Retailers View Future While Meeting Today's IT Challenges

7/25/2011

Futurist presents upcoming technology trends as execs discuss PCI compliance and operational issues

Futurist Jared Weiner gave retail information technology (IT) executives a full plate of ideas — from mobile scanning to fully immersive digital virtual convenience stores — to chew on during the eve of NACStech, the c-store industry's premier technology showcase.

Speaking at this year's NACS/Convenience Store News CIO Roundtable, Weiner attempted to give retailers a "toolkit for the future," while noting that "while a lot of this is blue sky, I guarantee a lot of what I talk about will come into your world."

In addition to Weiner, who is vice president of Weiner Edrich Brown, one of the world's leading futurist consulting firms, this year's CIO Roundtable also featured Gray Taylor, executive director of PCATS and NACS' independent consultant on card payment, data security and technology issues.

"Until the day when all human employees are replaced, upgrades to employee-facing technology are just as important as upgrades to consumer-facing technology," Weiner said. These technologies will make operations more efficient, keep workers happy and productive, and reinforce a critical customer service value proposition, he said.

Among workforce empowerment technologies, Weiner described mobile scanning as "in its infancy." Mobile scanning "brings the c-store to the customer," said Weiner, who sees pedestrians or auto passengers being able to scan or take a photo of a roadside sign, send their order directly to a c-store and then have their order waiting for them when they arrive. "This technology trans forms the employee role from order-taking to fulfillment," he said.

"A new skill set will be important in empowering employees, increasing their satisfaction and optimizing output and efficiency," he continued.

These competencies will be driven by technology, according to Weiner. "How can social media or corporate intranets be leveraged to allow for cross-company employee engagement and community? We are migrating from touchscreen interfaces to immersive counter top displays and engagement for training and/or entertainment purposes."

Some other future trends cited by Weiner were:

• Dynamic, personalized ads that can be customized in real time for each passing customer, or as he called it, "digital signage on steroids."

• Advanced technology for integration of multi-sensory experiences. Until now, most attention has been paid to visual engagement, but the focus going forward will be on olfactory engagement — the sense of smell.

• A fully-immersive c-store experience online. Companies will operate virtual stores shopped by consumer avatars, spending real or virtual currency. He noted that someone recently sold a virtual nightclub for $500,000 in real currency on the online community Second Life.

Weiner concluded that convenience stores have an inherent value proposition of time and convenience, and that this position will be enhanced by aggregated technologies that turn a c-store into a hub, offering such things as an e-charging center, work and administrative services, a napping/personal "refueling" center, and/or meeting place for adults.

In the question-and-answer period that followed, some retailers expressed concern about "environmental" factors that are delaying the adoption of mobile payments, particularly at the gas pumps where the "urban myth" persists that a cell phone can ignite fumes around a fuel dispenser. "Our legal guys have already studied this and we're confident we can handle mobile payments when it becomes available," said Charles Jarrett of Murphy Oil.

Scott Hartman of Rutter's Farm Stores, though, advised that getting an independent company like Underwriters Labs to provide a safety certification for using a cell phone around a gasoline dispenser would help alleviate liability concerns. He added that connectivity is still an issue with mobile payments unless the money is preloaded on the phone.

"The Internet is not as accessible via a mobile device everywhere as we think," Hartman said. "We may have to consider creating our own Internet hot spots around our stores to improve the customer experience."

Bringing it back to the present, Taylor discussed the many challenges faced by top technology executives today. Being a CIO is a very "thankless job," he said.

Data security is a huge financial and legal issue for retailers, who bear most of the costs for improving security at the pumps and point-of-sale, noted Taylor, who added that the U.S. government considers cyber-terrorism the No. 1 threat to the nation's security.

Most retailers doubted the United States would go to the European-style Chip and PIN smartcard payment system — a microchip-based security system to combat fraud. Most appeared to believe the country instead will move more quickly to a mobile phone application (app) rather than reissue millions of cards with the microchip technology.

Taylor also spent some time discussing the CIO's role as a business leader. "The CIO's traditional role was to centralize, control and enhance internal operational efficiency," he said. Today's CIO, however, must deal with the demands of oversold CEOs and over-exuberant business unit management, widespread data access and cost-center or zero-based budgeting.

For a CIO to be a business leader, noted Taylor, he or she must have a high profile; reporting directly to the CEO. He or she must also participate early in new business plans, not get brought in at the late stages and told to "figure out how to make it work."

BEST PRACTICES & CHALLENGES

The frustration of having too many projects, too few resources and too little time was something echoed by many of the CIOs during the peer discussion portion of the roundtable.

"As our business continues to grow, the workload demand on technology resources has been more than anyone predicted," said Jim Xenos of Love's Country Stores & Travel Stops in Oklahoma City, Okla. "We've started a large initiative to add and reorganize technology resources to align with the business needs of the organization."

Ed Collupy, of The Pantry Inc. in Cary, N.C., seconded this sentiment. Nowadays, every project requires technology, he noted, and the increased demands for new systems make it a struggle to stay current with release management.

Not having enough resources further adds to the challenge of staying on top of the newest tech innovations. For instance, Donna Perkins of E-Z Stop Food Marts, based in Maryville, Tenn., said she's one member of the company's two-person IT team. "That's not a lot of resources to do all we need to do," Perkins said. "It seems like we're constantly upgrading something."

To make do with limited resources, Jarrett of Murphy Oil has worked with the company's management to pare down the number of projects his team is working on — going from more than 300 to about 50. "Every project has to an ROI (return on investment) or a clear value proposition," he explained.

The need for better collaboration between IT and management, as well as between IT and other departments such as marketing and category management, was something mentioned by other CIOs as well. This need is particularly strong when it comes to the use of business intelligence.

"We have access to data, but the challenge is presenting it in a way our people can drill down and use it," said Douglas New of Tedeschi Food Shops. He became the company's first-ever CIO when he joined the Rockland, Mass.-based convenience retailer last summer.

Despite these obstacles, all of the CIOs at the roundtable had much to share when asked what they've accomplished in the past year, and what they're working on currently.

Many attendees had recently completed or were in the process of completing point-of-sale (POS) and back-office upgrades. Item-level inventory and computer-assisted ordering were also being utilized by several of the retailers and were on the radar for still more.

This year, more so than in past years, workforce management seemed to be on several of the CIOs' "to do" lists. Love's Xenos said the chain is looking to change its human resources system to make it more of an online self-service system for employees, while Flash Foods' Jenny Bullard said her company is launching a new employee online application and on-boarding software and along with that, a new learning module.

Both The Pantry and Quick Chek will be deploying new HR/workforce management platforms as well. For The Pantry, Collupy said phase one is implemented with taskforce management, phase two is in pilot with labor scheduling, and phase three will be time and attendance. For Quick Chek, time and attendance has been implemented, and the retailer is revaluating what the next application will be. "Looks like task management will be second, followed by labor scheduling," said Maria Fidelibus.

On the consumer-facing side, loyalty programs continue to be an area of focus. Maverik will be expanding its loyalty program, Lynn Call told the group. He said the company is rolling out a new loyalty program and will be tying ACH into its new loyalty card. With the new program, Maverik decided to develop its own backend to maintain more control.

Waycross, Ga.-based Flash Foods continues to push its ACH-based card called Go Blue, and will be increasing the cents off per gallon it offers users, according to Bullard.

Not surprisingly, another focal point on the consumer side is mobile apps. Maverik has a basic app now and plans to introduce an enhanced one around its new loyalty program. RaceTrac Petroleum, meanwhile, just launched an iPhone app in April, said Will Alexander.

NACS/Convenience Store News 2011 CIO Roundtable

This year's NACStech in Las Vegas featured the newly expanded NACS/Convenience Store News CIO Roundtable program. Top retail IT execs were treated to a two-part program.

The first focused on Technology vision & Leadership and featured guest speaker, Jared Weiner, a futurist, who provided attendees with an overview of the major technology trends that will affect their shoppers and workplace in the coming years. This part of the roundtable was moderated by Gray Taylor, executive director of PCATS.

The second part focused on Best Practices & Challenges and featured CSNews' Contributing Editor Tammy Mastroberte, who presented an advance look at the 2011 Convenience Store News Technology Study.

A record number of retailers gathered for this year's NACS/CSNews CIO Roundtable:

Retailer Attendees

Will Alexander, RaceTrac Petroleum

David Banks, Cumberland Farms

Jenny Bullard, Flash Foods

Lynn Call, Maverik

David Caudill, Thorntons

Tom Colbert, Kwik Trip

Ed Collupy, The Pantry

Maria Fidelibus, Quick Chek

J. Fleck, Wallis Cos.

Tim Hansch, U-Gas Inc.

Scott Hartman, Rutter's Farm Stores

Charles Jarrett, Murphy Oil

Avsha Klachuk, Alon Brands

Charlotte Loomiller, CITGO

James Maxey, Valero Energy Corp.

Douglas New, Tedeschi Food Shops

Donna Perkins, E-Z Stop Food Marts

Duane Statler, Rhodes 101 Convenience

Cheryl Szczesniak, The Spinx Co.

Steve White, Robinson Oil Co.

Roger Tripp, CHS Inc./Cenex

Steve White, Robinson Oil Co.

Amir Wurzel, Alon Brands

Jim Xenos, Love’s Travel Stops &

Country Stores

CSNews is the exclusive media partner of NACStech.

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