Seeking New Standards

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Seeking New Standards

DALLAS -- Ross Mirabito has three primary goals at his chain of 54 convenience stores in upstate New York: drive efficiencies, cut costs and increase profits. While he is hardly alone in pursuit of these business objectives, Mirabito is distinguishing himself these days with a thriving loyalty card program.

"Customers are looking to be rewarded for showing you their loyalty," said Mirabito, vice president of corporate technology for Mirabito Fuel Group in Sydney N.Y. The company operates Quickway Food Stores, all of which feature the proprietary Rewards Plus loyalty program. "With all of the big-box competition we're facing, we had to develop something to keep our share of the market."

Other retailers are starting to feel the same way and that's the primary reason loyalty card programs and technology standards were the among the dominate themes at the National Association of Convenience Stores 2003 Technology (NACSTech) conference last month in Dallas.

Both of these issues, when implemented with an effective marketing plan, are yielding strong results, said Raymond Stanton, chief executive of ValueCentric Marketing Group Inc. (VCMG) in Binghamton, N.Y. VCMG administers the back-end technology for Rewards Plus program, which includes tie-ins with local businesses such as movie theatres and dry cleaners.

"We have found that convenience stores can increase sales in high margin [categories] like coffee and the soda fountain by working with the surrounding businesses in their communities," Stanton said.

Standard Response
While trying to attract more customers to the store is one challenge, creating economies of scale is another. The convenience store and petroleum marketing industry has traditionally lagged behind other retail channels in producing technology standards that are utilized by all retailers so suppliers and vendors, now matter where they are operating, can communicate effectively electronically. NACS has been addressing this issue with its NAXML project.

In a NACSTech session titled "HR-XML -- What is it and What Does it Mean for You?" Chuck Allen, president of the HR-XML Consortium, said during the early standardization efforts of electronic data interchange (EDI), human resources was bypassed. This lack of connectivity between HR systems left convenience store owners with difficult and expensive gaps in their HR management.

HR-XML set out to solve this problem, providing defined standards to streamline HR data interchange. The language standard allows for communication from ?many-to-one,? rather than ?many-to-many,? reducing integration costs dramatically.

However, industry agreement remains a challenge. "Although embraced by many technology leaders including IBM, Microsoft, SAP and Oracle, it is still hard to find vendors, suppliers and end-users utilizing this method," Allen said.

Size Doesn't' Matter
Allen stressed there is a technology solution for all retail chains regardless of size.

Chip Lavigne, president of Lavigne Petroleum LLC, a one-store operator in Blue Harbor Pointe, La. said his biggest problem has been integrating the different POS systems, such as the c-store and fuel offerings, a carwash, and the Quiznos quick-service restaurant (QSR). "Integration creates ideal opportunities for retailers because it helps drives traffic to the stores," he said. Ultimately, that what is going to keep us in business."

David Seigle, president of Denver-based Bradford Associates Ltd., agreed saying simply installing a scanning system has helped manage inventory more effectively. In a seminar titled "Making Technology Pay-off in a Small Firm," Seigle said adding scanning has reduced ringing errors and provided faster service in his three Colorado stores.