In a speech covering his tenure this past year as NACS chairman, Jay Ricker, president of Ricker Oil, Anderson, Ind., spoke of the difficulty and profits lost during the BP Gulf oil spill. While not the 60% drop that some retailers experienced about a decade ago with the Exxon-Valdez incident, the losses Ricker experienced, [image-nocss] he believes, were mitigated by an active engagement with the media.
"I truly believe we have changed national conversation as an industry," Ricker told about 3,000 retailers, suppliers and attendees present at the opening general session. "It's our job to communicate the industry's voice before someone else does; and this year, I've seen hundreds of positive stories on our industry and fewer negative."
Looking back the financial reform legislation that President Barack Obama signed earlier this year, Ricker described his part in the NACS effort on Capitol Hill as being "intimidating" but rewarding. "Together we can make fewer bad things happen," he said. "And I know we can make good things happen like card-swipe reform.
The reform addressed debit-swipe fees and will create a set of standards for "reasonable and proportional" fees, said Hank Armour, president and CEO of the Alexandria, Va.-based NACS of the fight that took a decade. "The amount of money taken last year [from the industry] was $7.4 billion and in the past five years, it's been $35 billion. That's astonishing and it's outrageous."
The reforms will require several things:
Have the Federal Reserve issue standards for reasonable and proportional rates. The Federal Reserve must also write rules on nonexclusivity, meaning debit-card issuers must offer retailers at least two processing networks as a way to introduce competition. For debit transactions, retailers can discount for different methods of payment, initiate limits not to exceed $10 on transactions and offer cents off per gallon, a fixed-amount percent discount or loyalty points. Retailers can charge different fees for different card brands, like Visa or MasterCard and with the different types of rewards program within a card brand. But Armour also issued a word of caution, saying the battle wasn't over yet. "We need to make sure the legislation means real change. We're working with the feds to make standards that will produce significant change. Banks will fight us and pull every trick. And there's still credit fees."
Also during the opening session, NACS brought on Stew Leonard Jr., president and CEO of Stew Leonard's, a chain of four high-end, 110,000-square-foot food stores based in Norwalk, Conn.
Called the "Disneyland of Dairy Stores" because of the experiential nature of its stores, which includes costumed characters, scheduled entertainment, petting zoos and animatronics throughout the stores. The company also has received acclaim for excellence in customer service and quality. In 1992, Stew Leonard's earned an entry into The Guinness Book of World Records for having "the greatest sales per unit area of any single food store in the United States."
Leonard told the audience that his competitors are coming up with small new ideas that cumulatively spell a larger threat. "These places niche you out all the time."
To combat the pressure, Leonard said he continually seeks to engage customers in communicating their wants and also looks to improve upon customer service. An example he gave was selling strawberries. Where they once sold them in packaged units, customers said they preferred "loose" strawberries so they could pick and choose. Despite the mess and additional waste, sales tripled.
Leonard said being nimble and trying new things constantly is key. "The big don't eat the small," he said. "The fast eat the slow."
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