Information Exchange

More than two dozen CIOs connect and share at the PCATS/CSNews CIO Roundtables

For anyone who doubts the significance of technology in the convenience store industry, one look at the slate of attendees at this year's CIO/Tech Roundtables at NACStech, presented by PCATS and Convenience Store News, would dispel those uncertainties.

More than two dozen CIOs — the most retailers in the event's history — gathered on the first day of NACStech in Nashville to discuss best practices and challenges in c-store technology.

"Now, you can't move without technology," said Jenny Bullard, CIO for Waycross, Ga.-based Flash Foods Inc., operator of roughly 170 c-stores. "CIOs are becoming more of a liaison — a business relationship manager between the business as a whole and the IT [information technology] department."

Representing some of the industry's largest and most innovative chains such as The Pantry Inc., Casey's General Stores Inc., QuikTrip Corp. and Speedway LLC, the tech leaders also delved into the role information technology will play in the convenience and fuel industry in the future.

"Our technology is going to be refocused on emerging technology for the consumer, as opposed to the company. Our emphasis and capital are going that way," explained Lynn Call of Maverik Inc., the Salt Lake City-based chain of 200-plus convenience stores. "As emerging adults become adults, they will operate differently and we have to be ready for that."

According to the CSNews 2012 Technology Study, presented to the group by CSNews' Editor-in-Chief Don Longo, retailers expect to spend more on technology this year compared to last year. Forty-two percent of respondents said they'll spend more in 2012 vs. what they spent in 2011. While their planned technology investments vary, four areas stood out in this year's study: social media; employee training; speeding up the customer checkout process; and reducing theft/shrink. (For full results of the 2012CSNews Technology Study, see our August issue.)

Following his presentation, Longo went around the room and asked each retailer to share with their peers what they've achieved in the past year and/or the projects they're working on now. The answers touched upon nearly every facet of c-store technology from point-of-sale (POS) upgrades to the creation of smartphone applications (apps) for consumers.

Among the highlights:

• Alon Brands Inc. (Dallas) — Among the company's top technology priorities are automating its fleet business and extending its business intelligence (BI) capabilities beyond sales analytics and fuel pricing analytics.
• Calloway Oil Co. (Maryville, Tenn.) — The operator of E-Z Stop Food Marts started a loyalty program and inside sales are up 15 percent after just six months.
• Casey's General Stores Inc. (Ankeny, Iowa) — Senior Director of IT Rich Schappert reported that the Midwest chain recently started offering pizza delivery at select stores and Casey's is looking into technologies to increase the stores' delivery efficiencies and enhance the customer ordering experience.
• CHS Inc. (St. Paul, Minn.) — Payment card industry (PCI) compliance remains a central focus for CHS, which has a combination of company-operated and branded sites.
• Flash Foods Inc. (Waycross, Ga.) — Aside from rolling out a new hiring and onboarding system, Bullard reported that the chain has extended its use of computer-assisted ordering to several direct-store-delivery vendors over the past year.
• Global Partners LP (Waltham, Mass.) — Having experienced a lot of store count growth in recent months, the company is concentrating on standardizing systems.
• Kwik Trip Inc. (La Crosse, Wis.) — Several projects are underway, including the rollout of a new point-of-sale system and back-office upgrade; upgraded MPLS network (Multiprotocol Label Switching) to its c-stores; and a new warehouse management system at its distribution center in La Crosse.
• Lassus Bros. Oil Inc. (Fort Wayne, Ind.) — IT Director Greg Smith said he's reaching out to the chain's store managers and foodservice supervisors to find out their tech needs so he can ensure the company's technology spending is being applied smartly.
• Love's Travel Stops & Country Stores (Oklahoma City, Okla.) — Radio frequency identification (RFID) technology is being implemented at its locations, with completion expected by September. This functionality will assist in making the payment transaction easier, reducing fuel fraud and eliminating the need for drivers to carry a card. The technology works like a toll pass on the windshield. As soon as a truck pulls into the fueling lane, the tag is validated and the fuel dispenser is authorized. When the truck exits the lane, all processing is halted so no one coming in the lane behind the truck can fuel on its transaction.
• Maverik Inc. (Salt Lake City) — Now that the rollout of a new back-office system is completed, one of the next big things will be mobile payments. Maverik has signed on to be one of the launch partners in Salt Lake City for the Isis mobile wallet.
• Murphy Oil USA Inc. (El Dorado, Ark.) — Over the last year, the company has reduced its pending technology projects from 300 to 30. Director of Retail IT Charles Jarrett said this was achieved by adding discipline to its project management process.
• Quick Chek Corp. (Whitehouse Station, N.J.) — One of the major initiatives the chain completed in the past year was an infrastructure overhaul. Maria Fidelibus, vice president of IT, said the effort has increased redundancy and resulted in better uptime.
• QuikTrip Corp. (Tulsa, Okla.) — IT and Store Operations teamed up to create a system that allows store employees to receive shifts off when a store has doubled-up staff. This new process is saving the company hundreds of man hours per week.
• Robinson Oil Corp. (Santa Clara, Calif.) — Vice President and CFO Steve White said the retailer recently automated its payroll with ADP and has launched a mobile app, using OpenStore by GasBuddy.
• Speedway LLC (Enon, Ohio) — The indirect wholly owned subsidiary of Marathon Petroleum Corp. reorganized its technology team, setting up a department of business analysts each aligned with a specific company department, such as marketing, foodservice, etc.
• Tedeschi Food Shoppes Inc. (Rockland, Mass.) — Replacing its antiquated help desk system was one of the chain's recent technology accomplishments. The company went from an all-telephone, IT-only model to an enterprise model supporting web-based access. Currently, more than 60 percent of all IT requests and virtually 100 percent of all store services group requests come through the new web-based portal.
• The Cumberland Gulf Group (Framingham, Mass.) — The New England c-store chain recently partnered with PayPal to accept payment at the pump through a new SmartPay mobile app. Although it started out as a pilot program at select Cumberland Farms locations in Massachusetts, the program was expected be rolled out across the state by June 1, with the rest of the chain to follow.
• The Pantry Inc. (Cary, N.C.) — On the technology side, the retailer automated its POS change management process and made it fully deployed and executed from headquarters. On the business side, The Pantry introduced market basket data to its merchandising department. Data for all 1,600 stores is now captured in a central database.
• Thorntons Inc. (Louisville, Ky.) — The chain's facility technicians are now equipped with iPad tablets that enable them to organize and work open tickets more efficiently while in the field. This initiative was part of a goal to shave $1 million off the maintenance budget.
• Valero Retail Holdings Inc. (San Antonio) — James Maxey, vice president of retail systems, reported that the retail division of Valero Energy Corp. is in the midst of rolling out PDI/Enterprise store-level business management software.
• Vintners Distributors Inc. (Fremont, Calif.) — The company, which primarily focuses on developing branded sites within California, implemented a new time and attendance system for human resources to use and made its hiring process paperless.
• WilcoHess LLC (Winston-Salem, N.C.) — Its biggest win over the past year, according to CIO and Vice President of Info Systems Nick Spann, was the launch of a coalition loyalty program with regional supermarket chain Lowes Food.

COMMON THREADS AMONG IT CONCERNS

Based on retailer feedback from the 2011 CIO Roundtables at NACStech, this year's May 21 event featured a slightly different format that allowed for more open discussion among attendees. Following the group presentation by Longo, participants split into two separate discussion groups. These interactive exchanges were moderated by Dae Kim, vice president of research for NACS, and Michael Davis, NACS' vice president of member services.

In the two concurrent group discussions, three questions were posed to attendees:

• What keeps you up at night?
• Where do you see your business going in the next three to five years?
• What role do you see technology playing to support those changes?

The tech executives in both groups cited many concerns that keep them up at night. Topping the list were PCI (Payment Card Industry) requirements; integration of systems when acquiring companies; keeping IT teams motivated; loyalty programs working well; prioritizing projects within available budgets and resources; predicting changes to credit card fees; and government mandates.

"Everything is getting more connected, so there are more issues," said Jana Multhaup, CIO at San Ramon, Calif.-based Chevron Products, Americas.

Retail technology is ever-changing and getting more complex, the retailers explained. This presents a constant problem for the CIOs and their IT staffs because just when they get one thing under their belt, a new technology, software or requirement comes down the pike.

"The sheer complexity and cost of IT software and hardware is what keeps me up," said Tom Colbert, director of IT at Kwik Trip. "IT is definitely not getting easier, but [rather] much more difficult — and more difficult to acquire the needed people resources."

Convenience store industry CIOs have to contend with things outside of their control as well, such as getting the adequate bandwidth to fully operate their businesses, according to Varish Goyal, president of Vintners Distributors. "We struggle [because] you have all these tech upgrades and can't get the right bandwidth to the store," he noted.

Aside from the nuts and bolts of the infrastructure, CIOs need to deal with the human capital aspect of the industry, too. As employees become more tech savvy in their home lives, they think they know how to deal with technology at work. And even more of an obstacle for those who don't is the lack of enough hours in the day to learn, the executives agreed.

Government regulation and trying to anticipate what costly mandates are coming next is also of major concern. "They just never end," added Marty Calloway, president of Calloway Oil Co.

Regardless of these issues and countless others, a c-store retailer's IT department needs to be ready at all times. Technology — not just on the store side, but also the customer side — is changing faster than ever before and there's no time to have a sit-back-and-wait attitude.

"I think we are coming to a crossroads in the next few years on how we communicate with our customers," said Call of Maverik. "Where do we invest? Where is the consumer going to be? It will really be spelled out in the next few years, but are we going to be ready for it?"

PREDICTING THE FUTURE

As for the next three to five years, mobile payments were singled out by many of the retailers as a technology to watch. In addition, Europay, MasterCard and Visa (EMV) integrated circuit card standards, alternative fuels and overall store growth via acquisitions were mentioned.

In regards to how technology will support these changes, several of the CIOs said that as their companies grow, rapidly advancing technologies will be at the front and center of everything they do. Growth cannot take place without advancing technologies, they stressed.

One way to stay a step ahead is to keep a close eye on trends: social, technical, economic and political. For instance, the proliferation of smartphones and everything that comes with it — mobile payments and direct access to the Internet — is changing the game and will continue to do so.

"Consumers are connected 24/7 and have access to unlimited research," Call said, adding that every cell phone will soon be a smartphone or at least have the communication capability.

"Consumers almost expect you to send them a coupon through an app or a secret word on Twitter for a free cupcake," Goyal said. "That is where loyalty programs become very important."

Going forward, the trick will be figuring out if those mobile efforts are bringing in new customers or just giving money away to existing ones, according to the retailers.