Technology’s Time to Shine

EMV (Europay, MasterCard and Visa), mobile payment and beacons are all technologies expected to dominate convenience store retailer conversations for years to come.

EMV is foremost in retailers’ minds as the liability shift deadline for in-store point-of-sale (POS) transactions is fast approaching on Oct. 1. On this date, c-store retailers that do not upgrade their POS equipment to accept EMV-enabled credit and debit cards could be responsible for fraudulent transactions.

Attendees of the 2015 Conexxus Annual Conference, held April 26–30 at the Loews Annapolis Hotel in Maryland, debated the merits of EMV based on the cost to upgrade equipment, as well as the effectiveness of the technology when it comes to thwarting data breaches.

This year’s conference was the first since Conexxus took on its new identity, rebranding last April from PCATS, the Petroleum Convenience Alliance for Technology Standards.

Jenny Bullard, chief information officer for The Jones Co. subsidiary Flash Foods Inc., offered a firsthand account of what it takes to upgrade to EMV-ready readers at the POS. Flash Foods will have EMV-capable readers in place by Oct. 1, but the total cost of the in-store implementation companywide was $200,000, she explained.

Upgrading to EMV-ready equipment was a difficult decision for the operator of 171 stores in Georgia and Florida, Bullard acknowledged, as in-store fraud averages about $20,000 per year chainwide, or about one-tenth the cost of the implementation. “It will take many years to see a ROI [return on investment] on that,” the CIO said.

Still, these costs pale in comparison to those associated with making Flash Foods’ fuel pumps EMV-ready. In order to meet the forecourt liability shift deadline of Oct. 1, 2017, Flash Foods will need to replace 384 older pumps and retrofit an additional 220 pumps. The total price tag for this implementation: $9 million, reported Bullard.

Fraud is not omnipresent at Flash Foods’ pumps, she noted, making it another tough decision whether or not to make the necessary forecourt upgrades. One reason in favor of making the outdoor EMV upgrade is consumer perception, she reasoned.

“[If we do not upgrade], will consumers stay away because of security [reasons]?” Bullard asked. “That’s our biggest concern.”

As for the effectiveness of EMV technology, Conexxus Executive Director Gray Taylor noted there are several misperceptions today. “EMV became a miracle cure. It’s now as American as apple pie,” Taylor said as he delivered the event’s opening address. “Politicians have been told it’s simple to upgrade to [EMV],” which is untrue.

Another misperception is that EMV would have prevented data breaches, such as the one suffered by Target Corp., he added.

GOING MOBILE

In addition to talking about EMV, Bullard discussed mobile payment technology, the most-used feature on Flash Foods’ GoBlue mobile app.

The biggest reason to offer mobile payment is the use of automated clearing house (ACH) payment, which remits interchange fees that are much lower than other options, she said.

Taylor believes mobile payment usage will increase in the coming years. He predicts the payments landscape will change dramatically in the future, with cash usage declining significantly. About 30 percent of retail transactions currently involve cash, but that figure is expected to drop to 25 percent by 2018, he cited.

Even further out in the future, the head of Conexxus predicts the day will come when cash will become extinct in its current form.

A HOT NEW TECHNOLOGY

Perhaps the hottest new technology that can help retailers boost the bottom line is beacons. In fact, Conexxus dedicated two back-to-back educational sessions to the topic.

Available for both in-store and outdoor forecourt applications, beacons receive shopper visit data, allowing convenience store retailers to send targeted offers to customers’ smartphones in order to increase loyalty and frequency of visits. They often cost about $25 to $30 each and are powered by four AA batteries.

Beacons are especially important at the pump, as two-thirds of customers drive off after they fill up without ever entering the c-store, noted Parker Burke, director at Gilbarco Veeder-Root, who spoke during the educational session entitled “Beacons: How Will Beacons Drive C-store Business and Improve the Customer Experience.”

Video offerings at the pump are crucial to driving in-store sales and correlate directly to beacons, which will soon become an integral part of the forecourt experience, Burke said.

“Our research shows that [when filling up their tanks], people often go on their phone to look at other things,” he said. “They are consuming other content, not your content.”

Burke was joined in the session by Brad Van Otterloo, vice president of product development for Koupon Media, who offered tips on implementing beacons.

At first, only offer targeted coupons involving private label products, he advised. “This way, you can adjust your coupon offers so you can get to your ‘sweet spot,’” the Koupon Media executive recommended. “Then, you can start looking at CPG [consumer packaged goods] offers.”

Another recommendation from Van Otterloo is to implement four or five beacons per c-store. In most cases, the entrance, coffee bar, register, pump and beer cave are the best places to install the technology.