A Technology Template for Retail Petroleum

By Tim Tang

In this age of digital transformation, convenience stores are not merely competing with each other, they are competing with the escalating consumer expectations set by the likes of Uber and Amazon. The same technology revolution, which has redefined the customer’s understanding of “convenience,” may also be effectively employed by convenience store (c-store) operators seeking to “surprise and delight” convenience-oriented consumers.

The difficulty with technology is that there are so many options, which are evolving so quickly. Decisions can easily become overwhelming for the business owners, who need to focus on the business of selling fuel and food. In this situation, a technology template provides structure for understanding the core categories of technology and enables business owners to make appropriate executive decisions.

User Technology

User technology may be divided into employee-facing and customer-facing solutions. Since the customer experience will never exceed the employee experience, it appropriate to start with employee facing solutions. The goal is to simplify the role and augment the capabilities of the employee to increase their ability to succeed at delivering on the brand’s promise. Technology strategies should be designed to compensate for the realities of a high-turnover industry by accelerating the on-boarding process of new employees and maintaining the store’s ability to exceed the customer’s expectations when the employee leaves.

Customer facing solutions describes those technologies which impact the customer experience. These technologies should be designed for customers with varying degrees of digital competencies. Such solutions should be intuitive for those who are not comfortable with technology, yet not waste the time of a digital native. Such solutions must maintain enough agility to align with the dynamic needs of a broad customer spectrum.

Many major oils are pursuing mobile payment at the pump initiatives to not only reduce the friction of making payments, but to also engage the customer at the pump with personalized offers to encourage store visits. For those who rely on the customer’s cellular internet access to support the transaction, the digital experience is dependent on the quality of the customer’s carrier coverage. If a customer visits a store which has poor coverage, she may become frustrated by long transaction times which occasionally fail to complete. The only way to achieve a consistent mobile experience at all locations for all customers is to remove the dependency on the cellular coverage by deploying Wi-Fi at all stores.    

Cloud/Internet of Things (IoT)

The combination of the customer’s escalating expectations, hyper-competitive market trends, and rapidly evolving technology has created a perfect storm, which is driving business applications into the cloud. With the cloud, c-store operators have access to entire ecosystems of new solutions by providers who are aggressively aligning to the needs of the industry. 

As long-time users of remote sensors, such as tank monitoring and freezer temp sensors, the convenience store industry use of Internet of Things pre-dates the Internet. However, in this new digital age, operators will substantially expand their use IoT to improve operational efficiency, protect the customer (e.g. food safety monitoring) and create compelling customer experiences.

As the fuel pump providers update their pump technology (e.g. advance analytics, digital media, and new payment solutions, etc.) C-store operators will have to redesign their store infrastructure to support mission critical transactions, routine software uploads, and integration with cloud application providers.

Network Security

In the event of a network breach, the affected business is presumed guilty until they can prove their innocent. The goal of the subsequent forensic investigation is to determine if a reasonable effort has been taken to protect the customer’s data. In the event of a breach, the assessor responsible for PCI compliance certification will not be the ones handling the forensic investigation.  The credit card companies will send their own agents, who will make their own independent assessment regarding PCI compliance. The investigators are not employed by neutral third parties, but rather by the credit card companies, who have a financial stake in the outcome.  

Network security is an evolving discipline. Attackers are now employing AI-based algorithms. C-store operators must make continual investments to reinforce their security posture. It starts by hiring the appropriate talent and services, either internally or externally, to provide the necessary protection for the business. In a world where perfect security is not possible and employees are often the weakest link, the business must be prepared for a breach. The sober reality is that many organizations have already been breached. They just don’t know about it, yet.

Digital Infrastructure

While the Cloud and IoT solutions may create new competitive advantages, they also increase the business’s dependence on the network. Network outages and periods of congestion are no longer merely inconvenient, they can interfere with an operator’s ability to transact business (e.g. redeem loyalty rewards.) 

Success with the Cloud and IoT requires a strong network, both inside the store (e.g. Wi-Fi) and outside the store (e.g. Internet). For brands with large regional footprints, additional consideration must also address the reality that 30-40% of the locations will likely be limited to low-speed broadband connections.   

Today’s SD-WAN (Software Defined Wide Area Network) solutions vary widely in their ability to manage low-speed connections and congestion. Some have very elegant methods of detecting and compensating for network congestion, while others are only able to crudely switch traffic flows from one circuit to another circuit, which does not solve the problem if both circuits are congested. Some SD-WAN solutions can support c VoIP and employee video training, with lower-cost connections, while other SD-WAN solutions may require investments in higher speed and higher cost circuits. 

An effective way to test the merits of SD-WAN solutions is to stress test application performance by creating congestion with traffic generators. In the real-world, network congestion is and always will be a key challenge.

Summary

Today, technology plays such a critical role in defining the employee and customer experience. Business executives are making challenging technical decisions with serious consequences. A technology template provides structure for developing a comprehensive strategy, including customer/employee facing technologies, Cloud and IoT, Network Security, and Digital Infrastructure.

If you happen to be at NACS, please visit Hughes at Booth #6577