As forecourts continue to feel the pinch from escalating fuel prices and intensifying competition, it’s never been more important for retailers to retain margins, minimise waste and optimise sales opportunities.
A modern epos system designed for the forecourt environment can help retailers do just that, but while most operators have invested in highly functional epos solutions, many are not making the most of them, claims Jon Dunman, vice president of Torex Petrol & Convenience.
"Forecourts need to drive customer footfall and to do that they have to be able to look at their retail offering," he says. "If they use their epos system to its full potential it would make a huge difference to the operational functionality of their business. All retailers use the fuel element because they’re from that background but we want to encourage them to use more of the systems they’ve got because it will pay back for them."
In a bid to encourage retailers to get the most out of their epos systems and grow margins, Torex has been holding ’Profit Clinics’. The service is delivered on-site to demonstrate how retailers can vary prices to optimise their cash margin and store profitability. The training sessions also aim to give retailers greater insight into the nature of their customer base and the local competition, helping them to set more appropriate prices and cater for local preferences.
Torex says that, on average, the sessions lead to a 2% increase in profits, equating to an average of £10,000 a year for each store. Top 50 Indie George Hammond, which operates seven BP-branded sites in Kent, achieved as much as a 2.5% total gross margin improvement in one store, following a session, and estimates that a 2% average will be achieved across all sites.
"Technology on its own can’t run the business for you it’s a combination of people, process and technology," says Dunman. "We’re not telling retailers things they don’t know, we’re just encouraging them to look at things that they might not have looked at for months.
"For example, our Profit Clinics take them through the products that they’re selling at a negative or reduced margin. This can happen after a promotion when the cost price has increased but the retailer hasn’t updated their system. It’s part of the process piece and an epos system can help with that."
Charles Richards, who runs St Blazey Service Station in Cornwall, trialled the Torex training session and hasn’t looked back. "You may think you know your own shop, but you will be surprised," he says. "There are many ways in which you may not be pricing at the optimum to maximise profit. Being encouraged to think again about your customers, your local competition and your offer, you think more carefully about your pricing.
"We are in the middle of a difficult and challenging economic climate. It is all too easy to be focused on day-to-day activities and forget the basics. It is sometimes necessary to question our overall pricing strategy for the store as well as strategies for each category and individual lines. We changed our prices throughout the store and employed some of the strategies suggested. We had not kept up to date with all the price rises implemented by suppliers and found our margins on key lines had shrunk. It’s difficult to quantify the impact until a whole year has passed and we can take factors such as seasonal adjustments into account, but anecdotally our profitability has definitely increased."
Steve McLeod, chief executive officer of HTEC, agrees that the right fuel epos solution can significantly improve profits. "Originally designed to address issues such as shrinkage, stock management, labour overheads and customer service, modern epos systems now deliver a range of functions that cannot only deal with stock-outs and over-stocking but can identify purchasing patterns and interface with supplier systems enabling electronic ordering. Epos systems today move from being a simple front-of-store cash-taking device to a fully integrated system which manages efficiency, maximising profits.
"Technology is key to securing profit and slick, efficient business. With more forecourts becoming convenience stores, giving the customer top quality products and fast service becomes more and more important. Drivers want to get their fuel, grocery or food-to-go and move on as quickly as possible, which also allows for more throughput for the forecourt.
"Forecourt retailers must keep up-to-date with the latest technology, enabling them to increase profits, improve business growth and improve customer experience."
HTEC supplies a range of epos solutions for independents. Its HydraPos can be supplemented with additions such as automatic number plate recognition, outdoor payment, and HydraSmart software for multi-site retailers to help them increase operational efficiency. "This high-speed management tool provides detailed data on every single transaction, from nozzle lift to payment and sends it real time to a high-speed, resilient central server farm," explains McLeod. "All data is held centrally, reducing processing time at site level and facilitating back-office function performance over the web."
As competition in the forecourt sector heightens, promotions and loyalty schemes have become more important, and earlier this year HTEC launched a loyalty system for smaller retailers.
GemPoints is described as a simple-to-operate, low-cost loyalty solution with secure smartcard technology, allowing retailers to operate a comprehensive loyalty scheme.
Retailers can issue and redeem points, run promotions or special offers and collaborate with other retailers to maintain longer-term customer loyalty. GemPoints does away with the need for any back-office infrastructure like IT communications and is powered from a standard three-pin mains power socket and is completely self-contained.
McLeod says: "GemPoints has been well received. Forecourts can decide on their own reward an Argos voucher or a discount against other services on the forecourt such as car wash, or even in some cases percentage discount off MOT or vehicle servicing where this is offered. Smaller retailers can run a loyalty solution with the same level of sophistication that the high-street brands provide but at a fraction of the cost."
As retailers upgrade their sites, outdoor payment is moving higher on their list of considerations, and HTEC’s McLeod believes it will become more prevalent in the coming years. "Uptake of pay-at-pump will be significant for forecourt operators in the next couple of years. As fuel prices continue to rise it can increase security by making the most vulnerable pump/lane prepaid, and will increase throughput as customers in a hurry or with young children in the car do not wish to queue in the shop.
"Studies have shown that reducing queues in the store gives customers who do need to buy convenience goods a better service," adds McLeod. "Customers in a hurry, who do not normally spend money in the shop, will choose a forecourt with Outdoor Payment Terminals (OPTs). Rural forecourts forced to close at night because it is not economically viable to open can operate unmanned petrol pumps for 24 hours, 365 days a year."
Paul Milner, marketing manager of IT provider Wincor Nixdorf UK, says outdoor payment will increase customer loyalty and operational efficiency.
The company’s Namos paylane smart OPT has been designed to provide an affordable solution for retailers with entry- to mid-level requirements. Its architecture, based on Microsoft technology, is said to enable the easy integration of EFT solutions and provides flexible interfacing options to forecourt equipment and pos, providing independence from traditional pump suppliers.
"The benefits of outdoor payment are increased customer loyalty because queuing times are reduced," says Milner. "It can generate additional revenue streams and create a point of difference. Retailers can increase the customer experience through tailored marketing messages, loyalty programmes, cross-promotion with in-store offers, and real-time information such as traffic updates."
St Blazey Service Station in Cornwall has worked closely with our retail technology provider Torex to develop its new Iridium 2 till system. Charles Richards, who runs the site with his father Barrie, says: "We were asked by the software developers at Torex to work with them to enhance the user interface of the Iridium 2 till system from a cashier and retailer perspective. They asked us what we wanted from the system. I spent hours with our cashiers and working with the system myself to understand how we could fine-tune its front end to meet our needs. I then worked closely with Torex’s developers to convert our feedback into concrete enhancements within the new system.
"We wanted to give it a modern look and feel but maintain the logic and simplicity of its predecessor. We set out to make the till system intuitive, ergonomic and efficient."
CAR WASH CONTROL
PSD Codax has introduced a new car wash controller designed for Windows-based pos systems. The Codax Code Generator, which will replace standalone and earlier serial connected Codax ticket issue terminals, has ethernet connectivity so that it can be easily plugged directly into the station local area network, enabling all pos terminals to request a unique access code to the car wash, jet wash and other forecourt equipment.
The new Codax Code Generator replaces older versions of Codax where pos systems called for a serial (RS232) connection which often involved a series of daisy chain wiring under the shop counter. Eliminating the need for all the wiring under the counter and the associated serial comms boxes should improve reliability, and simplify support and diagnostics. A Codax driver can be easily installed within the POS system, and automatically requests a valid unique access code for the required wash programme or service.
The code is then printed by the POS retail printer for the customer. Graham Round, managing director of PSD Codax, says: "Codax Code Generator makes selling car wash services a seamless process. The sale is instigated directly from the pos screen, just like selling any other product within the shop. For head office the new Codax Code Generator will provide improved levels of revenue control, help to eliminate unauthorised use of the service and allow head office to analyse sales data by wash programme, to include the monitoring and analysis of customer incentives."
A comprehensive epos system will enable retailers to keep up with changes in payment legislation, and Torex has launched an entry-level system for smaller sites that don’t have the financial backing to invest in a high-end system such as its Prism 2 and Standard Prism solutions.
FuelBase is an affordable, cut-down version of the Prism software and that offers smaller forecourts a solution to changes in legislation such as PCI compliance, which was designed to ensure that all companies that process, store or transmit credit card information maintain a secure environment, and the introduction of chip and pin on fuel cards.
Torex’s Jon Dunman says: "FuelBase is an entry-level offer for those 2-3,000 rural forecourts out there who are still existing but their shop is likely to be closer to a cabin or kiosk, and might be associated with another local business such as a car dealership."
For these people their technology may have been there for a very long time and can’t be upgraded to cope with changes in legislation. "Retailers have already dealt with the first round of PCI changes but the next round is coming. Nobody has been fined for non-compliance yet but they could be, or banks could pull their authorisation.
"Some small retailers have been shielded from a lot of changes in legislation because they’re not with a major oil company but there is still a lot of pressure coming on smaller forecourts to modernise if they want to stay in business. That’s why we have created FuelBase.
"It’s a system that will help retailers comply with legislation without having to pay out £10-12,000, because their business can’t support that amount of investment."
FuelBase is currently being sold into a number of Gulf-branded sites. "It suits all retailers, from smaller to growing ones and covers the whole spectrum required," says Dunman.