NACStech Workshops Feature the Future of Mobile Payments

Also during Monday's sessions, driving in-store traffic and social media evolution.

May 17, 2011

LAS VEGAS - On Monday at NACStech - the convenience and fuel retailing industry€™s top technology solutions event - featured eight of 16 workshops on the most pressing industry tech issues.

Creating Sales on the Forecourt
Every convenience store operator knows the customers who come into the store. They buy cigarettes, packaged beverages and food. But there is a whole different customer base that never walks through the front door - those who pull up, fill up and pull away.

The tricky part seems to be how to capture that consumer without asking them to change their behavior and come inside. Two companies are doing just that.

According to Tim Stickney, vice president of Vendgogh LLC, gas island vending is a picture of convenience. "Forecourt sales can help build a bridge between technology and profitability."

And Vendgogh should know. The Cary, N.C.-based company offers a vending machine that retailers can place at the gas pump to sell packaged beverages. The machine integrates seamlessly with the c-stores POS. With the swipe of a credit card, the consumer can purchase gas and a drink, Stickney explained. In fact, after swiping a credit card to buy gas, the consumer is prompted two buy a drink - encouraging impulse buying from someone whose only intention was filling up.

Sticnkney added that research has shown that 70 percent to 75 percent of consumers at the pump do not enter the store. "That's huge. That's a lot of people who buy gas and nothing else," he said, adding that 95 percent of the consumers who use credit cards never enter the convenience store. He went on to explain that of those consumers who use the vending machines at the pump have said they decide where to buy gas depending on the presence of a vending machine.

Currently Vendgogh's vending machines are in two pilot locations and a third is ready to roll out in the coming weeks. Through the pilot program at WilcoHess, specifically, the company has found that consumers will use the machines and it has no negative impact on inside sales, Stickney explained. He also said the company is exploring the option to add snacks to the machines.

"This really is an untapped market," he noted. "It is a huge opportunity to sell to consumers who get gas and go."

Kirt Scott, chief technology officer at Additech Inc., agreed that capturing consumers at the pump is a great opportunity. The Houston-based company sells fuel additives directly at the pump. "We've taken a niche product and wrapped it up in technology. We have integrated at the pump and turned it into a convenience product," he explained.

But selling fuel additives to the consumer is a bit different than selling a bottle of water. Additech's product requires educating the consumer on why they need to buy the fuel additive or engine treatment, Scott said.

And that education comes through the dispenser during the four to five minutes the consumer is at the gas pump, he added.

Fueling Inside Sales From the Forecourt
There are many questions surrounding social media: how to use and what's coming next, to name a couple.

"What should be working and what the next step is are the biggest challenges," said Michael Lawshe, president of Paragon Solutions. "In order to reach the younger market you need to speak their language and their language is social media."

Norman Turiano, senior manager of fuel marketing at Wawa Inc. agreed, but added that retailers still need to be true to themselves. "I found that speaking to them in their medium is important but you have to remain who you are," he said. "It is a changing time. How to reach this generation today is to speak where they are listening and that's social media."

Having social media as a tool takes more than just having a presence, it takes having relevance, explained Brian Sevy, founder and CEO of Affinity Amp. "Use the medium but use it in a way that is valuable to your customer."

Mobile apps are becoming increasingly more popular and to use successfully retailers should offer something to the customer, explained Sevy. "Make a brand promise to the customers. If you get this app, you will get this."

But whatever it is should bring a "Wow" factor, Lawshe added. He also cautioned that the offer should not be one-time. "It has to be a continuous value because it is very easy to get rid of an app," he said.

Social media also presents a down side, the panelists agreed. For example, Turiano said the Wawa Facebook page has 683,000 "likes" or fans but the c-store chain has no idea who these people are. "We don't know who they are so we don't know how to market to them," he said. "You could be speaking to half of the people and alienating the other half," he said. "Using it to market is a tricky proposition."

But whichever social media channel a retailer embraces - Facebook, Twitter, Foursquare or a mobile app - the most important thing is to be embracing something.

"There is no single bullet. The challenge is not to limit yourself," Lawshe said. "There are a lot of people who aren't doing anything and that is bad. Then there are people who are only doing one thing and that' just as bad."

Mobile Payments - Which Technology Will Come Out On Top?
Panelists from several top technology and payment companies discussed how mobile payments via the smartphone are about to revolutionize the way consumers shop, save and make purchases in the retail space. According to Moderator Gwenn Bezard, co-founder and research director of Aite Group, mobile payment swill account for $214 billion in U.S. gross dollar volume by 2015.

Panelists Erik Vlugt, vice president of product marketing for VeriFone Inc; Arkady Fridman, business development manager of financial innovations for PayPal Inc., Stuart Taylor, vice president of product management and marketing of VIVOtech Inc., and Jim Stapleton, head of sales and account management at ISIS, discussed their activity in this arena as well as the two biggest mobile payment technologies creating the most buzz in the industry: Mobile POS and Near-Field Communication (NFC).

"We see a huge movement towards (mobile POS)," said Vlugt. "More and more merchants are wanting to be mobile and accept mobile payment."

Not only are merchants driving change but also consumers, with smartphones becoming their preferred way to pay, added Vlugt.

Taylor said he believed the simple touch-and-go conveniences of NFC technology in particular could especially transform how people shop, pay and save in the physical retail space. Benefits to merchants include rich in-store payment and merchandising solutions as well as integrated marketing and customer loyalty features to help influence in-store purchases. For example, merchants can deliver coupons, offers and rewards directly to customer smartphones, incentivizing them to patronize their physical stores.

"When you can have all of these items in an electronic form, accessible by a handset, then I think you have a much more powerful solution for the consumer and I think that€™s going to generate a lot of demand," Taylor said.

Future of Retail Mobile Technology
To truly leverage the mobile revolution, c-store retailers must have a clear mobile strategy, said Speaker Richard Crone, CEO and founder of Crone Consulting LLC. According to Crone, a good in-store mobile cross-channel enabled strategy should include integrating mobile self-service, payments and opt-in marketing and loyalty programs.

Crone explained that the mobile commerce market can be divided into three "waves":

  • Mobile banking and integrated cross-channel self-service by retailers
  • Mobile payments, both cross-channel and at the physical POS
  • Opt-in, user-defined mobile self-marketing

For retailers, mobile sets the stage for a whole new payment paradigm, said Crone, with the highest market valuations going to those stores that use their brand to serve an enrolled base of customers.

"The one who enrolls is the one who controls," stressed Crone.

Crone also emphasized that by developing their own mobile applications, stores not only create a stronger brand presence but are also able to deliver personalized location and category-specific offers and communication to their customer base. A Loyalty Locator app., for example, can deliver customized location-specific offers to profiled enrolled users, which will in turn increase revenues and advertising opportunities.

"To win at this game, retailers need to reorganize and leverage their loyalty platforms," said Crone. "The retailer€™s app is a new way to expand their contactable customer and enrolled user base. Mobile self-service, payment and self-marketing increases the value of building your own enrolled user base and riding all three weaves of mobile commerce."

Look for Tuesday€™s NACStech workshop coverage in tomorrow€™s NACS Daily.

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