11 minute read
Talking Tech
from CSN-1121
by ensembleiq
Growth of third-party software, cloud-based platforms and other solutions is making key technologies more affordable and attainable for small operators
By Debby Garbato
WHILE LARGE CONVENIENCE store chains continue adding new technologies at every juncture, the industry’s small operators are no longer being left in the dust. A growing cadre of affordable, user-friendly solutions is giving them competitive advantages that historically, only large companies could afford. These include functions like data mining, critical back-office solutions, digital loyalty programs and other consumerinterfacing perks.
More vendors are aiming technologies specifically at small businesses. Growth is being driven by the increased presence of third-party software providers (including software as a service, or SaaS models), automated solutions, cloud- and webbased technologies, and “out-of-the-box” preconfigured software. Many technology services are contracted, with outside companies storing, processing and analyzing the information in a centralized location. “Small chains can now compete without the investment overload,” said Zach Zalowitz, senior director of product management at enVista Corp. in Carmel, Ind., a provider of global supply chain consulting and unified commerce solutions. “It’s become easier to onboard new technology since you don’t have to customize it. It’s instantly deployable, which has been the trend the past four to five years. Ten years ago, products weren’t as prevalent.”
Since in-house equipment is minimal, systems require little or no maintenance and are easy to use. An outside provider handles any headaches. This dramatically reduces the number of in-house IT personnel required, making products accessible to the smallest retailers.
“Products don’t require care and feeding,” said Gary Saarenbirta, CEO of Daisy Intelligence in Toronto, which offers automated software. “It’s a prebuilt package. We supply support and infrastructure. You don’t need highend data scientists. Our smallest clients have four stores. Automation technology is the new wave.”
Many of today’s small-chain technologies are better than those marketed to large chains in years past, said Matt
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Paduano, owner of Lakeport Markets, a two-store chain based in Chittenango, N.Y., and a former Nice N Easy Grocery Shoppes and Circle K executive. “I can mine data I was unable to get at big chains, where we went through the pains of upgrading servers and spent thousands on setup, integration and training. Today, we’re not investing in servers, hardware or maintenance.”
A decade ago, a back-office function such as accounting management could cost a small operator $10,000. Today, Paduano uses a web-based system from Salinas, Calif.-based SSCS, which caters to small operators. After upfront expenses, the cost is $180 monthly.
“Clicking a link connects us to a server in California. We’re not burdened with unneeded expenses,” Paduano said, noting that SSCS also handles pricebook functions.
Labor management technology is increasingly important for c-store operators of all sizes as extended unemployment benefits have downsized the labor pool, while the COVID-19 pandemic has shifted customer traffic and purchasing patterns. “Workforce management provides a daily model and, along with POS [point-of-sale], is a priority,” said John Benson, a director in the restaurant, hospitality and leisure practice at N.Y.-based consultancy AlixPartners. “Retailers are trying to mitigate pressure on labor. While it depends on the operator’s maturity, many aren’t at that level.”
Paduano’s outsourced SSCS package, however, lets him pull reports that track staff levels, market baskets and customer traffic by the day and hour. “When scheduling shifts, I can run a detailed report for yesterday or July 4. If there’s more than 40 customers, I must add people,” he explained.
Without the big corporate staffs, small operators must also manage their licenses, permits and other timesensitive documents. Lapses can be costly. Temple, Texasbased StrasGlobal, which currently manages and operates 18 c-stores for outside parties, replaced spreadsheets and post-it notes with its proprietary Compliance Safe software. The web-based SaaS program securely stores documents in the cloud and sends renewal notifications. Information can be accessed anywhere via any device.
“It was tremendously valuable during COVID-19 with everyone working remotely and government offices shut down,” said CEO Roy Strasburger.
Other technologies help small retailers manage their inventories. Daisy Intelligence’s automated software
offerings include forecasting and ordering tools. “Running inventory incorrectly is one of the biggest drains on small businesses,” said Saarenbirta.
Daisy offers promotional analysis software as well, which helps companies run promotions and determine which ones are most effective. “We’re selling answers for clients who don’t have the personnel to run data,” Saarenbirta pointed out.
Then, there is cybersecurity. Cliff’s Local Market, a small chain of c-stores in the Central New York region owned and operated by Clifford Fuel Co. Inc., worked with a third-party network security company to upgrade its firewalls and make equipment consistent across its CITGO and Sunoco branded fuel locations.
“One fuel company was demanding an upgrade. We found a solution applicable to both,” said Jeff Carpenter, director of training at the 19-store, Marcy, N.Y.-based chain. The upgrade also let Cliff’s replace analog phone lines with a less costly IP service. “What was thousands monthly is [now] significantly less,” he added.
On-site security is another concern. Las Vegas-based Speedee Mart, which has 22 locations, is turning to technology to enhance security at its sites. The retailer is upgrading cameras at its eight 24-hour tunnel car washes to deter insurance fraud.
Operations Manager Ray Johnson recounted a scenario where, at 2 a.m., a customer repeatedly slammed his already damaged vehicle into the wash, then blamed Speedee Mart. “We want full shots, including before and after they enter the car wash, [so] we can see if something came in broken,” he explained.
Consumer-Facing Solutions
The smartphone revolution, coupled with the pandemic, has raised the bar on consumer expectations. Shoppers today want — and often expect — to use smartphones to make payments and place orders for delivery and curbside pickup. But a retailer’s POS system must be robust enough to handle these transactions.
“There’s been heavy emphasis on efficient POS systems and making sure user experiences are expedited at checkout,” said Dawn Hupp, vice president of retail and enterprise technology at enVista. “I’m surprised if a place doesn’t at least have Apple Pay.”
According to the 2021 Convenience Store News Forecast Study, published in January, 60 percent of the small operators surveyed (those with one to 20 stores) already offered mobile payment in-store, while 34 percent offered it on the forecourt. Another 23 percent planned to add mobile pay at the pump this year, with 9 percent planning to add it in-store.
Paduano said he added Apple Pay and other electronic payments this past year. These new forms of payment use Verifone technology, which is provided by CITGO, Lakeport Markets’ branded fuel provider. “It’s one reason we went with branded fuel,” he said. While only 5 to 7 percent of transactions are digital, “they could be as high as 80 percent if you’re near a college.”
Contactless payment technology also grabbed the attention of Lakewood, Colo.-based HJB Convenience Corp., which operates 14 c-stores in multiple office buildings. This past year, HJB converted three stores to its new 1,000-square-foot Russell’s Xpress format, which are unmanned. Shoppers use self-checkout via PayPal or credit card; mobile payments are also accepted.
HJB President Ray Huff is seeking to further expedite the customer experience with contactless payment
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Lakeport Markets uses a web-based system from SSCS to pull reports that track market baskets, customer traffic by the day and hour, and staff levels.
technology. “We want it close to an Amazon Go store and are exploring offerings,” he said. “If there’s 10 people in line, it’s a problem since people take lunch around the same time. If they can get the coffee and doughnut and just go, they’re happy.”
Electronic Loyalty Programs
A better customer experience is also at the heart of electronic loyalty programs, which are increasingly important for c-stores in competitive markets. According to AlixPartners, 50 percent of people who shop c-stores at least three times weekly want a loyalty program.
“Loyalty lets you know where the shopper is,” said Benson. “It’s a key traffic driver, and you can use the data to better understand changing consumers.”
Compared to the industry’s large chains, loyalty programs can be a more challenging undertaking for small operators. There are startup costs, and mining and applying the data requires ongoing analysis and integration of disparate POS systems. “You need interaction of different business segments, and must be data-driven,” Benson advised. “It’s very challenging for smaller operators, who must be discriminating about investments.”
Cliff’s still uses punch cards. It also runs email and social media promotions. Carpenter wants to “bring them together to enhance functionality,” but he has not yet committed to a POS-based loyalty program. “Costs have come down, but it’s still a big investment for small companies, where people wear many hats. Analytics can help manage promotions. There are tools. It’s finding what works,” the training director said.
StrasGlobal is working on a loyalty program that would put all promotions for its single-store clientele under one loyalty umbrella. While each store would be branded, promotions would be uniform across the banners. “Having one for each client isn’t manageable,” said Strasburger.
In addition to accruing valuable data and offering targeted promotions, loyalty programs let retailers communicate with shoppers. “We’ve been dragging our feet since 2019, but during COVID-19, we couldn’t communicate to say we were open or that our staff was wearing masks. That shot up the importance of loyalty,” Strasburger acknowledged.
Jeff Hoover, director of data insights at Newton, Mass.based Paytronix, says launching a digital loyalty program is actually more attainable than some believe. Paytronix’s SaaS-based loyalty platform integrates with a retailer’s POS system. Paytronix offers a “white label app” that lets retailers execute basic programs and communicate directly with shoppers’ smartphones.
“It doesn’t have creative, custom elements but includes all the messaging basics,” he said. “We’ve done many studies. Loyalty members generally spend 20 percent more.”
Paytronix supplies reports that track redemptions, participation, and customer data. Retailers do not need an internal analyst. And Hoover stresses simplicity. “Don’t have a bunch of tiers and sophisticated marketing programs,” he said. “Establish an easy-to-execute and manage program around points and core rewards.”
In recent years, many small players have been gobbled up by larger competitors. But now, the increasing availability of affordable technologies, coupled with vendors’ direct marketing to small chains, is giving these players a competitive edge and allowing them to continually innovate. CSN
— Zach Zalowitz, enVista Corp.
