Buddy System

Rutter's alliance with GasBuddy drives new consumer connections.

By  Kelly Kurt, Freelance writer

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Scott Hartman wasn’t a Facebook user until he started using it to put faces in his stores. And he had to bridge a generation gap before he led his c-store chain to its own iPhone app.

In other words, the 50-year-old president and CEO of the York, Pa.-based Rutter’s Farm Stores easily could have resisted jumping atop the latest wave of social-networking and mobile-technology trends. But Hartman believes on top of technology is exactly where Rutter’s needs to be.

“The future of interacting with customers is certainly going to involve technology more than it ever has in the past,” he says. “That doesn’t mean the face-to-face transactions are going to disappear, but we believe the customer touch points using technology are only going to increase for the foreseeable future.”

This is why Rutter’s became the first major client last year of GasBuddy Retail Solutions’ new OpenStore platform. OpenStore aims to reach multiple such “touch points,” or all the places where the c-store can interact with customers, by linking retailers to GasBuddy’s network of gasprice Web sites, Facebook, Twitter and the mobile phones in consumers’ pockets.

“The idea is to establish a digital link, a social media link, a 24-7 link,” says Gary Magnuson, Houston-based Gas- Buddy’s executive vice president of corporate development. “It’s to take the walls away and have an ongoing, two-way dialogue with the customer.”

C-STORES WITHOUT WALLS

Jason Toews and Dustin Coupal founded GasBuddy a decade ago on the idea that motorists could save money by spotting and sharing gas prices in online communities. The company now operates 230 city and regional Web sites featuring gasprice listings reported by 1.3 million GasBuddy members and 10,000 participating c-stores. When gas prices soared in 2008, GasBuddy recorded 1.1 billion visits to its Web sites and those of its republishing partners, which include Google and Yahoo, Magnuson says.

At its most basic level, OpenStore gave Rutter’s an instant boost over its competition with the gas-reporting Web site that GasBuddy created for the chain’s home turf in southern Pennsylvania: yorkgasprices.com. Banner ads for Rutter’s dominate the site. The chain’s red and yellow logo stands out in the gas-price listings, where competitors’ names appear in plain black type. Each branded listing also carries a small promotional tab, where a click on the likes of “Slim Jims” or “2L Pepsi” takes visitors to a Web site dedicated to the Rutter’s location offering the special.

These “hyperlocal” Web sites—one for each of the 55 Rutter’s locations—are a second critical component of OpenStore. Through these sites, the chain can offer food and drink specials, receive customer feedback and even post jobs, all on a storeby- store basis. OpenStore’s password-protected interface, or “dashboard,” lets Rutter’s manage every site from its corporate office. In a few clicks, the chain can set up promotions at a specific store and program them to appear at a particular time of day or even change with the forecast.

“If it has been raining for a couple of days and now it’s sunny, they might want to put a car-wash promotion there,” Toews explains. “Our platform monitors the weather and integrates that into the system.”

Visitors can use the links on these Web sites to jump to the chain’s Facebook page, check for special deals on its Twitter feed, sign up for price alerts on their mobile phones and check their balance under the Rutter’s Rewards loyalty program.

They can also link to the iTunes store for a free download of Rutter’s iPhone application. Mobile customers can use it to perform geographical searches for Rutter’s stores, receive promotions and coupons and check their rewards balance.

In the case of Rutter’s, GasBuddy formed a strategic alliance with the chain’s loyalty technology provider, Dallas-based MetroSplash Systems Group. But Toews says OpenStore can integrate with any loyalty program.

GasBuddy’s alliance with Temple, Texas-based PDI, a provider of business-intelligence software, enables Rutter’s to use OpenStore to turn real-time data analysis into instant promotions. For example, if a PDI-based analysis shows a Rutter’s deli having a sluggish day, the chain could instantly launch a promotion for the evening drive time via OpenStore. The message would show up on Facebook or the mobile phones of customers who have opted to receive text alerts.

LINK BY LINK

Rutter’s formed its strategic vision around technology five years ago and already offers free Wi-Fi, touch-screen foodordering kiosks and touch-free restrooms.

“We’re at the tip of the iceberg in terms of things we have planned,” says Hartman, who as NACS chairman in 2006 cited advancements in mobile technology in Asia and foresaw how the devices could play a new role in reaching his own customers.

The growth already seen in advertising via social networks and mobile devices is expected to continue. The Nielsen Co. declared both avenues among its top five advertising trends in 2010. More than 142 million people in the United States used social-networking sites such as Facebook and Twitter in December alone, spending an average of six hours at each site that month. In October, Nielsen reported that the nation’s total number of smart-phone subscribers increased 72% to 26.1 million users from second-quarter 2008 to the same time period in 2009.

Marketing through social networks and mobile devices gives retailers a two-pronged tool for reaching customers, says Kevin Barenblat, CEO of Context Optional, a San Francisco- based social-marketing firm. Social networks can help create buzz about a brand, according to Barenblat. Engaging consumers on a mobile device, on the other hand, allows for specialized contact because it is location-specific and almost always with the consumer.

“I can have a pretty personal experience on my phone, but it may not be social,” Barenblat says. “With the extent brands can also incorporate word of mouth, through Facebook or Twitter, it helps builds brand awareness and distri-bution for what they’re doing.”

Rutter’s launched its Rutter’s Rewards cents-off-per-gallon program last September, at the same time it began using OpenStore. It gained 100,000 cardholders in the first three months. A confidentiality agreement and a desire to keep his competitors guessing prevents Hartman from divulging more details about OpenStore’s performance. But “being at the front end,” he says when asked about OpenStore’s return on investment, “we like what we see.”

The feedback portion of the OpenStore platform alone has proven valuable, he says. Each store’s Web site lets customers rank the location in different performance categories, such as pricing or cleanliness, by stars. OpenStore automatically tracks the chain’s response to complaints and provides notice if these go unattended for more than 72 hours. Customer feedback has grown fivefold over last year, Hartman says.

“We’re seeing all the good, the bad and the ugly,” he says. “I think a lot of people aren’t mentally prepared for the ugly side. They like to think it doesn’t exist. But it does, and the sooner you hear it, I think you can build a better company.”

GasBuddy’s monthly fee for OpenStore depends on how many features the retailer wants, the number of stores involved and the length of the contract. Magnuson declined to reveal cost specifics, saying GasBuddy customizes each contract. But he says retailers likely would spend hundreds of thousands of dollars with multiple vendors trying to replicate OpenStore.

GasBuddy has 11 c-store clients, which range in size from 20 to 14,500 stores. Eight chains are implementing the Open- Store platform, but Magnuson says their contracts prohibit him from naming them until their programs launch.

WHAT TO CONSIDER

OpenStore does not require having a unique server or hiring any new IT personnel, but Hartman says most retailers should consider whether they have the skill sets in place to realize the platform’s full potential.

For Rutter’s, being a convenience store that also blogs, tweets and talks to customers on their iPhones meant new hires, he says, although he declines to say how many.

Hartman cautions other retailers to also consider technological challenges that might stand in the way of an integrated platform. Varying technology platforms used by fuel brands or food franchises that operate within c-stores, for example, can potentially turn into roadblocks, he says.

“Companies really need to understand their integration challenges before they jump out and think they can go from A to Z without the steps in between,” Hartman says. Rutter’s has spent years standardizing and taking control of its brand, he says. And it has applied new technology in layers. “In the last year we felt we had our platforms up to date, from the back office to the point-of-sale and everything in between, so we could go to the next level,” he says.

GasBuddy has invested $5 million in the technology to create OpenStore, and its tech team is constantly updating the platform. Its applications are currently supported not only by the iPhone but also the Blackberry, Android, Palm Pre and several other mobile appliances. GasBuddy also is working to develop smart-phone foodordering capabilities. OpenStore already has the capability to offer coupons that a retailer could scan directly off a mobile phone, but point-of-sale technology must catch up before it can be put into use, Magnuson says.

“It’s all,” he says, “about adding clicks to the bricks of the convenience store.” 


Tips to Grow On

  • Determine what skill sets you might need to add to maximize social-networking technology and marketing applications.
  • Expect improved customer feedback, but be prepared for the fact that not all of it will be positive.
  • Be prepared to respond quickly and positively to customer feedback. Social networking is driven by speed as well as appreciating that customers are taking time to offer you their thoughts on your store.
  • Learn what technological integration challenges might exist with the platforms used by your fuel brand or in-store food franchises.
  • Learn how younger generations are using mobile technologies and stay current with apps and messaging. It won’t take long before your “new” technology is outdated. 

Interaction WithValue

Retailers who jump onto Facebook for the sake of simply looking tech-savvy might want to reconsider. Users of today’s social networks and mobile tools expect real interaction, says Scott Hartman, president and CEO of Rutter’s Farm Stores. “I think the fact that they like that your brand is doing this has some legs,” he says, “but I think they’re going to want you to engage to win them.”

On a mid-February day, when Pennsylvanians were digging out from back-to-back snowstorms, Rutter’s blogger Jesse Butz sought to engage via the chain’s Web site, describing how his efforts to recover a friend’s stranded car were made easier by a steaming mug of cocoa from Rutter’s. The chain’s Facebook page lists 1,149 registered “fans.” And their accumulated posts run the gamut from the adoring (“I love Rutter’s brewed tea”) to the demanding (“More car washes please!”).

When it comes to mobile-phone applications, consumers also are looking for interaction with value, says Kevin Barenblat, head of the San Francisco-based social-marketing firm Context Optional. This could include important information, announcements, promotions, coupons or even something fun such as a game in which participants could win a free cup of coffee, he says. One challenge for the convenience industry, says Hartman, is the typical gap that exists between the generations running the business and the ones using social networks and mobile phone applications the most.

“There’s a lot of learning that needs to go on inside companies,” he says. “The sooner they figure that out and educate themselves, the better they’ll be positioned.”

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