Convenience Channel Hones In on 2025 Technology Priorities
NATIONAL REPORT — Many of the technologies that have been top of mind for convenience store retailers over the past couple of years will remain that way as the industry moves into 2025.
Whether it's bringing new people into the store, getting more visits from existing customers, building loyalty or understanding behavior to drive sales, retailers plan to continue utilizing digital and mobile technologies, capturing and dissecting data to help them make better decisions, and harnessing artificial intelligence (AI) in new ways to meet their goals.
"I recently participated in developing and the presentation of the Conexxus 2025 Roadmap that highlighted three technology areas [where] retailers have been talking about taking steps to implement additional solutions: digital media, mobility commerce and identity," noted Ed Collupy, owner of Collupy System Solutions LLC, which offers consulting services to the industry. "The consumer journey and experience have been on retailers' own roadmaps for years, but evolving consumer expectations, advancements and opportunities are leading retailers to consider what's next."
Of course, the ultimate goal is to get consumers into the store and then have them come back often. Technologies can assist with this, such as analyzing and understanding shopping data, according to Kay Segal, founding partner of Business Accelerator Team, a convenience retailing consultancy based in Phoenix.
"Many retailers are focused on loyalty technology or technologies that may enhance their current app to make the loyalty technology more sophisticated," she said. "However, most consumers are not part of a retailer's loyalty program, so acquisition tactics need to be a focus for retailers."
Four technologies that convenience retailers are prioritizing for 2025 are:
1. Artificial Intelligence
C-store retailers are testing and discovering new ways to use AI, from helping with store operations to better understanding customer behavior in the store, and more.
"I hear and see retailers trying to determine how artificial intelligence will impact and become a real benefit for their business," said Collupy. "They are using and getting payback from solutions using voice analytics, computer vision and publicly available tools. I'm finding that trying things out using AI is creating other use cases as knowledge."
At Fav Trip, the operator of five convenience stores in Missouri, the retailer is working with InStore.ai and using cameras to get heat maps of its customer flow, as well as capture customer impressions as they come into the store and leave. Fav Trip's policy is "Come Happy, Leave Happy."
"We are monitoring if they are coming in angry, but leaving happy, for example," President and CEO Babir Sultan explained, adding that the retailer has a great online following, so AI is playing into its social media content and decision-making as well.
Another retailer using AI to understand customer behavior — and keep them coming back — is Mount Vernon, N.Y.-based Atlantis Management Group (AMG), the operator of 300 locations, 100 of which are company owned. AMG is partnering with AI companies such as InStore.ai and Insider for audio insights into customer and employee interactions and to monitor loyalty promotions, out-of-stocks and other issues in its stores.
"We analyze the audio in the stores using a large language model for insights, and we are expanding the rollout of that in 2025," reported Rick Rigby, chief technology officer. "We are gaining insights by searching the audio in-store and learning a lot to make things better for customers."
For example, if a fuel pump goes down and someone doesn't report it right away but the audio picks up people complaining about it, AMG can look at automating this process to create a ticket and free up employees from having to create one, Rigby explained.
"Also, if we have a new loyalty promotion, we can monitor if cashiers are pushing the program, which ones are doing it well, and what resonates with the customer and what doesn't," he said.
2. Loyalty Programs
Gaining customer loyalty is key to repeat visits and increased purchases for convenience store retailers, which is why so many are focusing on loyalty programs and digital apps.
"Once a consumer opts into the app, they need to be incentivized to stay actively engaged," said Segal.
In 2025, retailers will continue their efforts to find technologies and systems that "reduce the gap between POS [point-of-sale] and loyalty data," so they can better understand the actions of consumers and target their marketing and merchandising investments, Collupy noted. "This will be needed to get ahead of the efforts to get to personalization [in marketing]," he added.
Fav Trip has an app that offers 24-hour delivery service, as well as a text club with more than 17,000 people opted in. While individuals may change email addresses, they rarely change their phone numbers, Sultan said as to why the company chose a text format.
To drive more signups, Fav Trip is using the InStore.ai audio feature to finetune its pitch to customers and determine what's working well to get them into the program. For example, store personnel started asking customers if they were part of the text club and then changed to asking them if they would like a discount on gas.
"We continue to learn and take action accordingly, so we are paying attention to how we are pitching, looking at what people are saying, and at what our staff is saying before a customer signs up for the program. Also, what are they saying if they don't want to sign up," Sultan said.
Likewise, Atlantis Management is planning "a big push" on loyalty in 2025 and expanding what the company is doing around rewards and delivery, Rigby shared. AMG has partnered with PDI/Excentus and used its internal development team to create a mobile app.
"We are in the crawl, walk, run phase. So first, it's to get the data we are gathering into Snowflake, the data warehouse, and then start analyzing and leveraging the data for better insight, marketing and automation," Rigby detailed.
3. Data Analysis & Strategy
With all the data being gathered in c-stores today — from POS and loyalty programs to apps and AI — convenience retailers are constantly finding new ways, and new technologies, to help them analyze the data and use it to influence customer behavior, driving store visits and sales.
"My belief, given the momentum in new technologies and competitive threats to 'convenience,' is that more companies need to and will be undertaking projects to build out a comprehensive system and data strategy around business objectives," Collupy predicted.
Fav Trip is turning to data more and more, utilizing InStore.ai and the data that is being collected around customer expectations. "We've been sitting on a lot of data and are finding ways to monetize it," Sultan pointed out.
Atlantis Management's Rigby said his main mantra right now on the technology side is "get good data in the hands of smart people, so they can do smart things with it."
The retailer is leveraging companies such as Snowflake Inc. and Power BI on the reporting side to bring insights to the headquarters level, as well as to store managers. Additionally, AMG is focused on automating reports that people were doing manually in the past. what they like to purchase and therefore, what can be promoted to them, according to Rigby.
"What we hope is to get to know the customer more when they are at the point of purchase, and know what products they like, so we can give them offers for it or for what we think they might like," he explained.
4. Enhanced Use of Digital Cameras
From theft detection, to combining AI with digital cameras to gain insights, to triggering notices for items out of stock, c-store retailers are finding more ways to use digital cameras both inside and outside the store.
At Fav Trip stores, there is live monitoring for shoplifting detection and the company is moving to a system where it will have its own 24/7 live monitoring rather than working with outside companies, according to Sultan. Aside from shoplifting, its cameras will detect when a shelf is missing a 12-pack of beer for example and alert the staff to restock.
The chain's goal is to get to a personalized level when marketing to customers by using data from its self-checkout and mobile app. Working with a third party to segment its customer base, the data can show "We are trying to remove human errors," he said. "We are combining IT with marketing and video to solve our problems when it comes to streamlining operations."
Security is also top of mind at Atlantis Management, where the company is looking to use AI and cameras to improve security and safety, specifically partnering with camera companies to try to identify behaviors on the forecourt or in the store.
"We want to learn where shoppers are congregating, but also if we do have a crime or theft, we want to use the cameras more effectively moving forward," said Rigby.
Cameras have become much more useful than simply for theft detection, Collupy echoed.
"I've been amazed at how involved IT teams are with digital camera system technologies. These systems now sit on company networks, providing visibility and accessibility to management and law enforcement in real time or historically," he said. "Extending their use to people counting, heat mapping the customer's journey and license plate recognition are the next steps being taken across the industry."
