9 Things You Missed at the 2018 Conexxus Conference

CHICAGO -- The theme at this year’s Conexxus Annual Conference was clear: Disrupt your business or be disrupted.

Not only are competitors such as dollar stores and online retailers increasingly encroaching on the convenience-store retailing business but a new definition of convenience is rising among consumers, and that will affect their expectations of c-stores.

“I don’t think Amazon is coming after my business, but I think they’re training consumers to shop differently,” said Kevin Smartt, CEO of Kwik Chek, Austin, Texas.

From a rock ‘n' roll star turned missile defense expert for the U.S. military to a representative from the Illinois state government explaining the potential of blockchain for c-stores and American society, the speakers at the technology-standards conference, held April 30 through May 3, embodied this push to think differently about the industry.

Here are nine highlights from the 2018 Conexxus conference …

Jeff “Skunk” Baxter, former Doobie Brothers guitarist, has a new gig consulting with the U.S. government on missile defense, and he found time to speak with Conexxus attendees about the importance of thinking differently to tackle tough problems.

In a speech that dropped names from movie stars to four-star generals, Baxter urged attendees to “war-game” potential conflicts as the military does in order to decide strategy.

Baxter said there are three teams in a war game: the blue team (the good guys), the red team (the bad guys) and the green team (the rest of the world).

He suggested business leaders ask themselves tough questions and try to game out their responses, such as: What if Jeff Bezos bought every U.S. utility company? “The best generals win the battle before they enter the field,” Baxter said.

The former rocker also dropped plenty of quotes from Sun Tzu’s The Art of War. “The eagle kills the dove not by its strength, but by the angle of its strike,” he said, emphasizing the importance of strategy, whether in business or in war.

The presentation ended with a raffle for a red Stratocaster on which Baxter wrote a note on for the winner.

Conexxus hosted a panel of industry experts, including Stephen Hines, chief technology officer for the Parker’s convenience-store chain; Donna Perkins, pricebook manager for Calloway Oil Co.; and Aaron Simpson, chief marketing officer for the Maverik chain.

Perkins talked in detail about the eventual rise of Gen Z and how it might affect the workforce, pointing out that Gen Z will account for 40% of all consumers by 2020, and that 60% of people in this age group want their jobs to affect the world. Perkins also outlined difficult positions small retailers can easily find themselves in. “This is what it’s like as a small retailer: Either they’re going to buy you, or they’re going to beat you,” she said.

Simpson talked about technology and marketing and shared best practices for both. He said if a chain is thinking about creating its own tech solution for any part of its business, it should consider if the company might be better served by hiring someone else to build it. “Do you really need to build [tech solutions]? Is it really going to be something completely unique to you?”

Hines talked about how technology is surrounding operations, whether in the hands of employees or in equipment retailers use every day. “I am a big fan of giving mobile [phones] to the employees,” he said. “Don’t think of it as a cellphone. Think of it as a mobile device connecting you to them.” Hines added that Parker’s is testing self-checkout. “I personally think it’s the future,” he said.

Terry Mahoney, partner of consulting group W. Capra, shared the results of a fourth-quarter 2017 survey in which about 20 petroleum retailers covering 30,000 to 35,000 gas stations reported on their progress implementing indoor and outdoor EMV (Europay, Mastercard, Visa) chip-card acceptance.

Mahoney said 90% of respondents said they would require indoor EMV, while 20% said they were done implementing and 30% were just getting started. A full 60% said they are implementing Quick Chip, which allows customers to dip and remove their EMV cards within about two seconds.

Outdoor, however, is not progressing as smoothly due to the lack of availability to software and qualified technicians. While 70% of respondents said they would begin implementing outdoor EMV this year, 20% indicated they would not be ready by the 2020 deadline.

“Be wary,” Mahoney said. “Late adopters will become fraud destinations.”

“Customers have this paradox of choice, and the only thing they care about is time,” said Vish Ganapathy, managing director, retail technology leader, for Accenture.

Ganapathy walked attendees through a host of disruptive forces that could either shake up or revolutionize the c-store space, including the rise of artificial intelligence and its potential to improve store operations and the struggle of getting actionable insights from big data.

He noted that 1,700 of the 2,100 brick-and-mortar stores that opened last year were all Dollar General, Dollar Tree, Family Dollar or grocer Lidl. “And every one of them are your competitors,” he said.

Meanwhile, industry-changing tools such as biometric scanning and automated retail concepts such as Robomart, the mini grocery-store concept on wheels that comes to customers, are quickly changing the retail game.

“You should be building your business as a software business,” said Gunter Pfau, founder and CEO of Stuzo.

Pfau shared a video outlining Stuzo’s vision of the suburban c-store of the future in the year 2025. The video showed a futuristic-looking corner store with alternative-fuel pumps, a drive-thru with a lane for autonomous vehicles, banking and dry-cleaning services inside the store, and payment and identification using biometrics.

He explained that Stuzo is seeking joint partnerships with retailers to realize this store-of-the-future concept, prioritizing software-driven retail and the idea of convenience-as-a-service. Stuzo also aims to work with retailers to help them launch apps, point-of-sale systems and other software-based tools to streamline their business.

“We’re outsiders coming in with a very different perspective of your industry,” Pfau said.

Andrew Robinson, appointed president of Veeder-Root, said the internet of things has the potential to revolutionize c-store operations.

“Wouldn’t it be great if I had a way to pull together lots of different information that told me exactly what I needed to do. More importantly, what if it could do it for me?” he said.

Robinson said that every part of the store will be connected by 2020, payment systems will be more advanced and computers will have the ability to handle even greater volumes of information. He said that the industry is only at the beginning of internet of thing's potential, and that the technology may provide a way to get around legacy infrastructure.

Chad Kobayashi, retail technology manager of Maverik, described when someone tried to install a skimming device on a store pump. A store employee noticed, called the authorities, and when the police arrived, they confiscated a slew of skimming supplies and a list of 100 more stores, many of them Maverik locations, the culprit was planning to hit.

This was likely a professional skimmer hired by a black-market organization to target stores. Mark Carl, CEO of ControlScan, explained to attendees that many of the data breaches seen in the news are perpetrated by groups like Fin7, a syndicate of professional hackers. “These guys go after any kind of financial information they can get,” Carl said.

They’re not just in the business of skimming, either. Anything from malware to phishing falls within their goals. “These are very sophisticated individuals, and there’s a whole bunch of them. You might ask how big they are. We have no idea, but they’re bigger than you are,” Carl said.

Carl cautioned that c-stores can easily fall victim to these groups, and warned attendees not to forget about the inevitable public relations fallout if any consumer data in their care is compromised by criminal groups such as Fin7.

Simon Stocks, chairman of IFSF Ltd., a tech standards group for fuel retailers, warned that U.S. retailers could potentially run afoul of the European Union’s (EU's) soon-to-be-implemented General Data Protection Regulation (GDPR).

GDPR comes into effect May 25 this year. In essence, the regulation requires any organization that handles personal information of EU consumers online to get permission from consumers before they collect or use their data.

“The bottom line is you must have consent. Without that consent, you have no right to have that data,” Stocks said.

While the regulation is not likely to affect U.S.-based retailers, Stocks warned that businesses should assess their data on anyone from the EU. “Do you hold any data on EU citizens today, and are there any direct implications on you or your business?”

David Ezell, software architect for Verifone, was joined by Jennifer O’Rourke, deputy director of the office of entrepreneurship, innovation and technology in the Illinois Department of Commerce, to talk about blockchain and its potential for the industry.

At its core, blockchain is an unalterable, public and crowd-sourced ledger of information used to ensure accuracy of records. Click here for more on blockchain.

O’Rourke explained that blockchain could change the way we identify ourselves when purchasing age-restricted goods. It could also digitize birth certificates, help secure health and academic credentials and more. She pointed to online blockchain and cryptocurrency source Coindesk as one example of a source to follow to learn more about blockchain and its potential.