Mr. C-store Technology

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Mr. C-store Technology

By Tammy Mastroberte

It all started with a letter to NACS. After returning to the family business following a seven-year stint at Price Waterhouse, Scott Hartman couldn't help but notice things hadn't changed much in the c-store industry since he was a 12-year-old boy stocking and cleaning shelves in his family's Rutter's Farm convenience stores.

He attended industry events, including NACS automation meetings, but felt the industry lacked the technology leadership and advancement available at the time, and critical to the c-store industry's future. Finally, less than two years after returning to c-store retailing, Hartman took matters into his own hands, and sent the trade association a letter in 1992, expressing his concerns that nothing had changed from a technological perspective.

"This was before NACStech when the automation meetings were only 40 or 50 technology people," said Hartman, now president and CEO of CHR Corp./Rutter's Farm Stores, operating 56 stores.

The letter worked, sparking a concerted effort by the association to advance industry technology and standards. By 1995, the first NACStech conference premiered, the organization had its first technology standards meeting, and the NACS Technology Standards Committee formed with Hartman as chairman.

Now, 17 years later, Hartman remains involved in the industry's technology efforts and currently serves as the chairman of the NACS Technology Council. For these accomplishments and his pioneering efforts, Hartman was voted the winner of the 2009 Convenience Store News Top Technology Leader Award.

"You hang around smart people and hopefully you learn something," Hartman said, in his typically self-effacing way. "That has always been my philosophy. Industry events and groups expose you to different people's perspectives, and it allows me to network with the best and brightest in the technology community."

Hartman describes himself as a "gadgety guy," and while pursing a bachelor's in accounting at George Washington University in Washington, D.C., he worked various computer-programming electives into his schedule because he always believed technology was "a good background to have." In fact, he could often be found in the computer lab late at night, according to his wife Cathy Hartman, who first met her husband in an accounting class at the college.

"Since I have known Scott, he has always been interested in technology," she told Convenience Store News. "When we were in our senior year at George Washington University, he would go to the computer lab at 11 p.m. several nights a week to write programs on punch cards in Pascal and Fortran."

After graduating college, and receiving an MBA in Finance and Operations from Duke University in Durham, N.C., Hartman got the opportunity to pursue his interest in technology as well as utilize his accounting degree when he took a job with the consulting firm, Price Waterhouse. Little did he know he was building a background that would help him immensely seven years later when he returned to the c-store industry.

"I was a [certified public accountant], but I liked technology, and on the consulting side [Price Waterhouse] would hire a lot of programming people and were implementing a lot of accounting systems," he explained. "They needed somebody who liked technology and could relate to the technical aspects of what needed to be done, but also be a liaison to the CEO or CFO."

It was through his work at the consulting company that Hartman became familiar with software implementation and how to solve business problems using technology, which laid the groundwork for his return to Rutter's as chief financial officer.

"In our industry you need the ability to understand the business and the information flow, as well as what technology solutions are needed to support it," he noted. "That is where I see the c-store CIO or CFO role today."

Taking Charge In-House
After lighting a fire for technology progress in the convenience store industry through NACS, Hartman began implementing solutions into his own company.

"When I came back, we were running a mini computer -- a DEC PDP 11," he noted. "It took up a lot of space to do only a little bit of computing, and we had Sweda cash registers, which were nice because they were electronic."

This was around 1990, when stores still had mechanical pumps, and didn't do much, if any, credit card transactions, said Hartman. "Your gas pump sat there, and it was separate from your register. Everything had to be reconciled. There was no scanning."

At that point, the industry was just "on the cusp of moving to server-based systems," and luckily, Hartman just completed a project at PriceWaterhouse with a c-store company setting up a back-office system.

"We eventually got rid of the PDP 11, and ended up replacing our back office accounting system with PDI, which we are still using today," he explained. Rutter's also began scanning with Panasonic registers, offering state-of-the art touchscreens.

"We selected Panasonic for its foodservice capabilities, and they had most of the McDonald's restaurants at the time," he said.

But while pay-at-the-pump was in its infancy when the company implemented scanning, the technology began to take off, and the company bumped up against the challenge of finding a point-of-sale (POS) provider with a solution.

"That was the No. 1 technology headache in the mid-90s because it was brand new technology that came out of left field and caused the POS vendors a lot of problems," he said. "Panasonic did not have a pay-at-the-pump solution, and they basically withdrew after a few years from the c-store market because of the cost of developing the solution for so many unique gasoline brands at the time."

As a result, the company switched to VeriFone Ruby POS, which it used for roughly seven years before moving to Radiant Systems, Rutter's current provider.

"Radiant had all the integration we needed plus the customer food ordering kiosks and employee touchscreens we always wanted," Hartman explained. "It's funny how it took us a decade to get what we really wanted back in the early '90s."

By 1997, the company was the second c-store chain in the industry to launch its own Web site, and continues to stay on top of the latest technology available.

"We are automated in the back office and are up-to-date on all our suppliers' back office and POS current offerings," Hartman said. "Technology to me is a building block. You occasionally have to pull a block out and replace it, but what we really want to do is put more blocks on top."

Hartman held the title of CFO, as well as vice president of operations before becoming CEO in 2000. Although Bob Sleeper became the director of information technology a year and a half ago, Hartman still plays a strong guiding role when it comes to technology use at Rutter's.

"Scott still has a lot of say in what we do because he is so involved in technology and is so knowledgeable," Sleeper noted. "Plus, it's a real interest of his. It's something he enjoys thinking about."

And with Hartman's business and technology background, it helps to have a CEO who understands the technical aspects, according to Sleeper, who likes the fact he can "talk tech" with his CEO.

"That is not the case with a lot of CEOs," said Sleeper. "It challenges me tremendously because I have to be on top of my game, and it helps because with his technical knowledge, he will think of things I didn't, and it helps the end solution tremendously."

Industry Involvement
Hartman began attending industry events as a teenager with his father, Stew Hartman, who was the CEO of Rutter's at the time, and who also sat on the NACS board of directors and committees. So when he returned to the industry, it was a natural move for him to become involved again -- and not just on the technology side.

Hartman served as 2005-2006 chairman of NACS, and while serving as the chairman of the NACS Technology Committee, ended up spearheading the formation of PCATS, The Petroleum and Convenience Alliance for Technology Standards, when the association made the decision to spin it off in 2002.

"I volunteered to help create PCATS since I was involved in starting the standards effort years ago, so I spent the first two years as PCATS chairman getting it set and on its feet," said Hartman, who still plays an active role in the organization, attending meetings and maintaining membership.

"It's a retailer and supplier organization, and the standards developed are part of a lot of the technology people are using today," he said. "Years ago, when there was no standard for POS and back office integration, everyone had to write their own, but now there is a standard out there. When a new vendor enters the market, they use the standard."

And after the NACS Technology Council reformed three years ago, with many members also belonging to PCATS, Hartman became involved again, and is the current chairman of the group.

"The Technology Council deals with the current tech needs of the industry, including NACS tech programming and other types of technology needs," he said. "It deals with the future scoping of technology coming to our industry and what we as retailers need to know."

Hartman is also in his second year as chairman of the Pennsylvania Food Marketers Association, which serves grocery and convenience store retailers, and is the chairman of the Pennsylvania-area Responsible Tobacco Sales Certification Program.

The Customer is the Future
Hartman's current interest is in what he calls, "consumer touch points technology." Rutter's installed touchscreen kiosks for foodservice ordering a number of years ago, as well as T-Flex coin dispensers, which automatically dispense the correct change to customers, minimizing wait time.

"It's all about giving customers a better experience and bringing speed to their transactions," he said. "I think the ability to touch the customer and interact with the customer is clearly where the world is going."

In his eyes, the future of the convenience store industry is about knowing customers and interacting with them -- whether they are in a Rutter's store or not. This will be executed with the integration of the marketing department and technology, something Hartman always had on his radar.

"Technology needs to be embraced by marketing and other departments," said Hartman, echoing a key point that came up in CSNews' CIO Roundtable this year when talking about Business Intelligence software (see page 45). "I think the industry needs to be integrating the marketing mentality into technology, and marketing needs to fully embrace technology as a tool. It has to be part of their everyday thinking and tools they use."

To keep his company moving in this direction, last year Hartman appointed Jeffrey Leedy, who was the vice president of marketing at Rutter's, to the position of vice president of marketing, chief customer officer.

"The integration of marketing and technology is an ongoing task at Rutter's," said Leedy, who started with the company 11 years ago as the director of marketing, before the implementation of scanning into the stores.

Leedy has seen the progression of technology at the company, as well as the increase in importance of customer focus and use of technology in marketing.

"Right now we are working on market basket analysis with our updated Radiant POS software and [back office] PDI FocalPoint," he explained.

Hartman feels there should be just as many people with marketing titles as technology titles attending industry events like NACStech, and believes this will begin to occur more over the next decade as new people enter the workforce who are "more acclimated to technology."

Being around the convenience store industry for 38 years, from a time when the stores didn't sell gasoline and hours of operation truly were 7 a.m. to 11 p.m., and seeing the "level of sophistication we are at now is fascinating," Hartman said. "We are now building stores on three or four acre lots with food and kiosk ordering, and electronic controls for heating and air conditioning."

He believed in the critical role technology would play in the c-store industry 38 years ago, and holds the same belief today. "I think c-store operators are the most entrepreneurial group out there, and are capable of changing faster than any other," he said.

However, while there are those chains on the leading edge, keeping their technology up-to-date and implementing the right systems to stay competitive, others who are not following this path may be left behind, Hartman added.

"There is part of our industry out there pushing the envelope and utilizing technology, and then another group being left behind every year. They are not investing in new pumps, POS systems and the things touching the customer -- and just trying to keep what they have working. It's a shame because the gap is going to continue to widen. Our industry has to be careful because that is where the hypermarkets are coming in with their gas marts all tied to their sophisticated systems."

But as long as Hartman's at the helm, Rutter's won't ever have to worry about falling behind.