Investing in the Right Technology

How should small operators decide where to spend their precious dollars?

By Tammy Mastroberte

WITH ALL THE advancements in retail technology, it’s hard to imagine a convenience store without any tech. Whether it’s the point-of-sale (POS), back office, security cameras or tools for human resources, there are more options today to automate the store and improve business efficiency and decisions than ever before. And while the large c-store chains have bigger budgets and more options to choose from, there have been major advances made in technology specifically geared toward the industry’s single-store owners and small operators.

So then, how should a small operator decide where to spend their more limited budgets?

“Calculate the return on investment (ROI) before investing in a technology,” advised Steve Morris, president of Retail Management Inc., based in St. Paul, Minn. “How much time or money is this going to save me? Will I be better able to report what is going on in the store? Will this technology open doors for me to other programs? Will I be able to access rebates or other marketing funds that were not available without it?”

At Rhodes Convenience Stores, a 30-store operator based in Cape Girardeau, Mo., there are always open discussions happening around technology, and the company tries to think “outside the box,” according to Duane Statler, vice president of information technology. The company does its research and tries to quantify where technology can help them save in some way.

“We look at the benefits a technology can provide, like helping our team and making their job easier,” he explained. “What are we gaining from it? From a business standpoint, will it make me better and efficient? Then, we look at the cost and say, ‘Is this worth it to me?’”

Although vendors will often share figures for what a chain can expect to save, Statler does not rely on this information to make a decision about investing in new technology. In fact, he has not looked at any new technology recently that

offers a large money savings upfront, and so the chain does not use this as a main indicator to purchase.

“I haven’t looked at anything in a while that shows we will save $50,000 if we spend $200,000. It’s more about if it’s going to help make the business better. It has to have an end of making us better one way or another — better for customers and better for our employees. Then, we can decide if we can swallow the cost,” Statler said.

Budget should be considered along with strategy depending on how large the chain is and how rapidly it plans to grow in the future, noted Peter Rasmussen, founder and CEO of Convenience and Energy Advisors, based in Boston. If there is a growth plan in place, chains should start by deciding if they want to adopt a less expensive technology option and then invest in bigger, more robust technology as the growth occurs, or if they want to invest in the larger option upfront.

“A smaller chain or one-store operator can start with a less expensive option that offers less features, and then upgrade as time goes on if they grow,” he said. “It all depends on the strategy and what they want to get out of it.”

Essential Technologies

Regardless of chain size, having a POS and backoffice solution is a necessity in today’s c-store world. The ability to pull reports from the POS to see what products are selling and how much, and also having the ability to reconcile that with ordering is “business 101,” according to Morris. “It’s so essential, I wouldn’t open the doors without it,” he stressed.

If a single store or small chain is not selling gasoline, or offering unbranded fuel, there are a lot of economical options when it comes to a POS, including some that run with an iPad, Rasmussen pointed out. However, if a store or chain has branded gasoline, they often have a list of approved POS vendors to choose from, which is usually NCR, Verifone or Gilbarco, he explained.

“Rapid POS is iOS based, but doesn’t work with branded gasoline,” he said. “If you are not selling gas, you have a lot of other options and the barrier to entry is easier. Also, for backoffice systems, it’s important to choose a solution you can build off of that is plug and play to integrate with other things in the future.”

One option to consider linking to a POS is security cameras. Many top POS vendors will integrate into DVR security systems to link sales transactions with video so that stores can monitor for internal and external theft, according to Rasmussen.

“Start with the fundamentals, making sure it will easily connect to other technology if you plan to grow bigger,” he said. “The POS and back office will give you the facts and data to make the right decisions. Otherwise, you might think you are doing well or that you have a problem when that isn’t the case.”

Considering EV Charging? Investigate Now

Electric vehicle (EV) charging is gaining steam in some states and no matter what size a convenience store chain is, or if it’s a singlestore owner, EV charging is something to watch, especially if stores are near a highway, according to Peter Rasmussen, founder and CEO of Convenience and Energy Advisors, based in Boston.

In fact, it’s actually something to investigate now because funding is being made available throughout the United States. On Nov. 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act, which included significant funding for EV charging to the tune of $5 billion going directly to each state to deploy EV charging.

“The federal allocation applied a percentage to each state, and the state had to submit plans by Aug. 1 to the federal government so funding would be released, and retailers and other locations could begin to apply for the funding,” Rasmussen noted.

He encourages retailers of every size to look into what is available in their state through the state’s Department of Transportation and take advantage of the funding while it is available.

“This funding removes the barrier to entry right now and while gas will be important for a long time, if you are not thinking about EV now, it could make you irrelevant in the future,” he said. “You could also miss out on the opportunity to have a lot of the infrastructure funded.”

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accessible and doable — and, in some cases, can even be outsourced to a third-party if a company does not have an internal information technology (IT) department, Rasmussen said.

It’s also important to check with vendors about how they support you when something goes wrong to avoid downtime, especially for the POS. “When something breaks — because it will — what is in the service level agreement in terms of repair, replacement and remedy?” Morris posed. “Will they respond in 24 hours or 36 hours? Also, what are the upgrade costs and what schedule does the vendor have for upgrades? These need to be looked at upfront.”

Several years ago, the Rhodes chain went through a process to eliminate downtime with a network failover system, so if a store’s internet provider went down, they would still be able to process credit cards. This is definitely something to consider when investing in technology to keep a store and chain running, advised Statler.

“This is a necessary setup we went through because years ago, cash was king and credit was 30 percent of the business. Now, credit and debit is 75 percent,” he noted. “We have technology that automatically switches us to cellular if the Internet goes down, so our downtime is nil. It’s something all the big chains have now.”

The equipment comes with a one-time fee of roughly $500, and then companies can get failover SIM cards from AT&T or Verizon for $10 a month. If the internet is down for a couple of days, it might cost around $30 in SIM cards, which is “nothing compared to 800 mad customers who want to use credit or debit cards,” Statler said.

Next-Level Upgrades

While security cameras are essential for any store to monitor theft, upgrading them to a higher quality and integrating them into a POS is something all c-store chains should consider as they grow. This integration allows a store to track voids, refunds and other types of internal theft.

“It’s not that you can’t open the doors without it, but it’s nice to have and can offer peace of mind when it comes to tracking theft,” Morris noted.

“We look at the benefits a technology can provide, like helping our team and making their job easier. What are we gaining from it? From a business standpoint, will it make me better and efficient? Then, we look at the cost and say, ‘Is this worth it to me?’”

— Duane Statler, Rhodes Convenience Stores

into fraud analysis, including cameras that can read license plates to catch theft. While single stores and small chains don’t always want to spend the money, Statler maintains that it is important to put security first and invest in automated systems to monitor for theft and fraud.

“As we have grown, we try to think more like criminals to see how people will try and steal, use fraudulent credit cards, steal loyalty points, or break into our computer network,” he said. “There are companies that can help single stores and small chains with managed services.”

Another technology to consider, even for a small chain, is finding a company to handle payroll that also offers employee self-service options. While large chains will often invest in sophisticated workforce management systems, there are many payroll providers that offer mobile apps to smaller chains that employees can utilize for time and attendance, swapping shifts, and more.

While smaller chains don’t need the “Cadillac version” of payroll integration, wage and hour compliance or new employee onboarding, Morris noted that many payroll providers can offer simple solutions at affordable rates.

“The workforce is demanding access to see their pay, swap shifts and log in using an app. For the single stores and small chains who struggle to keep up with the big guys, they now have something available to them on a smaller and more affordable scale,” he said.

Rhodes Convenience Stores uses Paycom for its full human resources system to manage employees, and is working with the vendor to improve its labor scheduler, said Statler. Through the system, the company’s employees can manage their benefits and insurance selections and maintain time approval and paycheck approval via a mobile app.

“We started with ADP, but we grew from 400 employees to 950 over the past 10 years and wanted to find a solution that could do onboarding, performance reviews, training programs and offer the selfservice, so we are using Paycom and their mobile app,” he explained. “For the younger generation, their phone is their way of life and it’s natural for them to get their schedules through a mobile phone and make shift changes.”

The next steps for the retailer are to start automating fuel pricing changes and its digital menuboards to save employee the time overseeing and making these changes at the store level.

One of the most important things to be aware of when choosing new technology is to not “overcomplicate things,” Statler said. “Overall, you want it to be simple to support.” CSN