke about the impliÂcations of emerging technology trends on the convenience retail landscape. Using both retailer and consumer reÂsearch including NACS CSX and ConÂvenience Tracking Program (CTP) data, he pointed out that there are many millions of dollars in sales opportunities that retailers are missing by not meeting consumer expectations.
The most significant example is the lost opportunity in packaged and founÂtain beverages, in which c-store retailÂers "have left an estimated $101 million on the table" as a result of consumers not purchasing up to their planned inÂtentions.
Kim shared a few interesting facts: When prepared food is purchased on impulse, the buy has little to do with price or promotion. "Taste and smell" were the two biggest reasons consumÂers said they made an unplanned preÂpared food purchase, he said. Another fact that should perturb retailers is that 37% of failed purchases occur due to the consumer not finding what theyâ€™re looking for.
Don Longo is editor-in-chief of Convenience Store News.
Retail technology leaders gathered during NACStech to toast this yearâ€™s recipients of the Convenience Store News Technology Leadership Awards, which recognize technological excellence and the industryâ€™s continued advancement and use of technology tools and applications to further business success.
- Jim Xenos, vice president and CIO of Loveâ€™s Travel Stops & Country Stores, received the Top Tech Executive Award.
- K&G Petroleum received the Outstanding Technology Implementation Award for its implementation of the Hughes Network Systemsâ€™ LinkSafe Broadband technology in all its branded locations. K&G Chief Technology Officer Basudev Dahal, who led the implementation, accepted the award.
In addition, the PCATS/CSNews Technology Hall of Fame inducted its newest members:
- Greg Gilkerson, president of PDI Inc.
- Robert Johnson, president of The Pinnacle Corp.
- Brad McGuinness, senior vice president of research and development of VeriFone Systems Inc.
Next year in May, NACS and PCATS are merging events under a new name: THE Tech EVENT, which will feature more intensely focused educational sessions, networking opportunities and a unique format for suppliers to showcase their products and services.
"Next year, the power of NACStech will double as we merge our industryâ€™s two biggest tech events into one," said NACS President and CEO Hank Armour. "There is only one name that can really describe it: THE Tech EVENT."
With hot issues such as data security, mobile innovations and payment standards affecting the industry to an ever increasing extent, noted Armour, NACS and PCATS are combining forces next year to leverage both organizations for the benefit of the industry. "THE Tech EVENT, is another step in our seamless integration of PCATS under NACS," he said. Visit nacstech.com in coming months for more on this dynamic new partnership