2010 NACS Show Dives Into Hot Topics
ATLANTA -- The 2010 NACS Show opened here Tuesday, kicking off with a morning devoted to top-of-mind c-store retailing issues.
The morning agenda at the show included sessions on fuel loyalty programs, sustainability, promotions and digital marketing.
During the session, "Fuel Loyalty Programs: What Works and What Doesn't," Joe Leto of Energy Analysts International Inc. gave an overview of the fuel loyalty segment including the growing number of hypermarkets in the United States -- a total of 4,809 and representing a little more than 12 percent of the market. The general discussion was the pros and cons of big oil loyalty programs vs. a proprietary program and included Jenny Bullard, CIO of Flash Foods Inc., who participates in Shell Oil's rewards program at two locations, "but it requires two POS systems, one for the c-store and one at the pump, which is an added expense," she said. The reason for the two POS systems is because Shell does not allow retailers to use their loyalty program at the pump when participating with Shell, said Pat Lewis of Oasis Stop N Go LLC.
Attendees of the Payment Card Industry Data Security Standards (PCI DSS) session, "Keeping Your Budget, Brand and Sanity Intact in a Data Security Breach," learned ways to prevent, detect and respond to a breach from Tim Horton, vice president of business development at First Data Corp. and Robert McMillion, director of solution development at RSA.
"Convenience stores are at danger for attack when the data is in transit from the swipe at the store to the processor because they don't really store data long term," said McMillion.
When it comes to PCI, prevention, detection and response are all important, but since detection and response are the hardest, most people focus on prevention, which "slows the bad guys down," McMillion told attendees. But detection is extremely important because the average time between when a breach occurs and when it is detected is four months -- "the longer it is between the breach and the detection, the worse it is to clean it up."
Meanwhile, the message from green consultants Justin Doak and Lisa Russell of Ecoxera was that it's important for retailers to stay a half step ahead of consumers when it comes to sustainability and green initiatives. "Best practices today will become mandatory tomorrow, so if you do it now, you will have an advantage on your competitors," they pointed out in their session, entitled, "International Sustainability Best Practices." Doak and Russell went on to present best practices from a number of companies including Walmart, Tesco, Nike, Chipolte, and Best Buy.
The speakers also noted that no company in the c-store industry has yet taken the leadership role on the sustainability front so the market is wide open for a retailer to make its mark as the green c-store leader.
During the session "Buy Me: Developing Effective Promotions," several retailers inside and outside the convenience store industry presented methods for creating promotions that match company goals. Robert Perkins, director of marketing for Rutter's Farm Stores, explained the chain of 55 stores uses promotions to drive volume in stores through foodservice. To do this, the company does research, keeps the customer in mind and strives to be creative, he said. To drive foodservice sales, Rutter's uses a feature approach rather than a price promotion. And while the company strives to be creative, it also looks at past successes for inspiration.
Also speaking during the session was Mark Schumacher, corporate director of fuel management for SUPERVALU. The grocer, which operates 2,400 grocery stores in the U.S. with another 133 fuel centers, uses pre-analysis to determine a promotional strategy. During this stage, the company ensures marketing and merchandising departments are aligned to the same company strategy, while category managers should have planners secured six months ahead of time with vendors and suppliers. In addition, funding should be memorialized in advance, he advised attendees.
After the promotion is done, Schumacher emphasized that post-promotion analysis should be done as soon as possible, and should serve as a guide to future promotions, including areas such as store inclusion/exclusion, point-of-sale materials, price, items included, and more.
Rounding out the session was Kevin Farley, vice president of marketing for GSP Marketing Technologies. He provided three elements to successful promotional design:
• Get looked at: visibility, location, consistency.
• Do no harm: do not harm or deviate from brand identity.
• Communicate: with only seconds to grab customers' attention, use complexity in promotion in accordance to signage location.
And not surprisingly, digital marketing is already proving to be a hot topic at this year's NACS Show, as several of the workshops yesterday provided attendees with the dos and don'ts of harnessing the power of social media, as well as mobile and e-mail marketing.
In the session entitled, "Fueling Inside Sales from the Forecourt," three retailers discussed ways to entice consumers to your site, how to get them from your forecourt into your store, and then how to maximize your sales to them when they enter the store.
Jon Bausman, director of media and brand development for Ricker Oil, showed how companies are using mobile and social networking effectively to draw traffic. Then Norman Toriano, fuel operations manager for Wawa, discussed how important it is to highlight your building and make it enticing for all customers so they feel comfortable going from the gas pumps into the store. He also showed a number of ways that Wawa advertises at the pump through signage and audio messaging. Finally, Rob Forsyth, president of FKG Oil Co., which operates Moto Mart convenience stores, leading the customer from the front door to the pay counter is a "journey of the mind." From the look of the store to the positioning of merchandise, everything impacts a customer's decision on whether to buy or not buy. "Either you're dealing with a customer's state of mind or you're not dealing at all," Forsythe concluded.
Rather than approaching the social media arena tactically, Alan Epstein of The Epstein Group said companies need to think strategically first, and fully understand what they want to accomplish.
For instance, The Wallis Cos., which operates 20 On the Run-branded convenience stores in the St. Louis metro area, set out three goals when it started digital marketing:
• Increase frequency and loyalty;
• Create "mouthpieces" for the brand to attract new customers; and
• Gain actionable consumer insights.
To achieve these goals, the retailer gradually added touch points including a Web site, www.ontherunstl.com, and e-mail marketing messages, according to Tracy Hughes, vice president of strategic planning for The Wallis Cos. Its content strategy across all platforms highlights the chain's key differentiators -- one being its local connection.
Migrating marketing dollars into these and other digital efforts has allowed the company to be "more targeted and select" in its marketing plan, Hughes said.
That night, NACS Show attendees converged at the Georgia Aquarium to mingle and be immersed in underwater beauty. The aquarium is the largest in the world, and measures 550,000 square feet with approximately 8 million gallons of fresh and salt water exhibits.
For continuous coverage of workshops, general sessions and other news from the Show Floor, be sure to check out CSNews' special microsite, www.csnewsattheshow.com, which covers the show from beginning to end, from new product launches at the show to educational sessions, workshops and more.