The Petroleum Convenience Alliance for Technology Standards (PCATS) was founded in September 2003 to continue the development and maintenance of standards work initiated under the NACS Technology Standards Project. PCATS’ mission is to develop, maintain and assist members in the implementation of a variety of technology standards. For example, a major focus is on setting communications standards between the common hardware and software used by the industry in transactions with its customers (point-of-sale and back officer, for example) and its logistical relationships with its suppliers. With over 170 members, the group’s membership represents more than 22,000 convenience stores. Membership is open to any petroleum marketer, convenience store owner/operator, other retail channels, or any of their suppliers or vendors.
NPN Magazine interviewed PCATS Executive Director Scott Wood for an update on the organization’s efforts.
NPN: How would you characterize the state of integration and standardization in our industry?
Wood: There are areas where we are fairly mature in standardization, and there are a lot of areas where we are very weak. For example, we have some really good work and met some great strides with our point-of-sale and back office integration and getting the standards out there. The same thing applies with our retail merchandise and the data movement between the warehouse distributors and such and the back office. But some of the original principles we had in terms of device integration have not taken hold quite as well as we would have liked. Now we've got it, but we don't have the implementations yet and we are really pushing the retailers and vendors to start doing those implementations.
NPN: What's required to really push the next step through?
Wood: The focus has to be on the retailers. If you were to ask the vendors about standards a lot of them would prefer to keep things where they are because they have their proprietary solutions and it keeps markets closed. But when you really get down to it the retailers are the ones that want the standards and they need to be the people that push this and get the vendors on board. The interesting thing is that if you look at the POS/back office experience, in the early days a lot of those vendors would have probably said no but the retailers kind of forced the issue. Now they really like it. While it may in some ways reduce the barriers of entry to their competitors, at the same time it also opens up markets to them that they would not have had otherwise. And it also absolves them of the burden of trying to figure out how things should go together. It simplifies development and it even enables them to work with partners that they might not have been able to work with otherwise.
NPN: How much support are you seeing from the retail side not to get their vendors to move?
Wood: We are seeing a lot of support with some of the larger retailers. This is especially the case when you start looking at mergers and acquisitions. We've had some large retailers who may have three or four different POS systems throughout all of their stores and a couple of different back-office systems that they have to support. They might want to get their operations on a single system, but in many cases that is not financially possible. However, when you have the standards, that integration becomes much easier especially at the home office level where you are able to receive data in the same formats. We also have some retailers in their RFP process go out and say that where standards exist, you are required to make use of those. Now, that tends to be the larger guys and it's not necessarily the case with the smaller operators.
One thing that PCATS is doing this year is really looking to increase our retailer members. Our retailers sometimes think that these standards in areas are really their vendors’ or suppliers’ problems. One of the things that some retailers do not understand is that the work that we do is ultimately to their benefit. And without their support and their involvement and their driving the effort, it just doesn't happen. The vendors are actually looking to the retailers for guidance and they are going to provide what the retailers want. And if the retailers are not stepping up and saying that we need this and that they want these standards, the vendors are going to give them whatever they end up giving them. So we are really appealing to our retailers to get involved and help drive this effort.
NPN: How successful have your efforts been in getting the large suppliers on board?
Wood: It's been very successful from the large consumer packaged goods companies like Coca-Cola, Anheuser-Busch, Frito-Lay and such. Because of the amount of data they use, they really depend upon standards as much as they can. Where things come up short is in the direct store delivery. There are a lot of DSDs out there and sometimes these guys don't even know how to turn a computer on much less get on board with our efforts. You still have paper invoicing –
sometimes by e-mail – and that's an area we would really like to solve. The retailers know that is a problem and would like to get it resolved. That was one of the areas we looked to address with PCATS Gateway a couple of years ago, but we have not been able to make that move.
NPN: What do you anticipate as being some of your near-term goals for the association?
Wood: One of the biggest areas we’re focused on right now is data security. This is a big issue and in fact it's killing our industry. Everybody is so concerned about locking their systems down and protecting themselves that a lot of innovation is just not happening. One of the things we're working on right now, and we're working very closely with the National Association of Convenience Stores, is to deal with this issue by finding best practices and defining ways that our operators can deal with the issues that they're facing. We have established, with the support of NACS, a Data Security Standards Committee and we have three working groups under that committee. Gray Taylor is heading up that effort.
NPN: What's happening with loyalty, payment and lottery?
Wood: We made some notable progress in the past couple of years with loyalty in terms of standardization. We released our loyalty specification last year and there's been a lot of implementation with that. We've done a lot of work in lottery with ticket management. We've also been very focused on the payment system product codes. We've been trying to determine how broadly the product codes are being used. And of course there's the electronic payment server itself. That is something we co-opted with the International Forecourt Standards Forum, and because we've shared that, it is more of a global standard. We've had a lot of success with that.
NPN: Along those lines, how well do your efforts integrate with similarly focused international bodies and the efforts of other retail channels?
Wood: There is not as much integration as I would like. I wish we had better integration with the Association for Retail Technology Standards and some of the integration work they have going on. We have discussed at various times working together, but we've never been able to get that going. As noted, we have done some work with IFSF and some work with the North American State and Provincial Lotteries, and we have tried to align our electronic business-to-business standards with those standards of GS1 US.
NPN: The standards exist and are available to retailers. On the retailer end, what's involved to adopt the standards in their business operations?
Wood: It amazes me that so many retailers are unaware that these standards exist. Or when they hear technology and standards, they run the other way. We offer a group of retailers, suppliers and solution providers that are prepared to help, assistant and mentor their peers and help them with these various implementations. If your hardware and software solution provider support PCATS standards and you can ask your vendors about this, the whole process should be transparent to the retailer.