News Feature | November 21, 2013

Grocery And Convenience Store IT News For VARs — November 21, 2013

By Anna Rose Welch, associate editor

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In the news this week, grocery stores could benefit from energy management technology, there is growth in the convenience store vertical, and prepaid cards could boost business for your customers — but regulatory questions about them persist. 

Energy Management Technology Available For Grocery Stores

Supermarket News discusses technological advances for grocery stores. Energy management systems are predicted to be the next in-store technology to emerge. These optimizing systems will unite control systems, track customer flow, manage lighting, and be used for electronic shelf labeling and price optimization.

C-Store Market Is Growing

According to a recent Bizbuysell Insight Report and a Convenience Store News article, small business transaction growth is up 41.7 percent in Q3 compared to Q3 of this year. The sales price of c-stores in the third quarter has increased over Q3 2012. The recession in 2008 led a lot of buyers and sellers to exit the market place. However, with improvements in the economy, more small business buyers and sellers are returning. CSNews cites an August survey conducted by BizBuySell.com that reveals convenience stores tied with Internet businesses are ranked as the second most popular purchase among prospective buyers. According to an article covering the CSPnet 2013 Outlook Leadership Conference, sale-leasebacks have become more attractive to retailers because of continuing low interest rates. Similarly, because the c-store industry is becoming more institutionalized, lenders are becoming more familiar with and aware of the industry.

Pre-Paid Card Category Shows Potential For C-Stores

Convenience Store Decisions says that the prepaid card market has been growing, however, it could become hampered by excessive regulation. An analyst from Mercator Advisory Group cites the Durbin Amendment in the Dodd-Frank financial reform in 2010 as the beginning of problems. Regulators took this amendment to mean there has to be two unaffiliated networks for both types of transactions: signature and PIN transactions. Because analyst Jackson says there is no way to put both a Visa network and MasterCard network on the same card, prepaid companies are “kind of out of luck.” With the threats of overregulation on the horizon, retailers need to pay close attention to what kind of cards their customers are looking for and buying.

What Does Online Retailing Mean For The CPG Industry?

Suley Muratoglu for Food Production Daily highlights three areas consumer packaged goods (CPG) companies should be considering when it comes to online engagement. Direct sales of the non-perishable, center-of-the-store-goods, or “planned replacement products,” are the most likely items to be purchased online. In addition to mobile investments, CPG companies can launch new products and increase engagement through a website. Overall, however, Muratoglu says CPG companies need to maintain a balance between e-commerce and brick-and-mortar retailers.

Grocery and Convenience Store IT Talking points

Mark Lin from The Motley Fool says that there are two key reasons why it will be difficult for emerging online grocery retailers to compete with brick-and-mortar retailers. For instance, the slow adoption rate and difficulties realizing cost advantages are problems facing online retailers. Similarly, the large costs required for warehouses and delivery vehicles are not entirely realistic given grocery stores low margins. Lin discusses some of the recent developments in brick-and-mortar stores’ online efforts, concluding that brick-and-mortar still has an edge over online counterparts.

Liz Webber for Supermarket News has compiled a list of tips about how a business can begin to capture mobile consumers. Webber gleaned these tips from a PMA education session on “Engaging the Mobile Shopper,” presented by Carrie Colbert. Some of these tips include experimenting with a mobile ad, building a mobile opt-in list, and creating an SMS or QR code promotion.

Supermarket News discusses some of the recent digital enhancements Kroger has been implementing, and includes insights from CEO David Dillon, about digital communication.  According to CEO Dillon, “People sometimes use the words ‘digital’ and ‘e-commerce’ interchangeably, but they are not interchangeable. The digital world is more about communicating with customers — its sharing information and moving data around. E-commerce is just a piece of the digital world.” However, while some analysts are arguing that a retailer will disappear unless it moves online, Dillon does not believe this is going to be the case. He says that, while digital interactions are convenient for customers, many still remain loyal to local brick-and-mortar stores for most of their shopping needs.

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