CTVG’s March 22, 2024, quarterly virtual meeting featured a presentation by Tim Tang, director of business technologists at Hughes. Tang, well-known for his insightful analysis of industry trends, provided a thoughtful look into the future of technology in retail and the convenience sector. Following the presentation, CTVG members had the opportunity to share their experiences and perspectives.

During the discussion, the group explored the future and current state of convenience retail and determined the fight for customers will lie in personalization, community engagement, data analytics, and in taking a proactive and balanced approach with technology. External forces like declining fuel sales and EV growth, reliance on third-party technology, new features in AI, payment and loyalty technologies, and changing consumer preferences will lead the change and it is imperative retailers take a long-term approach to their technology choices for the greatest ROI.
Key takeaways in the report include:

Winning the “Fuel” Customer

CTVG members highlighted the evolving landscape of fuel sales, foreseeing significant shifts with the growth of EV charging. Moreover, the diminishing demand for traditional products like fuel and tobacco led to considerations about the transformative impact on customer preferences, underscoring the need for innovative products and services. Buc-ee’s was cited as a prime example of a retailer that generates exceptional foot traffic without emphasizing fuel pricing. Members also acknowledged advancements in fuel pump technology, surpassing current industry standards by leaps and bounds. “When I think about the future of the convenience stores, I’m thinking primarily about what are those technologies? What are those initiatives? What are those business models that are going to be able to drive that fuel to retail conversion,” asks Tim Tang, Director of Business Technologists at Hughes.” He continues, “If we acknowledge…there is fuel demand destruction…tobacco demand destruction as well, then how do we increase that conversion from fuel to retail?”

Reliance on 3rd Party Technology

Concerns about data accuracy from location services prompted a broader conversation on effectively harnessing and interpreting data. Some members highlighted the importance of not blindly trusting AI-driven solutions, emphasizing the need for data vigilance. Chris Egan, chief information officer at United Dairy Farmers, cautioned the group against having a “false sense of security that if it looks slick and it says AI, it must be right.” Additionally, challenges such as internet connectivity in remote areas and during disasters gave further credence to the approach of convenience stores being community partners.

Data Analytics, Loyalty, and Payments
Competition with adjacent channels like QSR, data analytics and the need for seamless technology integration led to a deep discussion on loyalty programs with integrated payment, illustrating the impact of incentivized engagement on consumer loyalty. The Starbucks loyalty and payment app was referenced as a shining example combining mobile payment with customer-centricity. Nick Peters, vice president, IT for Campbell Oil Company, provided a thoughtful supposition on its origin: “I do like this concept of stored credit because I do think it is a way to build loyalty. It is a chicken or the egg argument. Did Starbucks build their loyalty program because of the store credit approach or did the store credit approach build the Starbucks loyalty? And I’m not trying to be funny about it, but I really do, I don’t know which came first because I think that’s a question worth asking as a whole on that.”

Lightning Round Update on Generative AI

The meeting also revisited a previous CTVG discussion regarding generative AI. During a rapid-fire round, CTVG members reported a mix of continued curiosity, experimentation, and optimism about the potential of AI across various business functions with some actively employing AI solutions and others still considering it.

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