A Unique Perspective

As both a retailer and supplier, CSNews' Top Tech Executive of the Year Pat Lewis has the advantage of seeing the industry from both sides

What Pat Lewis loves most about technology is the very thing that frustrates so many others in the convenience industry: the fact that you can never really master it.

The 2011 Convenience Store News Top Technology Executive of the Year considers himself a lifelong student. He strongly believes you can't be passionate about technology unless you're equally passionate about learning, and possess a natural curiosity in all aspects of life.

"The nature of technology is that it's an ongoing learning experience. You have to be willing to research things; to learn how they work; to change your behavior," said the CEO and partner of Oasis Stop 'N Go Convenience Stores and KickBack Rewards Systems, both based in Twin Falls, Idaho. "I love to learn, so technology really appeals to that part of me."

From an early age, Lewis learned that technology is something to be embraced, not feared. His parents, who were very open to adopting new technologies, bought the first Atari Pong video game in the late 1970s. In the 1980s, Lewis said, his house always had the latest video game console from the Atari to the Intellivision. Aside from video games, his family also purchased a laser disk player as soon as they arrived on the market, as well as one of the first microwave ovens.

"I've always been a big fan of technology. Even as a child, I was very interested in electronics and fascinated by computers when they came out," Lewis recalled. "My parents instilled in me a willingness to look at technology, automation and gadgets the way I do today."

For the last 25 years, Lewis has leveraged this passion for technology in the convenience store business, both as a retailer with Oasis Stop 'N Go and a supplier with KickBack Rewards.

He not only champions technology advancement within his own two companies but in the industry at large, currently serving on NACS' Executive Committee as the vice chairman of technology, and as board chairman of PCATS, the Petroleum Convenience Alliance for Technology Standards.

"Pat revolutionized loyalty in our industry with KickBack, and then set about 'democratizing' it [by] leading the standardization efforts for loyalty in PCATS," noted Gray Taylor, executive director of PCATS. "Our industry is easily the most difficult retail vertical to integrate programs such as loyalty, due to our unique systems, vendors and certification processes.

But Pat's tenacity and leadership ensured that our industry is at the forefront of the consumer loyalty revolution."

Taylor further praised Lewis, saying, "From a PCATS perspective, if Pat weren't driving loyalty standards, our industry would be a backwater to adjacent competitors."

UNEXPECTED TURNS

Having attained such prominence in the industry over the last quarter-century, it's hard to believe that Lewis never intended to have a career in the convenience channel.

In 1987, he began working part-time as a store clerk for Circle K during his first year of college, simply hoping the temporary job would help him earn some extra money. However, by the time he graduated with a degree in management and organizational leadership from George Fox University in Newberg, Ore., Lewis was managing multiple convenience stores.

In 1994, his life took another unexpected turn when his father was diagnosed with cancer. Lewis decided to quit his job and move back to his hometown to be with his parents and help out however he could. He took a job managing a convenience store with a car wash.

After his father passed away, he assumed he would be moving on, but instead his then-boss and now business partner Dan Willie approached him about forming a partnership to grow the single store into a chain of convenience stores. Lewis decided to stick around and see what kind of business they could build. They co-founded Oasis Stop 'N Go Convenience Stores in 1995.

Since then, the company has grown to include 13 Twin Falls-area locations, which are Shell and Chevron branded and feature Wendy's, Taco Time, Quiznos and Sir Daniel's Smoke Shop.

Nearly five years after founding Oasis Stop 'N Go, the partners launched an internal loyalty program as a competitive response to the aggressive big-box marketers that were entering its market with a fuel offering. The original strategy behind the KickBack Points coalition loyalty program was to establish two levels of pricing — one for the chain's price-sensitive customers and another for its purely convenience-driven, non-price-sensitive customers.

"We knew we could not win the fight by dropping our street prices in an attempt to continually match [our competitors'] prices. We also recognized not all customers are created equal and that with a loyalty program, we would not have to treat them equal," Lewis explained. "We wanted to protect our gallons and product sales by having the flexibility to improve the value proposition to our best customers, while not having to give away the farm to everyone."

It wasn't long before the KickBack Points program grew to include dozens of other area businesses. When it expanded out of state, the partners began operating it as a separate company.

"We quickly realized that the solution we created to solve our business problem could be used to help other businesses as well. As it turns out, Oasis Stop 'N Go is not the only company that needed to step up its marketing game when Wal-Mart came to town," Lewis said.

By 2005, it was apparent the opportunities to provide loyalty solutions to other retailers were too great to only do it on a part-time basis. So, the men spun off KickBack Rewards Systems as an independent software development company. They hired Willie's son Troy to take over day-to-day responsibilities for Oasis Stop 'N Go, so Lewis could focus his attention on KickBack.

These days, Lewis is still involved as a partner in the convenience store chain, but he said the majority of his time is devoted to developing retail technological solutions.

WEARING TWO HATS

Being both a retailer and supplier in the industry is a definite advantage, said Lewis. He doesn't feel he could be a successful supplier without also being a retailer.

"I could see where companies in say, software development, would have to spend a lot of time and effort doing research and focus groups, and developing the business requirements with their customers. While there are a lot of good companies that have mastered that, I'm not sure I could have," he admitted. "The way I learn to develop the solutions is from being a retailer. There have been business needs that had to be filled, so we've developed solutions to fill those."

When he's wearing his supplier cap — brainstorming some new functionality or a new product — Lewis said he always thinks in terms of his own c-stores, restaurants and customers. Because he's fortunate to have this to draw upon, it cuts the development process dramatically.

The testing process is greatly improved as well, he said, adding that nothing compares to testing a new technology tool in a store where the manager has worked for you for 20 years.

Putting on his retailer cap, the tech executive said while every c-store business claims to have the best coffee, the coldest beer or the friendliest cashiers — and he truly believes his stores do — what sets Oasis Stop 'N Go apart is its use of technology and associated business intelligence.

The chain is always on the lookout for technologies it can leverage to make its operations more efficient and profitable. As Lewis commented, "There is always a better mousetrap out there, and we are always willing to do the necessary research to find it. Sometimes that just means being open-minded when a technology provider pitches a new idea."

When Oasis Stop 'N Go finds a solution that's a good fit, the chain makes sure it is disciplined in the implementation, and that it actually uses the technology fully and properly. "In this way, we stand the best chance of recognizing the expected ROI (return on investment)," Lewis said, noting that technological advancements over the last few years have made it possible to take convenience retailing to the next level.

Integrated loyalty programs, digital marketing, social media, mobile couponing and customer-specific data mining are all examples of new technologies that Oasis Stop 'N Go now leverages, but were not even available to the industry just a few years ago.

Lewis doesn't want to give away all of his secrets, although he did say he is currently working on some new initiatives that could provide "remarkable points of differentiation and competitive advantages" for his stores. "Our company is always working on something technologically related in all parts of the business. Oasis Stop 'N Go embraces the changes and improvements that come along with well-designed technological solutions."

KICKING IT UP A NOTCH

The same is true for KickBack Rewards Systems, as Lewis is constantly developing new and innovative ways for clients to reward and communicate with their customers.

The KickBack Points loyalty program is growing at a phenomenal rate. Just this year, three major oil brands — Phillips, Conoco and 76 — signed on to participate. This will mean the addition of 10,000-plus locations and, more importantly, a national footprint for the program.

"Many opportunities are now open for exploration, and our clients who have enjoyed their participation for as many as 11 years already will see a whole new level of program performance as we grow to 30 million cardholders and more in the next year," he said.

As a coalition loyalty program, KickBack Points allows multiple businesses — potentially with different ownerships and in non-competing channels of trade — to share a loyalty program, thereby creating a powerful and very large consumer network.

The way it works is simple: a consumer picks up a member card for free at any participating location. Every time they present that card when making purchases at participating merchants, they earn reward points. Each point is worth a one-cent discount. These points can be redeemed throughout the merchant network for discounts off purchases. For example, a customer who has accumulated 500 points could take $5 off his next purchase at any participating location.

"Consumers love it because they only have to carry one card that is good at many different businesses. They also are able to build up their point balance quickly, as they may have the opportunity to use the card somewhere every day," Lewis explained.

Participating merchants like the program because it offers each of them their own fully functional and customizable program. Coalition member companies have the ability to both reward and redeem rewards, as well as access consumer and market data specific to their customers.

ADVANCING TECHNOLOGY

In the months ahead, Lewis said the industry can expect to see a lot of growth happening at KickBack. Some of the growth will be in product offerings and the technology it provides to its clients. Some will be in the rapid adoption of KickBack Points by the industry.

A smaller amount of growth is also planned for Oasis Stop 'N Go. The chain will continue to reinvest in its properties, and possibly open up to two new stores in the next year. "We will continue to have new offerings, and grow our business on a store-by-store basis," the CEO said.

Finally, much to his satisfaction, Lewis believes the industry as a whole will keep growing and improving its use of technology, particularly in the areas of point-of-sale intelligence, accounting and data analysis, security and cash management, and marketing.

"Our industry has been a little reluctant to move forward with technological innovation to help our business processes. It's changing, but we still have a long way to go," he said.

There's a flawed mentality of "if it isn't broke, don't fix it," the tech exec noted. "The problem is these operators are not recognizing that it is, in fact, broken and they could fix it. That's where the challenge lies."

His message to these operators is simple: have an open mind. "A lot of times, I see companies that have a very narrow view of technology. They view their core competency as selling products in a convenient manner, so they think the extent of what they have to do is find a busy corner with good ingress and egress, put the products on the shelves and then just wait. But what they don't see is that we can do all of those things better if we leverage technology."