Next-Gen Loyalty & Personalization:
C-Store Leaders Panel

Full transcript

What next-gen loyalty means

Jeff Baskin, Eagle Eye 08:18

Good morning. Is my microphone working? Okay, good. Thanks for getting us up on a run and energized, Matt. This is my third C-StoreTEC, and when I got the early-morning slot I was a little concerned, so I'm glad to see everybody here. Have a seat.

For those who don't know me, I'm Jeff Baskin, global chief revenue officer at Eagle Eye Solutions, and we're here to talk about next-gen loyalty. Let me set the scene. Most of us have loyalty programs today, and we're innovating and launching new ones. But what is the next generation of loyalty, and why does it matter? The main reason is that you told us it does. In yesterday's survey, the most important things for this group were customer data, loyalty, and personalization, and that is exactly what we're going to talk about today.

Old loyalty means basic point schemes and mass offers, the same offer to everyone. It means rewarding trips you're probably already paying for, so you're doubling down, and maybe getting to some segmentation. That's the old world. Next-gen means real-time transactions, real-time redemption, and real-time adjudication at the till. It means one-to-one personalization, not just segmentation. It means omnichannel, so every customer, whether a mobile user or an in-store customer, gets the same experience and the same offers. And it means insights. The data is crucial to what we do as a marketing group, and the insights we get from it are crucial to making our biggest decisions.

A few stats show the opportunity in next-gen loyalty is undeniable. Eighty-five percent of retailers rated personalizing the consumer experience as extremely or very important. Loyalty and personalization rank number two among the factors most likely to drive growth for c-store operators. And 57% of loyalty members who buy fuel also go into the store, versus 33% of non-members. That conversion of people who get fuel and come into the store, or vice versa these days, where they come in for food and we want to make sure they also get fuel, is very important.

Here's a quick picture. This is a quarter mile from my house in Arlington, Virginia. There's a Shell station at $4.19 and a Liberty gas station at $3.92. This was taken about a month ago, so prices may be a little different. BP is somewhere in the middle. About a block further are a Harris Teeter and a Safeway, and about a quarter mile back up the road is a 7-Eleven with no gas. As I pull out of my neighborhood and take a right, and I want a two-liter of Coke and maybe some other things, where do I stop? Is it going to be price? Is it going to be loyalty? That's the question, and we have three panelists here to help answer it: Lanna from RaceTrac, Nick from Weigel's, and David Jackson from Kwik Trip. Welcome, and thank you for joining me on stage.

I'll start with a question for all the panelists, and we'll go down the line. Describe your loyalty program in one sentence and name the single metric you're most proud of.

Each program in one sentence

Nick Triantafellou, Weigel's 12:17

Loyalty is our business. It's one of the main pillars of everything we do. The statistic we're most proud of is our penetration rate. We're at 47%.

Jeff Baskin, Eagle Eye 12:31

David.

David Jackson, Kwik Trip 12:32

The Kwik Rewards program is centered around data, and it's designed to bring relevant offers and experiences to our guests. Like Nick, I think our proudest metric is penetration rate. We're in the mid-40s, which I think says a lot about the execution of your program, whether at the store level or in marketing and the rest of the organization.

Lanna O'Conner, RaceTrac 12:58

I'm Lanna with RaceTrac Rewards. It's a program where you earn points and redeem them for free stuff. We also have a subscription program as part of our plan, which is a bit different from a lot of programs in the industry. The stat I'm most proud of is that this year we've really increased our new member acquisition. We've grown fivefold year over year, so we're very proud of how we've enabled that functionality and driven new users to the program.

Weigel's: culture behind 42% loyalty-linked transactions

Jeff Baskin, Eagle Eye 13:27

That's great, thank you. Nick, let's start with you. Weigel's loyalty is tied to more than 42% of your transactions, and you have about 600,000 registered members. For a chain of roughly 80 stores, what has been the secret to that level of penetration?

Nick Triantafellou, Weigel's 13:42

Culture. It all comes down to culture, and it starts from the top down. The CEO is bought in. Mr. Weigel is bought in. Loyalty is as important to us as the food program, and as we vertically integrate with the commissary, loyalty isn't going anywhere either. It's part of everything we do, it's what we speak about, and it's in our marketing. Our loyalty program is our first and foremost focus, because it's setting us up for where I want to take us with retail media and everything else. But it all comes down to the culture of the company, from the top all the way down.

RaceTrac: future-proofing the platform

Jeff Baskin, Eagle Eye 14:30

Great. Lanna, you've spent time over the last couple of years migrating and transforming RaceTrac's loyalty program, which I think originally launched in 2016. What are you most looking forward to with the new program, and what would you tell other retailers in this room who are still on older legacy platforms?

Lanna O'Conner, RaceTrac 14:37

We've been on quite a journey with our loyalty program. We went from a homegrown solution to a platform we implemented, and now we're moving to a new platform. Over time we've gained a lot of functionality. Platforms get better and smarter every year, regardless of who you're with, but our internal teams have also grown. That includes how we're architected and how we engineer all of these platforms to work together and talk to each other in real time.

When we planned for this program back in 2022 and first launched with our previous platform, we were looking at what we needed right then: our use cases for today and maybe a year or two out. We quickly outgrew those use cases because our teams were upskilling and growing. We realized we shouldn't plan for the program we have today or tomorrow. We need to think bigger. What are we going to want in ten years, and how can we bring on a platform and architect all of our integrations to work for us even in that state, so we don't have to scrap everything and start fresh every time?

Jeff Baskin, Eagle Eye 15:47

So you're future-proofing the platform.

Lanna O'Conner, RaceTrac 15:50

That's the goal.

Kwik Rewards: from 1 million to 5.2 million members

Jeff Baskin, Eagle Eye 15:52

David, Kwik Rewards has been around since 2018. You reached a million members in the first four months of the program, and now you're at about 5.2 million. What drove that early adoption back in 2018, and what do your guests expect from the same program eight years later?

David Jackson, Kwik Trip 16:10

Nick, I think "culture" is a great word for it. We also use "execution" a lot internally. When we talk about the launch and the success we saw, we put a lot of focus on our retail teams, making sure they understood what the program was and that they were talking to guests about it. I truly think that was probably the biggest reason for the success. We built a good program, but ultimately our stores were able to execute it and understood it when guests came in and asked.

We actually launched the program to our coworkers first, for three months. That let them understand the program, play around with it, and break it a couple of times, which also allowed us to fix it. I think that was a big piece. I also think we had a strong brand before loyalty, which helps a lot. We weren't using Kwik Rewards to fix anything that was broken, and we didn't have pressure from competitors that we felt we had to react to. We built the program around what we wanted to do internally and what we wanted the program to be.

Balancing profitability and guest value

Jeff Baskin, Eagle Eye 17:06

Great. As part of your transformation, Lanna, you've reworked tiers in the new program to make it hopefully more profitable. How do you balance profitability against making sure guests get enough value from the program and stay engaged?

Lanna O'Conner, RaceTrac 17:22

That's a great question, and really, they shouldn't be competing. If you're doing it the right way, guest value should drive profitability for the program. We haven't always done it the right way. We've done a lot of testing and learning, and we're still there. We test a lot of things to understand what will drive the behavior change we want, so that we're not just rewarding what guests were going to do anyway. There's a time and a place for that. We do want to celebrate you, and we do want to provide surprise and delight for our top-tier members. But we also want to drive trial of new products and our hot food program. If you've never tried it, we have a whole series aimed at getting people to try it, try it again, and keep coming back to build the habit. So we see profitability and program value to our guests as going hand in hand. If we give our guests value, they'll give it back to us in return. That's what we're striving for.

Why Weigel's built tiers on visits, not spend

Jeff Baskin, Eagle Eye 18:20

Nick, I think you also just launched a tiers program, Fan, All-Star, VIP, and MVP, based on monthly visits rather than spend, which not everyone does. Why visits, and how are you thinking about the margin trade-off, with benefits like fuel discounts and free pizza?

Nick Triantafellou, Weigel's 18:40

When Jess, our director of loyalty, was coming up with tiers, one consideration was that our biggest shopper doesn't earn points. Our tobacco shopper doesn't get anything; they just get the discount, and that's it. The same goes for beer and lottery. We can see in our data, from our CDP with TAI, that if we can get these customers to come more often, not only is their CLV much higher, their spend is much higher too. We need to give them something to look forward to. So tiers were built to reward them as well as everyone else, and then to figure out how to increase trips.

We can prove the margin trade-off quite easily with the data, and it's worth it. A slice of pizza might cost us about $1, but if it drives an extra trip where that person spends $13 or $14, the margin is there.

Kwik Trip's AI-personalized Challenges

Jeff Baskin, Eagle Eye 19:35

We're ten minutes in and haven't even mentioned AI yet, but we're getting there. David, I think you were on this stage about two years ago, and I was in the audience. You talked about moving from one-to-many, to one-to-some, and eventually to one-to-one. In May, we had the opportunity to launch AI-personalized challenges together, which I believe is the first of its kind in convenience retail. Why challenges rather than other options, and how is it doing so far?

David Jackson, Kwik Trip 20:06

When we were on stage a couple of years ago, I think the goal of personalization was more aspirational than reality. What we found over the next couple of years is that it was extremely challenging. We had done a lot of segmentation and some levels of personalization, but with a lot of manual processes built in. It takes a lot to create something based on each individual member, or even just groups of members.

As we started to look at challenges, we first looked at our existing program. Bloat over eight years is a real thing. We asked which existing features in Kwik Rewards didn't fit our goals, meaning features that don't use any data or personalization. Punch cards were one example. You talked about old loyalty and legacy systems, and punch cards are a great example. We spent a lot of time looking at them and couldn't find any way to justify keeping that program around. It didn't fit our data goal, and it didn't fit an ROI or incrementality measure we could track. When we talked to guests, many didn't even realize they were getting discounts from a punch card program. We had a legacy milk punch card program, and we had some vendor-funded CPG programs too. Our concern was that the legacy dairy punch card was going to be a big deal to lose.

We moved forward anyway. We had actually run a challenge before we engaged with Eagle Eye. It was a single challenge offered to several different groups, and it took our team a week to build. Within that, we saw positive ROI. We saw people taking advantage of it, and we saw growth in their baskets and their frequencies. That was our use case for saying we knew this would work. The remaining question was whether punch cards going away would create issues. After launching challenges and replacing punch cards, maybe two guests reached out to us about it. It was incredible. We thought it would be far more impactful than it was. Guests were seeing the challenge program and hadn't even realized the punch cards existed, partly because we had too much stuff in the program, but also because it just wasn't a feature they engaged with or found value in.

Jeff Baskin, Eagle Eye 22:37

A lot of retailers have small teams, so it can take a week to get to that level of personalization. Then the question is how to scale that to 5 million customers. That's a big part of it.

David Jackson, Kwik Trip 22:49

Exactly. I think scale is the biggest part of it. One challenge that we can spend a week building and launching is great, but it touches about 5% of your audience. With the challenges we have today, in the first month I think we had 150,000 iterations of challenges going out to guests. Those were unique guests with unique challenges. As they logged in and looked at their challenges and the visits they were earning, as you can see on the screen, the visits were different from their neighbor's. The rewards and spend thresholds were different, and the products in their challenges were all different. What it took to do one of these challenges before engaging with Eagle Eye is a fraction of what it takes now, because it's all built into the platform, which is amazing. It's very awesome.

Keep it simple

Jeff Baskin, Eagle Eye 23:42

While everyone is out looking for that next shiny object, when we talked last week you mentioned that part of RaceTrac's overall strategy is actually to simplify things and not try to do everything. Lanna, what do you mean by simplify?

Lanna O'Conner, RaceTrac 23:58

Like David, we have a lot going on in our app, and we've added a lot of technology over the past five years. The complexity compounds when you add all of these new things, not just for the internal teams using these platforms, but in how we talk about it to guests. We found we were overcomplicating simple instructions on how to activate an offer or redeem a reward. Put yourself in the guest's shoes, looking at this email we just sent: "You're asking me to do what? Click this link, activate this thing, do all these steps. It's just too much."

So our focus over the past several months has been to take a step back and go back to basics. How do we focus on education? How do we inform users about the benefits of the program in simple ways? We were overcomplicating it, so how do we make sure our guests understand? We've completely reimagined our welcome journey. When you joined the program, you used to get a series of five or six emails with a lot stuffed into each one, because we were trying to tell you everything. Now it's more of a breadcrumb approach. You get up to 15 emails, depending on what you do during your first 30 days, and it's all about education: you've done this thing, so here's how you can redeem that reward. We had been confusing everybody by telling them about our subscription program and A, B, and C, all the things they could do.

Now we're focused on what we want them to do in those first 30 days, which is to redeem a reward. You see the most value from users who understand what points mean, see their value, and redeem them. If we can get you to redeem points in the first 30 days, we're on our way to building a highly engaged guest. So everything we do now is focused on education, and we apply a test: would your grandmother understand this email? We want your grandmother to be able to participate in the program. That's our bar at the moment.

David Jackson, Kwik Trip 26:07

I can relate to that, because we have the exact same problem, and one of my biggest frustrations, which we still do today, is this: I get an email, and it has three arrows in it pointing to help communicate the message. That's way too complicated for our guests. If you have to add arrows to your marketing to communicate a message, it's too many steps for them.

Hyperpersonalization with a small team

Jeff Baskin, Eagle Eye 26:34

Keep it simple. Nick, many retailers, many of whom are out here in the crowd today, shy away from AI or personalization because they think they need huge teams of data scientists and marketers. You've done a really good job with a very small team. How do you build hyperpersonalization, including the personalized videos and all the gamification you do, with a very small team?

Nick Triantafellou, Weigel's 27:03

It's relying on the vendor partners that help get us where we want to go. Anyone who has met Jess knows she has very specific goals and where she wants to head. We have a powerful CDP that can orchestrate what we're doing, alongside [unclear vendor names] and another partner that brings the personalization videos. It's about finding vendor partners that let us play where the big ones play. The team is small, but we find the right partners to help create that hyperpersonalization where we're headed. It's a lot of work, but that's why we've made those relationships.

Hyperpersonalization is the coolest part. If you've seen the Spotify Wrapped end-of-year video, we now have a company that can create that for your monthly statement: this is how many times you came, this is what you purchased. They can create it from any template email we give them. For our Weigel's Wednesdays and our Weigel's Weekly, it becomes a personalized email that goes out, built into Braze. That's a heavy lift we would never be able to do ourselves. We use AI internally, but there are other times when we rely on vendor partners to help out.

Funding personalization with suppliers

Jeff Baskin, Eagle Eye 28:30

In our experience, AI has really leveled the playing field for a lot of smaller retailers who don't have huge teams or 30 data scientists on staff. AI can do that work for you.

Speaking of that, David, some retailers starting on their AI personalization journey look at how to fund the program. A lot of retailers say they'll fund the whole thing themselves for three to six months, get the data points, prove the incrementality, and then take that proof to suppliers to get funding. You took a different route and went directly to suppliers from the beginning. How did those initial conversations go with the brands? What we're seeing here is different from traditional merchandising or retail media. How did those conversations go, and how has it been successful for you?

David Jackson, Kwik Trip 29:30

On the budget front, we typically make decisions on loyalty features mid-budget period, so we don't end up budgeting for anything. We go to our suppliers first for almost all of the features we add. It's a ton of our products, so it's a natural fit, and we already use suppliers for a lot of what we do within loyalty.

What changed with this conversation, and you'll see a few numbers on the slide, is that 100-plus brands were involved in the first month we launched challenges. We sold this to our suppliers on day one, as we started to build the program out. We told them this was a feature we were going to lean into heavily, so there was an expectation that they would join and participate. But frankly, the discussions were pretty easy, because the way this is built, it creates completely incremental spend from those guests. The vendor isn't paying for anything unless the guest buys more of their products. That's complete incrementality, which was a very easy sell, and not how we typically sell to our suppliers.

The other difference, and it came up every single time we met with those vendors, is that we're typically having a conversation about how we can bring new guests to their products and new guests to their doors. This was the opposite. We told them this isn't a customer acquisition feature. It's something that drives existing customers to buy more of your particular product and spend more with you. We highlighted that it's an add-on to what you're already doing in the loyalty program and in marketing, not a replacement. You still need to grow your customer base and drive trial, and we have other features for that. This one helps you reach the existing guests already buying your products and get them coming in and spending more with us.

NIL athletes and community marketing

Jeff Baskin, Eagle Eye 31:30

I think it's one of those things that helps you drive past one retailer to get to the next one, even though it might not be more convenient, because you have that challenge there. That's interesting.

Nick, last year we had a great conversation, probably at the bar, about NIL and Tennessee sports and what you're doing there with promotions for athletes. This isn't necessarily next-gen or high-tech, but it's very effective for Weigel's, and I'd love for you to tell us a little about it.

Nick Triantafellou, Weigel's 31:58

The bar is off the record. Sorry. Yes, off the record.

We currently have 63 college NIL athletes across East Tennessee. This year we also added a Friday Night Lights program, where we feature certain schools every Friday and offer discounted pizza. If there was a big rivalry game, like Maryville–Alcoa, we focused on those schools, drove pizza, and drove trips. We also started college football pizza pricing this weekend. The lift we've seen in whole pizza sales has been tremendous.

As a local, regional brand with 95 years of history, we know that when we lean into the community, it always comes back tenfold. That's the whole point of NIL. It's a community marketing tool, and it gamifies an experience. People are already watching the game and are already obsessed with the University of Tennessee, and then they think, "They just scored a touchdown, so I'm getting a free Powerade tomorrow at Weigel's." We become part of that conversation. It would be one thing if we just showed up and tried to talk sports, because a gas station has no business being there. But NIL has allowed us to be there. Now we're included in the conversation and get tagged in things, and when people talk about University of Tennessee football and baseball, they also talk about Weigel's. It was an easier way to get there than trying to put our name on a stadium or donating a lot. We work directly with the athletes, and everything we do comes back to the community.

Personalizing the in-store experience

Jeff Baskin, Eagle Eye 33:36

That's great. Lanna, I talked a little at the beginning about the importance of the omnichannel customer, and how whether you're on the mobile app, on the web, or walking into the store, you should have a very similar experience. You mentioned in-store tech and loyalty as a huge unlock with your new program. What are you exploring to personalize the in-store experience, and how do you expect that to change guest behavior, including fuel-to-store conversion and vice versa?

Lanna O'Conner, RaceTrac 34:03

We've been talking to a lot of folks in the room about the transformation we're undertaking inside the store. We're not there yet; we're in the early stages. So far we've focused more on above-property technology. Our app was rebuilt a couple of years ago, we just replatformed our website, and we rebuilt our self-checkout UI. We've done a little bit here and there.

What we found recently is that we grew our new members fivefold this year, which is a lot of new members to bring in at one time. You're probably wondering how we did that. A lot of you already have this technology: enroll-at-pump or PIN pad functionality. That's how we've gotten an influx of new members. A good number of them have opted into communications, so we can contact them, which is great. But there are still a lot of users who have not opted in. They don't want to download our app. We talked yesterday about app fatigue in one of the sessions, and we talk about it a lot at RaceTrac too, because some people are just never going to want to download your app, but they do want to participate in the program.

What's different about someone who has the app, is a fully enrolled member, and is engaged in it, versus someone where we just have their phone number? They may be earning points and getting discounts here and there. What do we do with that group? We see a lot of value from them. They're giving us more than they did before they joined, but they're not as valuable as the app user. We've been trying to push them to the app, push, push, push. But getting a user to download the app is very expensive when they don't actually want it, and typically they delete the app after they redeem the offer you gave them. So is it worth it?

The answer for us is more about how we use in-store technology. These members are coming in and visiting us. How can we let them engage differently if they don't want the app? How do we let them know they have points and can redeem them? Do we allow them to redeem points right at point-of-sale or at a different part of their on-lot journey? Those are things we're dabbling in right now. We're focused on how to get more value from people who have shown intent to join the program and who are coming a little more often since joining, but who don't want the app. We're integrating all of these systems to help that user engage, and all our other users as well, to drive education and information. Maybe one day they'll see the value of downloading the app, but how do we let them engage without it too?

What's next in the next 12 to 24 months

Jeff Baskin, Eagle Eye 36:42

David, speaking of next-gen, I was going to ask about the next 12 to 24 months, but everything is moving so fast that it's probably the next six months or so. Let's use 12 to 24 months for time's sake. Are there things you can't do today that you want in your toolkit in the future? What are a couple of the things you're dreaming of?

David Jackson, Kwik Trip 37:08

When we look to the future, we continually have conversations about making sure we get the fundamentals right and that the technology works. I think that can't be understated. Every time you add something new, something else breaks or causes issues. So with new feature sets and new development, there's always a focus on making sure what's built now works for the guests, and on listening to their feedback. We spend a lot of time on that, and on backlog refinement, making sure the technology and fundamentals work and guests understand what we're putting out there. You'll see a lot of the same from us there.

Personalization will continue to be a focus. We feel that what we've done with challenges is dipping our toes in the water of how we can personalize everything else, including getting to email communications that are truly personalized. I'm sure Nick has seen this too: we already run so many programs within the organization, like discounting, offers, and deals, that we don't have to come up with new deals and offers to get guests into our stores. What you need is to get visibility of those offers and deals to the rest of the guests who are participating, whether they only engage with you in the store or they're in the app. There are a lot of different channels you have to try to reach them on.

Loyalty and fuel prices

Jeff Baskin, Eagle Eye 38:27

Great. One more question, and then hopefully we'll have time for questions from the audience. Whoever feels like answering, great. With fuel prices the way they are today, and you saw the disparity in my picture, even between stations across the street from each other, customers are very cost-driven. How does loyalty play into that? What are some strategies you use? Anyone want to grab that?

Nick Triantafellou, Weigel's 39:01

We've done spot promos. We did an entire summer of 25 cents off a gallon every Sunday, which caused a lot of people in town to also start doing 25 cents off every Sunday. We're very strategic about what we pick, because Sunday is going to be our worst traffic day. If we can drive traffic on Sunday and change people's behavior so they come on a Sunday for the discount, and we can prove that it worked, then we'll do spot promos elsewhere. For example, on Thanksgiving, 25 cents. There are ways we hit it, but we use it sparingly and strategically, and we always have the fuel team's buy-in on what they can afford and what we can do. It is a lever we will pull.

We also just recently got an everyday gas discount, which we didn't have before. We have it until the end of the year at three cents off a gallon. We know people are conscious of this, and we know our volume in market and how much of the gas coming through our sites is ours. So we're very strategic, and we make sure everyone is on board. Operations is aware, and we have signage, because I lose my mind if I see a printed piece of paper taped to the gas pump. Give us time to get in front of it as a marketing team, and we'll drive it.

Jeff Baskin, Eagle Eye 40:25

Great. Anyone else before we go to questions?

Lanna O'Conner, RaceTrac 40:28

I'll jump in on that one too. People want fuel discounts. No surprise, they've always wanted them, and now even more than ever. Our fuel discount has always been by far the most redeemed item in our catalog, and all of our research says people want more of them. So we've been doing a lot more of that in a targeted fashion this year, and we've seen really strong growth in how people use them, including the transition from the pump to in-store with those discounts. I think people feel they've saved a little money, and now they can spend it inside. So we're starting to do some new and different things. It's always the question of whether you want a program that's fuel-focused or one focused on the inside of the store, which is where we've historically been. This is new territory for us that we're excited to explore.

Nick Triantafellou, Weigel's 41:22

They save that money and go get a small indulgence inside, because that's how they reward themselves.

Jeff Baskin, Eagle Eye 41:30

David, anything?

David Jackson, Kwik Trip 41:31

I'll echo those thoughts. We certainly have opportunities for guests to earn fuel discounts in-store, and our main currency is redeemable for fuel discounts. We see that as one of the most popular pieces, and that continues. As fuel prices rise, we try to measure sensitivity to fuel pricing based on fuel discounts and where we see redemptions increase, and we certainly see it. We're trying to be strategic about how we ramp that up. We know it's a lever that can create a lot of positive ROI for us. However, we're careful about introducing something, whether it's a forever benefit or not, because it's very hard to go backwards from that. We also want to make sure it isn't easily duplicated by a competitor, because then you're just discounting and getting nowhere, since the person right across the road is discounting too. We haven't quite figured that out yet. We're also looking at a lot of third parties that have their own audiences. Those are people who are intentionally going into those apps or programs looking for discounts, and that's the audience we want to be in front of. So we'll continue to look at that.

Jeff Baskin, Eagle Eye 42:45

It's nice to have customers who are looking for those discounts. You don't have to push it to them, and when they're there, it's a good thing. We have a few minutes for questions, so please feel free to ask this great panel.

Q&A: Scaling personalization for smaller operators

Audience member 43:14

Thanks for taking my question. I'm a smaller operator, and I thought, at least until today, that it's a lot easier for me to be very personal and approachable with my customers. When you talk about personalization as it pertains to your app and your loyalty program, how is it scalable? I'm trying to understand how you do it en masse for all of your customers and followers, not just one-by-one.

David Jackson, Kwik Trip 43:42

I can start. First, we're not doing it for all customers in all instances. We have instances like challenges where you get that personalization: they log into the app and see something no other customer sees, because we're looking at their purchase behavior and targeting the right product and the right offer that we feel they'll jump into. But I don't know of anybody who has true one-to-one personalization across all of their channels. Over the years we hope to get a little closer each time.

To your point, as someone who is in our stores, a coworker is a true form of personalization too, and it's very hard to duplicate. You have to get good coworkers who know the guests coming in. We talk about that all the time with suggestive selling and our coworkers recognizing regular guests. Say a guest comes in for a pack of cigarettes and picks up a pack of Marlboro, and there's a two-for price on special. If we can get that coworker to say, "Hey, I know you buy this. Buy another one, because that's going to save you two bucks," that's the best-case scenario for us. But it's sometimes even more challenging than the technology to get that coworker to invest the time in understanding their guests. So there are two aspects. You can do it with technology, but if you find a way to do it directly in your store, you're better off for that too.

Lanna O'Conner, RaceTrac 45:14

Great answer. No notes.

Jeff Baskin, Eagle Eye 45:17

I'll just add to that. With challenges, personalized promotions, and offer ranking, you can set up offers for a small group of people. But once AI and personalization get going, every single person in this room is treated individually. My best example is Netflix: when you open your profile, all of our movie suggestions look very different. We're able to do that literally on a one-by-one basis, and as you choose those movies, or I should say products, all the stretch goals David mentioned become completely one-to-one. It's tough to do that even for large retailers, but scale is where AI kicks in. And AI does that work, but then it's checked by humans. That's the biggest thing: you want the AI to do a lot of the work for you, but all of the promos are checked by humans, and that's what makes it a really great tool.

Nick Triantafellou, Weigel's 46:16

Our true segmentation before we had TAI on board was nothing like what we can do now. For example, with win-back campaigns, we can find a group of people who always bought Skittles and are no longer coming to our store, and hit them in the customer journey. That's the type of thing where we're headed. AI is going to get us to hyperpersonalization much faster, regardless of team size, and the future is bright. The segmentation we do today is possible because of where technology is now.

Q&A: Motivating store teams to sign up members

Audience member 46:54

First of all, thank you. I thought this was a great session with a lot of good insights. David mentioned in response to the last question the importance of coworkers in-store talking about the program to drive new customer acquisition, and I couldn't agree more. Panel, is there anything you're doing internally, like a program within a program, to incentivize your employees, such as tracking signups store by store and incentivizing employees to keep those new signups coming by word of mouth?

Nick Triantafellou, Weigel's 47:25

We have employee loyalty, and we've also done sweepstakes. We've given away cruises, and we've given away a car. We tier the stores so it's fair, comparing like with like. When a new store opens with loyalty already going, we typically reach 60% loyalty penetration. It's the older stores that trail, so we tier them out. District managers can win cruises, and we make it a big spectacle. Everyone gets a key to a safe, and then they try to open the safe. We've done all of those things to help, because back in 2022 we were at 14 percent, so it has helped. On the employee side, we give them points every single week that they can add to, and they can only use them for gas discounts and food discounts. We want them in the app, because the more they're in the app, the better they understand it and can do exactly what David was talking about.

Lanna O'Conner, RaceTrac 48:22

We do something very similar. We don't have anything always on, but we pulse contests based on which store has increased its loyalty penetration the most against its own baseline, because some stores are blowing it out of the water and some are really lacking. That's how we've made it fair. We've also linked our employee discount to the app, so they have to be in the app to get their employee benefits while they're on shift. They're in there, seeing offers and using discounts.

I think the hardest part is that employees don't think there's enough time to talk to someone about an offer, like "buy an extra pack and get a discount," because they're trying to keep speed of service up. So it's about balancing that: helping them understand the apps so they can have that conversation fast enough, as a quick hit, while still getting the customer out the door and on their way. That's what we're always trying to juggle.

Q&A: Bringing IT and marketing together

Audience member 49:19

At what point in the process, when you're working with your tech partners, do you bring in marketing and other cross-departments, so you don't run into the situation where one side doesn't talk to the other, or there's tension as you move forward with some of the projects?

David Jackson, Kwik Trip 49:43

I get yelled at immediately if I don't bring in my IT counterpart. I say that, but just about every time I still end up having a meeting first before I pull them in. It does happen very quickly, though. I think we've built a really good relationship with IT on our side, and I listen to how RaceTrac talks about that relationship, and I think they probably do it even better than us. As we talk about what will pull a project or a new feature together, we know there are dependencies on IT for everything we do, so that relationship is really important. They need to understand what we're trying to do and be brought in as soon as possible, so they're not trying to play catch-up three meetings later. And it's not just when there are new features. We pull them into meetings for quarterly recaps and what we're doing within our department, so they understand where we're headed and have the opportunity to be along for the entire journey.

Jeff Baskin, Eagle Eye 50:45

I'll add to that. I know that working with David and his team, they did a tremendous job of this. Where a lot of retailers get stuck is that they start with one department on AI personalization or loyalty, and that department just starts going. Then you're two months down the road on a project, and they say, "Oh, we should probably bring in marketing," or "We need to bring in merchandising." If you don't do that as close to the beginning as possible, it's going to delay things a lot. An AI personalization engine implementation is actually fairly simple, and you can be live in eight weeks, but you have to include the right people, because everyone has a say in how it's integrated and in the marketing and merchandising decisions being made.

Sometimes marketers run with it: it's a great idea, we want to go fast, fast, fast. Then a technical person comes and says, "Hold on a second, we need to check privacy, and we need to check these other things." So the quicker you can bring that group together, the faster you can go and the sooner you can get live. It's easier said than done, but the program will be that much more successful.

Lanna O'Conner, RaceTrac 51:50

I'll add one thing. At RaceTrac, my team is really the front door to Colin's team. We spoke yesterday; he's on the marketing technology side of our IT organization. My team is responsible for collecting all of the business requirements to pass along to his team, and they're with us hand in hand the whole way. Where we struggle a little is when other stakeholders in the business have a need. They're supposed to come through the digital experience team and then go into Colin's team. That's where we've seen a lot of benefit, because our team can help translate what, say, the merchandising team needs. They may not know how to write a business requirements document, but my team does. So we tell them, "Tell us in plain English what you need. We'll translate it, you tell us it's right, and then we'll get it going." That cuts down on so much back and forth. Everybody in this room has our own way of talking, and it's a bit of a different language from other parts of the business, so how can we remove that barrier? That's one of the ways we've addressed it.

Jeff Baskin, Eagle Eye 52:48

And find partners who can help you do that. The technology providers in the room have the opportunity to work with many, many retailers, so we've done this quite a bit. Use your business partners to help you build those business requirements, with your needs in mind, of course. Hopefully they're able to do that for you.

David Jackson, Kwik Trip 53:09

I'll add that I think investing time in learning to speak their language, whichever department it is, matters. I'm thinking directly of IT. You don't need to be an IT person to understand some of the technical requirements, but it goes a lot further when you can have a conversation and talk back and forth with someone. Where we see other departments struggle is when they say, "I don't know how any of this works. I just need it done." That's the instant red flag of a rough project that's about to start. If you can have someone, or spend enough time yourself, to work your way through a conversation with IT and say, "This is what I'm trying to do. Here are the potential issues I know of," that will help the collaboration a lot.

Jeff Baskin, Eagle Eye 54:00

Great. Anyone else? Do we have time for any more? No. Okay. Thank you all very much for lending your expertise to the group. We really appreciate it.