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CxVG June 26, 2025 Meeting Transcript

Meeting Facilitator

• James Maxey, Faculty Member, Trinity University

Member Participants:

• Chris Bambury, President, Bambury, Inc. dba BONNEAU
• Raymond Huff, President, Russell’s Convenience/Tenderfoot Software, Ltd
• Lonnie McQuirter, Director of Operations, 36 Lyn Refuel Station
• Alan Meyer, CEO, Meyer Oil Company
• Brad Miller, Sr. Director IT, Coen Markets
• Rob Razowsky, CEO, Rmarts, LLC
• Don Rhoads, President, The Convenience Group LLC
• Babir Sultan, President, Favtrip
• Gray Taylor, Executive Director, Conexxus
• Linda Toth, Managing Director, Conexxus

Guests

• Troy Calhoun, VP Retail, Southwest Georgia Oil Company, Inc.
• Robert Hampton, VGN Director Strategic Growth & Initiatives
• Gary Wren, IT Director, Midwest Petroleum

Meeting Presenters

• Colin Dornish, Managing Member, CSD Solutions
• Anil Bhat, Head of Product – Petro, Verifone, Inc.

Vision Group Network Founders

• Myra Kressner, Founder, Kressner Strategy Group
• Eva Strasburger, President, StrasGlobal
• Roy Strasburger, CEO, StrasGlobal

Meeting:

James Maxey:

Good afternoon, everyone. Believe it or not, we’re up to our fourth meeting, and I say this at the beginning of every meeting, but it just continues to be true: The discussion quality just continues to blow me away. And after looking at the two presentations for today’s meeting, I’m 100% positive the next couple of hours are going to be fantastic.

Before we get started, we have to go through our normal housekeeping. We are recording this session. If there’s anything that you say that you would like to have taken off the record, just let us know either during the meeting or shortly thereafter, and we will certainly take care of that.

We also have the antitrust statement. We can’t discuss pricing policies. Let’s just be cognizant of the conversation and keep it exactly where we’ve been the first three meetings.

If you don’t mind, please use your camera and keep it on as much as possible, but do mute your audio. I don’t know about you guys, but I certainly have some background noises in my personal house, occasional barking dog, stuff like that. Not my dog, but the neighbor’s. We certainly appreciate the candid discussions.

There are a couple of things I’m looking for throughout the meeting. You can use the Raise Hand icon, and I will make note of it. If you use the chat function, more than likely that’s going to take me a little bit longer to spot. If you need to step away, just turn off your screen or simply leave a note in chat and return when you’re available.

Our agenda for today: We’ve done the welcoming and the housekeeping, and we have some new pictures and voices in the room today. What I would like to do is have our first-time attendees give a brief introduction and tell us why you’re joining the group. And one of my favorite things as an icebreaker is to tell us in one or two minutes your favorite technology story that illustrates why you love technology in the convenience industry. I’d really appreciate it. Brad, why don’t we start with you?

Brad Miller:

Okay. My name is Brad Miller, the senior director of technology for Coen Markets. I’ve been working in the IT space for about 30 years across many different industries, but I’ve been in this industry since 2012, and I’ve been with Coen since 2017. One of my favorite technology stories – I’m going to date myself a little bit, but — when my wife and I were very young and our two boys were still babies, I stood up a bulletin board system in our apartment, and by having a bulletin board system that participated in BuckeyeNet because we’re originally from Ohio, I couldn’t get over how amazing it was that I could type an electronic message and hit send, and in less than 24 hours it could get all the way across the state of Ohio. The connectivity appealed to me very, very early on, basically pre-World Wide Web, and I’ve just gotten deeper and deeper with it since then.

James Maxey:

Very nice. Thank you. Gary, I have you up next.

Gary Wren:

Hey, everybody. I’m Gary Wren. I’m the IT director for Midwest Petroleum. I’ve been with Midwest Petroleum for about three years now, so I’m new to the industry, but I’ve been in IT for 30, 35 years or so. I enjoy technology and the change that it can make, and the improvements and the efficiencies that it can bring. I am here to fill in for Kristina Anderson, who is tied up with other projects.

James Maxey:

Some awfully big shoes to fill, if I must say so.

Gary Wren:

Yes. I’m sure she’ll be joining again; she just had some things going on today. We had a new store open the other day. We’re ever expanding, of course, which is good, and staying busy. Like you guys said, the heat, the weather is keeping us busy, as well. We’ve done a lot of ice recently.

James Maxey:

Well, we appreciate you representing Midwest.

Gary Wren:

Thank you.

James Maxey:

Troy.

Troy Calhoun:

Sure. My name is Troy Calhoun. I’ve been with Southwest Georgia Oil Company for about six and a half years. I’ve been in this industry one way or another for 30-something years. Prior to working here, I worked in one of the c-store divisions with Kroger in the Rocky Mountains primarily. I came here as director of marketing and merchandising and transitioned into my current vice president role a year ago, overseeing retail operations. Unlike the prior two gentlemen, I am not an IT person, however, I’m the guy who gives IT all kinds of ideas, so. And then I marvel when they make them work, which more often than not they do. I can’t tell you I have a specific IT story, but boy, do I have a lot of ideas.

James Maxey:

Opportunities for greatness is how you challenge your IT team, yes?

Troy Calhoun:

I hope they call it that.

James Maxey:

Very nice. Gray, Myra and Roy, your opening comments.

Gray Taylor:

My name is Gray Taylor, I’m executive director of Conexxus. I also do some consulting with NACS on special projects. We’re engaged in this share group primarily because we’re looking for stories. We’re not necessarily here to do technology solutions. In fact, I was talking to Ernie Harker on the way back from the Cenex Expo about how important stories are for what we do as a technology standards organization. I’m looking forward to getting your stories. Your IT staff might not be, but we’re very interested in hearing your stories, so that we can start loading some of this stuff into the work items that we do. So that’s my story, and I’m glad you’re all here.

James Maxey:

Perfect, thank you.

Gray Taylor:

Oh, I would like to tell everybody, if you don’t know what a bulletin board is … Some of the younger guys here might not know. [Laughter]

Myra Kressner:

This is Myra Kressner. Good to see everyone. We’re delighted to begin this next Conexxus Vision Group session, and as James said, every meeting has actually gotten more lively and folks more engaged, so we’re very pleased with that. And I do want to make sure to thank Verifone, our Ally Supporter. We’re very appreciative that you are supporting the Conexxus Vision Group. I’m also going to introduce a face that everyone sees on the screen here, and most of you already know him. Robert Hampton is on the call, and we’re very pleased that now he’s working with the Vision Group Network. I’m going to ask Robert to introduce himself and then talk about the Vision Group Network Virtual Global Summit.

Robert Hampton:

Yes, good afternoon, everyone. Thank you, Myra. I know many of you here on the call, and I’ve left Jackson’s back in January. I’ve been really happy to be able to work with Myra, Roy and Eva, helping them develop some things for the Vision Group, and I’m doing some consulting on the side, as well.

No doubt, all of you have seen the invitation and the announcement for the very first Vision Group Network Virtual Global Summit. That’s going to take place on November 19th from 11 a.m. to 2 p.m. Eastern, so it’s a 3-hour summit. Again, it’s virtual. You should already have an invite for that and some information on it. We’ve already had over 70 people confirm, and we expect to have over a hundred participants in this virtual meeting. We’ve got a really exciting agenda, including Gerd Leonhard as our keynote speaker, as well as reports from all seven of the Vision Groups. We’re bringing together all of the Vision Groups in one place for the first time ever, so we can cross pollinate information and ideas from all the different groups.

I’ll drop the link to the Global Summit page in the chat in case you haven’t seen it, so you can get some more information. But again, that’s November 19th, 11 a.m. to 2 p.m. Eastern, and you should have an invite for that. If you don’t, let me know, or if you have any questions, feel free to reach out to me. And thanks again. Good seeing everyone, and back to you, Myra.

Myra Kressner:

Thanks, Robert. Roy.

Roy Strasburger:

Good afternoon, everyone. Along with Myra and my wife Eva Strasburger, we are the founders of VGN. I’m really excited about having you here today, and as Robert alluded to, the Vision Group Network continues to grow. It’s thanks to your support and your involvement that we’re getting information out about technology, how the retail sector is developing and what the opportunities are for us to grow and continue enhancing the customer experience. Thanks to everybody for being here and looking forward to a very interesting conversation today. James, back to you.

James Maxey:

Perfect. Thanks, guys. What we typically do at this point in the meeting is have a lightning round based on the topic of the previous meeting. Last time, we talked about data and how smaller retailers could effectively use data. However, Babir asked two great questions between CxVG meetings. So instead of doing the lightning round, we thought we’d throw Babir in the hot seat and let him present it to the group, and see if we could get some more feedback for him and see what he’s learned over the last 10 days.

Based on his email, there were two things that Babir was looking for. The first was searching for a text messaging system or platform that doesn’t require an app, and the second one was a reliable, I love that word, reliable drive-thru portable POS system, and he received some feedback from that. So Babir, if you wouldn’t mind driving the conversation for the next 10 minutes, and hopefully we can get some better answers for you.

Babir Sultan:

Consumer Engagement Yes, if you missed the email, I’ll get you up to date fairly quickly. For us, we have a limited mobile app; it just does delivery service and nothing else. Over the years, being a tech-driven person myself, we developed our own app. It was in-house. We weren’t very happy, because it was very optimized for iPhone, and it wasn’t great on Android devices. Eventually we kind of scrapped that app, and the eye-opener for us, was the app had a feature that allowed text clubs. Soon after, we noticed a lot of older folks were coming in with their flip phones and saying, “Hey, I remember you said it’s 20 cents off a gallon on Friday,” even when the app was dead long ago.

So it hit us that the text club was very easy to use and effective. As we dig more deeply into it, we notice the ease of signing up for our texts, and owning space in their phone number, so to speak, versus an app, which is easily deleted, is very different. And over the past eight years, we have collected about 17,000 text club members, which is huge for us. We promote Fav Trip Friday, when we give a gas discount. I have data from the past eight years that shows on Fridays we always double our sales, and we recognize that our social media and text club corresponds with that.

The bad side of that is that as we grow further and further, we went through a couple of text club companies that said, “Hey, it’s great that you have such a big following, but you need to have some sort of enterprise, McDonald’s-level package, because we thought a small gas station like yours would have maybe 50 or100 signups over the years.’ And they said, ‘to be honest, most companies try a text club for a couple of years, then they either discontinue it or don’t promote it and it disappears.” But we’ve been very consistent with this, and I think that’s the big takeaway with these marketing or technology campaigns: We have to give it fair time to catch on and to grow.

So our cost has gone higher and higher. We went through a couple of different companies. Now, we pay a little over $700 a month for it. And now they’re saying, “The way you’re growing, we’re going to have to renegotiate that plan.” Me being the cautious businessperson, I want to think through that and consider: What are other solutions out there?

We’re also considering revisiting the app. That would remove some of the text load, maybe, and allow us to go back to push notifications. That’s where we are with that text club membership. I would welcome any feedback from this group on that situation.

James Maxey:

Does anyone have any experience that they can share regarding texting to your consumer?

Linda Toth:

We use MailChimp, and MailChimp does have a separate service that allows you to do SMS text messaging. It’s not part of the standard plan. I don’t know if it’s going to save you money or not, but it’s certainly scalable. I mean, that’s one of the things they do, so it might be worthwhile. And that’s called MailChimp.

Babir Sultan:

Yes, we used them for emails in the past, but I didn’t know they offer texting. That is interesting.

Linda Toth:

Yes, it’s a separate plan.

Babir Sultan:

Got it. Okay. I’ll definitely explore that.

James Maxey:

Gary, what do you guys have going on at Midwest?

Gary Wren:

We use Twilio to reach out to our customers for text messaging and advertisements, and for sign up for our rewards program. Customers text our number and can sign up for rewards on there, and that’s pretty much just a messaging service. It ties into our app, but it’s independent from the app, so you don’t need an app or anything with it. And it runs us $300 to $500 a month. And I think we sent, I don’t know, something like 35,000 messages last month, and it cost around $350.

Babir Sultan:

Okay, that’s pretty good.

Gary Wren:

It’s pretty simple. You can program a flow however you want, so you can send out, get a response, have your own response based on how they respond back to your question. To sign up for rewards, we just ask them your name, phone number, date of birth, and we get that back, put it in the database, and now they’re signed up. That cost us almost nothing with Twilio. I mean, it’s pretty affordable on a month-to-month basis.

Babir Sultan:

Got it.

James Maxey:

Perfect. Brad?

Brad Miller:

We have a loyalty program through Paytronix, and that platform has the ability for us to text our customers, is prohibitively expensive, and, as a result, much like you Babir, we rely almost exclusively on emails and push notifications within that. But we are trying to streamline our recruiting process and make it easier for people to apply for a job with us, because turnover, as you know, is a universal issue we all deal with. We have just started to dip our toe into the Twilio swimming pool, because that’s a platform we’ve signed up for that’s going to let us do this communication via text with potential applicants and even potential new hires. One thing that jumped out at me, and my time spent in that environment’s very, very slim right now, but I was shocked at how inexpensive it was based on the volume that you can turn with it.

Babir Sultan:

Brad made a good point. We utilize some of that for job applicants, and it is very successful signing up people or putting up a sign with a QR code, or send “Job FT” to a certain number and they get an application, and they just reply with their phone number. It’s an easy sign-up process. It’s neat that you’re doing that.

Gary Wren:

Yes, it works really well. We send out very few emails anymore. Pretty much everybody’s text-based.

James Maxey:

Perfect. Robert, I see you have your hand up.

Robert Hampton:

Yes, I had experience previously with an API where we wrote our own front end and went out to a service. It sent SMS messages for us, and we could customize them however we wanted. We didn’t use it for customer interaction, but we used it for employee interaction to fill a shift. If we needed to fill a shift, people would sign up, and we could say, “Hey, we’ve got this open shift,” and people could respond, and then we would do it. We could customize the message. I’m sure you could use it for customers, as well. We wrote it internally and leveraged an API to send the messages out on our behalf. I can find out what that was, if that would be helpful.

Babir Sultan:

Yes, I would appreciate that. And since we’re sharing ideas, I know a QSR franchisee that uses text as a means of training. If they have a new hire, he can text “tomatoes” or the name of a certain sandwich to a corporate number. It will respond with instructions such as how to cut an ingredient or make a certain sub.

In my case, we’re making Caribou Coffee, and if I have a new hire that says, “I don’t know how to make the mocha latte caramel sugar-free with almond milk,” he could literally text the menu number and receive word-for-word instructions. We took it a step further and started adding unlisted YouTube links where we could train our staff on these things. We don’t sell a lot of gift cards, except during the Christmas season. So if an employee texts “gift cards,” it sends them a 30-second or 1-minute video to show them how to activate and sell a gift card. It’s something we often overlook, but this service is internally and externally accessible. I think the power is only in the imagination of the operators.

James Maxey:

And they’re using the device that’s already in their hand. Or back pocket.

Babir Sultan:

Correct, yes.

James Maxey:

Very good. Great feedback. Babir, do you want to talk about your POS system question, as well?

Babir Sultan:

Drive-Thru Yes. Just to get everybody up to speed on certain things we do: We started using drive-thru way before Covid. I shouldn’t say Covid made it cool, but Covid made it necessary, I think, when the shift happened. Before Covid, we used to have a 30-70 split where people would come in the store more than use the drive-thru. They thought it was pretty odd that a gas station had a drive-thru. But after Covid, the split went the other way, where the majority of our folks come through the drive-thru we’re proud to say. And again, as an operator, we’re never satisfied, we want to improve and improve. We went to different QSR locations for ideas. We found Chick-fil-A had the best drive-thru experience, absolutely.

We took each staff member in different cars and ordered multiple things at different locations to see how they went about their business. But one thing that stood out to us, besides the customer service, which is great, is how they will take an order, ring it up very seamlessly, collect everything.

Our drive-thrus are open 24/7. We offer almost everything in the store. We even started selling coffee and fountain drinks now, too, which we avoided. We don’t sell lottery tickets, so that’s not a problem. That would hold up the line inside and outside, which we want to avoid. Today, we know exactly what time the drive-thrus are busy and we overstaff to meet the demand. We’re taking a Clover device that is not connected to our main point-of-sale, the C18 point-of-sale solution from Verifone. We have to print out separate reports, and if they don’t line up correctly, it’s just not a good experience for our staff and even our customers. So we are trying to find a way to bust the line.

That’s where we are, and we’re optimistic. We did talk to Anil and the team at Verifone, and we think we could come up with a solution with them that could potentially work for us.

Gray Taylor:

I’ve got a question, because every time I’ve talked to other operators and they’ve tried to do a drive-thru, their advice has been, “You can’t do the whole store. You can’t get people through on a fast basis.” But you’re able to do that?

Babir Sultan:

Yes, we’ve been doing it for many years now. That’s definitely a differentiator. We do find some staff members don’t want to do it because they might get backed up if we’re understaffed.

And it is very tedious when a customer says, “Give me five Monsters and a fountain drink and a pack of Marlboro.” Right? It’s a very tedious process. So we overstaff. We try to have three or four people during a busy shift, especially on Fridays. When the line gets long, they’re going out and taking orders and running back in, ringing it up, then delivering to the car, giving change or returning a customer’s credit card.

And some people don’t feel comfortable giving their credit or debit card to us. We say, “Okay, here’s a solution, just swipe it right here” [on a portable reader]. Even that, we think we could do better. For us, when we look at acquiring a store, the first thing we check is, can we either retrofit a drive-thru with the city’s permission and blessing? If we build a store, we definitely put it in our plans. A drive-thru is a must and a good differentiator for us. We see moms and kids come through.

Gray Taylor:

When you do drive-thru, are customers just ordering and then you’re doing curbside fulfillment, or they’re ordering and waiting at the window?

Babir Sultan:

They’re ordering out the window, and we just hand it to them. But if they’re busting the line, employees take the order to the car. He’s handing the order to them. And we do have folks that go a little overboard through the drive-thru. “Find me an extra-minty gum.” We have to scan the store, and eventually I had to say, “Okay, that’s quite enough.” We’ve never had to turn folks away, but if somebody’s holding up the line because they’re ordering so many things, we’ll probably say, “Please pull up over there.” Or, “Could you come inside? That’s such a big order.”

Lonnie McQuirter:

Babir, what kind of performance are you measuring for with your drive-thru, or what KPIs are you using to see if it’s a success or if it’s not?

Babir Sultan:

This is a great question. We try to avoid saying, “Just get people in and out as quickly as possible.” But the worst thing that happens is if you get 18 cars lined up, the last three are likely to leave. And the way our drive-thrus are set up, we have people who are in a hurry who will leave even after they order if it’s taking too long to deliver the products. There’s a 20% chance they’ll come inside because they got tired of waiting, but a majority of them just take off. That’s the most heartbreaking for us as an operator. We’re in the early stages of testing AI to detect how quickly a customer gets served. So to your point, success to us looks like within a matter of seconds, the customer is served and off the lot as quickly as possible. That’s our measurement.

Lonnie McQuirter:

Great. Follow-up, if you can share it: What percentage of potential customers abandon the line then because they can’t get it fast enough? And about how many people are using the drive-thrus a day per location?

Babir Sultan:

The split now for us is 70% of people are in the drive-thru, 30% come inside, but it varies by store. One store is only 2,000 square feet or less, it’s very small. Another is more than 4,000 square feet, but that drive-thru is not as busy as the smaller one, which has been established for many years. So the split between the drive-thru usage versus the in-store is 70/30 now. Before Covid, it was the opposite. People now are very comfortable not getting out of the car and being served.

And as I said, right now we’re using AI to detect how quickly somebody gets served. We want to get to the point where we know if the last cars are taking off because we were slow with service or did they wait less than a minute and were unreasonably impatient? And we’re hoping to use AI looking at the plate number to detect these factors, to determine why we lost that customer.

Lonnie McQuirter:

One last question here, sorry to dominate. Is the drive-thru open limited hours?

Babir Sultan:

No. All of them are 24/7.

Lonnie McQuirter:

So, 24/7 access to the store, as well as the drive-thrus?

Babir Sultan:

Correct. Yes.

James Maxey:

And is it card only?

Babir Sultan:

No, cash, card. You want to use Bitcoin, we’ll take it all. No checks though anymore.

Paul Robertson:

Do you have more than one drive-thru?

Babir Sultan:

We have two locations that have a drive-thru. At the others, the buildings are structured against a wall and we bought them as is. You can’t do too much to them.

Paul Robertson:

Are you measuring the statistics of one drive-thru versus the other to see if the demographics of one area versus another affect those patterns?

Babir Sultan:

Yes. We’re very heavily invested in demographic data. These two stores happen to be far apart enough from each other where the demographics and the customer behavior is very different. One store has Caribou Coffee, and people are more patient at that site. The other one doesn’t have the space for Caribou, so customers are more likely to buy tobacco and especially cigars. In one, dog treats work well, and we’re getting granular, seeing which store has what size of dogs. One store needs to keep big bones for pit bulls, and the other one has mostly chihuahuas, so we go with a little bone. So yes, we’re very much invested into this thing.

Paul Robertson:

Oh, my goodness. Very cool.

James Maxey:

Amazing. Robert, why don’t we do one more question, then we’ll get to today’s topic?

Robert Hampton:

Great. This is fascinating, Babir. I heard you say tobacco. So it sounds like you’re doing age restricted through the drive-thru. Does that include alcohol?

Babir Sultan:

No, we don’t sell alcohol, lottery or money orders at our stores at all.

Robert Hampton:

Okay. It’s just age-restricted tobacco.

Babir Sultan:

Tobacco and cigars … and anything else in the store: drinks, milk … you name it, we’ll grab it.

Robert Hampton:

AI Okay. And then a second thing, I heard you mention AI to help you with the queue. I did some work previously where we used computer vision, and we went and saw SparkCognition—now known as Avathon—down in Austin. Conexxus worked on that technology. There’s a lot of tools you could use to count queue length, length of time in the queue, LPR (license plate recognition), which it sounds like you already know. But I was just throwing that out there if you haven’t already looked at it.

Babir Sultan:

Yes, I heard about that during the NACS Innovative Leadership Program at MIT. Coming back from that conference is a matter of problem focus, and we say, one problem at a time. There are so many things that you could look into. Especially with AI, you’ve got to really ground yourself to not do everything. For us, it was like, first let’s get the demographics down. Okay. You got that down, you know who you’re serving, what your avatar is. Next thing is, okay, how do we serve them as quickly as possible and what time is it really busy that we need to staff up? It’s things like that that we need to conquer one thing at a time.

But with AI, there are so many solutions out there, and we do tap into our existing cameras to start leveraging those. Heat mapping, for example, is very different from in-store versus the drive-thru because customers don’t stay that long. So you have to reduce the time and tell the AI to look at it in a different timeframe.

We also tested a model with the plate numbers, which plate is repeated here. Is he a regular customer? Can we find a way to notify the staff that a customer has arrived? And you’ll be surprised how delighted a customer is if you say, “Today’s coffee is on us,” because you know he’s been coming to the store for so long. I will follow up with you for more about that company.

Robert Hampton:

Yes. And the computer vision can detect the type of car, as well. It can say, “This is a Mercedes versus a Yugo,” and that might be good to know.

Babir Sultan:

Yes, absolutely.

James Maxey:

Very good, Babir. Thanks for letting me put you on the hot seat yet again.

Babir Sultan:

This is good. It’s great to be among the IT folks. When I started in this business, I struggled to find my niche in the market with IT folks. So it’s good to be here and brainstorm with you guys. I look forward to these meetings.

James Maxey:

Digital Coupons Perfect, thank you. Well, today’s topic is electronic coupons. I did some brief research this morning to find out when the first coupon was introduced and I was surprised. Gray, do you know what it is, because you smiled?

Gray Taylor:

I don’t know, but I’m going to speculate it was 1890.

James Maxey:

Wow, I’m impressed. 1887.

Gray Taylor:

I’m within three years!

James Maxey:

The company was, believe it or not, right in the middle of our industry: Coca-Cola. They were doing manual coupons offering a free glass of coke, which would cost 5 cents. And between 1894 and 1913, one out of nine Americans received a free Coca-Cola over that time period, giving up 8.5 million free drinks. I love fun facts. There’s your fun fact for the day.

Gray Taylor:

And back then it had cocaine in it, and so if you could just get them to drink one drink, you have them coming back for life.

James Maxey:

Well, there is that. Medicinal values.

Gray Taylor:

That’s right.

James Maxey:

I’ve been involved with testing coupons at dispensers. I’ve been involved with testing coupon printers at registers similar to grocery stores. But I love where the topic is taking us today because right now there are 317 million smartphones and 98% market penetration of smartphones in the American public’s pockets. And I just think we’re at the ideal time where we can start communicating to our consumer right there in their car, in their home, wherever they’re carrying that phone. When I heard we were tackling this topic, I thought, “Wow, we as an industry are finally there.” We have two presenters today. We have Colin Dornish. He’s from PROSPR. And we have Anil Bhat from Verifone. I would tell you guys how many years I’ve known Anil and how many hours we’ve worked together, but we both deny it.

But we’ll start with Colin. He has a great background in industry leadership roles. He was a corporate development and financial planning and analysis manager. He’s also been in operations. He’s been vice president of innovation. He is a managing member of CSD Solutions, which is a growth industry advisory firm dedicated to helping retailers with strategic planning, digital transformation and operational excellence. I love that. Today, Colin’s going to talk about PROSPR, which is a platform that was actually launched by NACS that’s transforming the way coupons are distributed. With that said, I’m going to put myself on mute and enjoy Colin’s presentation. Colin, take it away.

Digital Couponing

Colin Dornish:

[Colin Dornish Slide 1 – PROSPR Promotions. Profits. Possibilities.]

Well, thank you and good afternoon, everyone. Thank you for allowing me to join today’s session. I’m here today to talk about significant transformation happening in the convenience store space, one that has the potential to reshape how we connect with consumers, drive revenue and tap into an entirely new pool of promotional dollars. Through the PROSPR initiative, we’re not just talking about better coupons; we’re talking about smarter digital pathways, a stronger ecosystem between retailers and suppliers and a way to unlock CPG spend that has historically never been touched in our channel. Let’s dive into what that actually means.

[Colin Dornish Slide 2– Today’s Session]

We’ll define what PROSPR is, utilizing 8112 coupons and what we can actually unlock with these coupons. I’ll give you an opportunity to see the customer journey, show you a little bit of an active case study that’s out there, leveraging 8112s, and then show you the setup of where these reporting dashboards are. Let’s dive into what this actually means.

[Colin Dornish Slide 3– PROSPR Mission]

NACS is the backing behind PROSPR. It saw an opportunity to bring this to the industry, this opportunity to access this consumer discretionary spend and associated revenue. We are working with suppliers to bring these digital promotions to the convenience store shopping experience [and] actively working on behalf of the NACS membership with suppliers and retailers to ensure that this ecosystem is getting robust offers. But there’s also an opportunity that we’ve uncovered through this mission to really help retailers enhance their own private label and foodservice offering. 8112s can also be used for retailers to enhance their own offerings.

And really what we’re trying to do is create opportunities to increase site footfalls and grow sales by targeting these non-loyalty and new customers for your sites. In talking with a lot of retailers, I think that there’s this really big belief that there’s some really great loyalty programs and that everybody’s a loyalty member. And then when you really break down some of the numbers, even if you have high penetrations of 20%, 30%, 40% loyalty penetration, that still means you have either 60%, 70% or 80% of your customers that are not in the loyalty program. So PROSPR is really one of those tools that you can look to attract to try to get those customers to come into your locations and to entice them with offers that might not be available elsewhere.

[Colin Dornish Slide 4 – Digital Revolution in Promotions]

This is a digital revolution in promotions. We’ve all heard the term or may not have heard the term 8112, but we pretty much familiar with 8110 being the paper coupon and the difference between the two is 8110 can be either paper or app based, whereas 8112 is a universal, digital coupon that can be either manufacturer funded or now we can have it as retailer supported. But really the difference is security. The validation on 8112 is going to be at the point-of-purchase. You’re going to be able to accept this as a loyalty application versus having to set it up in your point-of-sale system. And Anil will go through that in a little bit more detail. So you don’t have to go through the family code setup that you would on an 8110 coupon.

The other side of the 8112s is that these are single use. You’re really able to control the promotion to quantities. And manufacturers and suppliers are extremely excited about this aspect of 8112. What that means is that if they come up with a campaign that says they want to do 100,000 units or $100,000 of promotional discounts, the system is able to stop after that 100,000 has been redeemed. Whereas when you look at 8110s, that technology is not there to be able to aggregate some of that stuff.

The settlement process is through the cloud, and we’re leveraging our vendor partners, so settlement is going to be much faster and automated. The retailer is going to be able to receive their funds quicker than what you would in 8110, way faster than you would on a paper format where you would have to go to a clearing house. As previously stated, the security is highly secure. These are serialized coupons in the 8112 world versus 8110. And there’s a lot more flexibility. You’re able to create targeted, flexible offers with 8112 that are not available today in the 8110 world. This is opening up a whole new world in the supplier world that is really intriguing, and that’s really where this is unlocking a whole new world of dollars, right, because we’re not just talking about what has been the status quo for the convenience store channel. This is a whole different bucket.

[Colin Dornish Slide 5 – Unlocking CPG Marketing Spend We Don’t Have]

PROSPR calls this the blue ocean of digital consumer dollars. We’re stepping outside of the convenience channel’s average and standard protocol for receiving trade and sales funding and shopper retail funding. We’re going into that national bucket and the marketing branding buckets to get these suppliers to recognize, hey, there’s now really an opportunity to reach a whole different consumer with a platform that is now running across the nation versus just segmented in whether it be a local region or a few states. This is going to a whole different part of the CPG world. Gray can attest as we’ve gone through some of these conversations with the supplier, even just talking to the right person within these companies, there’s roles that you would not believe are created in terms of a digital coupon competency person inside of company ABC that just handles the digital aspect and the marketing side of these national brands.

What this means is that we’re not just going to sub dollars from the convenience store channel’s allocated funds. These are coming out of the national shopper marketing funds that the big CPG companies have allocated for launches and new innovation and whether it be trial size or specific campaigns. This brings us more in line with what grocery stores and some of the other big box players are seeing and gets us into this new promotional frontier. 8112 is how we’ll have to get there due to the serialization, the security and getting suppliers comfortable to put this money out there versus some of the 8110s. Currently today, a lot of retailers have some 8110s. There’s some CPG stuff going through it, but really that’s just picking up some of their trade dollars and moving it from one bucket over to another bucket.

[Colin Dornish Slide 6 – PROSPR Customer Journey]

Let’s walk through a real customer experience using 8110. Here is a live example of what a customer would see. This is leveraging the Coupon24 app. They would see a listing of stores that are participating. In this particular example, there’s CVS, Lowe’s Market, Oasis, Stop and Go, Loop Neighborhood stores. So they’re able to see who is participating around them. They’re able to see what promotions there are, Procter & Gamble, Nestle, Loop, in this particular instance. When they click into what is called a gallery, they’re able to see the different promotions that may apply. And then furthermore, when they drill down and choose that specific offer, they’re able to see, okay, where is the nearest store?

Within that coupon detail you can see, here’s the offer, buy one, get one free. Here’s the expiration date, here’s the description of it. There is your barcode; it’s scannable. The application has a lot of technology built into it that’s going to allow it to be scanned by a regular barcode scanner, a QR code scanner, typed in manually as in 8112 as a manual entry. It’s pretty adaptable for point-of-purchase, but its preference would be to be at a 2D barcode scanner. And then over in the far right you’re going to see when a customer clips that particular coupon. They’re going to get it into their basket. And right now it’s going to say, if I added that gummy bear coupon and I already had an existing coupon in my basket, there’s an ability to stack or multi coupon code and create a coupon basket. So when you think about creating less friction for the consumer and more promotions out there, there’s really an opportunity that a consumer would have many different coupons in their particular coupon basket and be able to take that up to the register and with one scan be able to decrement the sale by several different offers.

Within that coupon, generally, they’re going to see what’s on promotion where they’re able to take these promotions and apply it all with a single scan at the register. As more and more suppliers get put into the offers, it’s going to become more and more important to have participating stores and looking at, hey, where can I take this particular offer?

[Colin Dornish Slide 7 – Case Study]

And with that, looking at a case study, CVS, a very large, national chain, went live this past January, and they’ve got some really strong numbers. When we take a look at CVS, they launched their 8112 offers in January of 2025. In just one month they had over 2 million clips and that was thousands of daily redemptions. 27% of shoppers came back for more, and 50% to 75% of shoppers scanned products that converted to a purchase.

Those aren’t just nice numbers, those are real behaviors showing real value. And the tiered redemption rates over to the right, those are extremely impressive in terms of top tier being 20-plus percent, second tier being 10% to 15%, and then third being 3% to 7%. A lot of the items within their store, if we take two to three runs, we’ve got a lot of similar products in terms of candy and packaged beverages. And more and more of those products are starting to come online. They’ve got about 7,500 locations across the country on board within Coupon24. That means that there’s a good number of participating locations already across the nation, as well as they’re getting more and more users that are starting to become familiar with how to use an 8112 coupon and get that benefit, get the immediate reduction in price of their product and save on everyday purchases.

[Colin Dornish Slide 8 – Dashboard. Settlement. Offer Control.]

The big key with this from a retailer perspective is that transparency is going to be key here. The adoption of these dashboards from a retailer’s perspective will allow you to track and see what you have going on in terms of your location with regards to offers, clips, redemptions. This [slide] is a very illustrative effort we did to show a stylistic view of how we’re kind of going to do the dashboards for campaigns. You’ll see for this particular example and sample, we’re running a free bottle of water and a snack. We ran this with no signage, no promotions, no alert to the customer that we had anything there. We were just trying to get some data to create this particular dashboard view and just trying to create some stuff to show the end user what a report might look like. This was the end product.

Without any notification to a consumer, we, in a given period, had 760 clips. We had low redemption. But this is what it would look like in a live environment to show what real-time redemptions would look like. Here’s what offer activation and expiration controls would look like. Here’s what the settlement file could potentially come through. And we would work with the retailer in terms of how they would want that particular file to come, whether it be on a specific frequency and so forth. And then there’s plenty of custom offer creation tools out there. It’s a robust tool, not a set-it-and-forget-it type. Very dynamic data-back platform where the retailers in the driver’s seat on the offer/creation side but then also able to accept these coupons from the manufacturer side.

[Colin Dornish Slide 9 – Value Propositions]

At the core of this initiative is a simple but powerful mission. We want to increase the industry profits by accessing new consumer discretionary spend through PROSPR and access working to drive non-loyalty traffic, reduce acquisition costs, expand foodservice and private label sales, and give retailer tools to compete digitally. This isn’t about replacing loyalty; it’s about amplifying it by catching those outside of your traditional orbit.

To summarize the win for retailers: This is more traffic, lower acquisition costs, zero fraud and lower setup friction. For CPGs, this is better ROI through higher redemption rates, better targeting and faster attribution loops. And for consumers, it’s easy savings without the tech headaches, real value in an inflationary world and flexibility across retailers. And in this model, everyone wins and that’s what makes it powerful, and that’s really why we ended up calling it PROSPR because everybody becomes prosperous in this particular scenario.

Gray Taylor:

I should add on the loyalty side of it, NACS has allocated another $300,000 to finish what we call the PROSPR Aggregator, which will allow anybody’s loyalty program to connect into Coupon24 and directly access the content. The customer would actually pull down coupons from C24. And we have two loyalty programs that have already agreed to or are on the cusp of agreeing to do the aggregator interface. It will become a standard.

Colin Dornish:

Yes. With what we’re seeing with CPGs looking at where they’re going to spend these marketing dollars and coming back through, whether it be with new innovative products, research and development, or relaunching old staples, this is where the rubber meets the road. What we’re hearing from suppliers is they’ve got to be extremely strategic on how they’re playing around with price, especially in this environment right now. Because we’ve kind of gone through the last several years with a lot of price increases. We’ve gone through shrinkflation. We’ve gone through pack-size changes. And they’re trying to protect all these different things. And really the one clear answer is in order to protect brand equity is coming through this promotional avenue. It’s resonating with them. They just want to do it in a way that is controlled. So there’s a lot of pros that are out there for the CPG companies. And in an avenue where they don’t have to do it piecemeal on a one-by-one basis, there’s a lot of folks that are receptive to the strategy on 8112 and aggregating it across the board. Right now the timing is you’ll see more and more offers coming. I know that next month there’s a very large manufacturer coming on with a potential offer for a product that’s in all of our stores.

It’s just starting this snowball effect where more and more offers are coming, and as more and more retailers start to accept it, it will just continue to get larger and larger and larger. And then to that effect, I know that Anil will talk about the ease and the opportunity to set up the actual program versus some of the other platforms that are out there. In terms of the technology lift or the overall project to get going, it is very simple to get an additional loyalty program set up and start accepting 8112s at your location.

[Colin Dornish Slide 10 – Best Next Steps]

I think the one thing too that’s been illuminating for a lot of folks is they’ve gone through this process is the best way to experience how easy this is and how impactful this can be is to become a user and try it yourself to understand how this can work for your locations. To download the Coupon24 app and engage in the customer experience, it takes about 15 to 20 seconds. You’ll get a text message, and you will start to see the offers and what’s out there. Like I said before, obviously CVS is part of the case studies. There are several other chains around the country that are accepting it, as well. And you can go into those locations and see the acceptability of it is quite easy. And then from there, it’s about reaching out in terms of how you would like to get your locations set up and start to pilot this or get your location set up on an acceptance process.

And the number one thing project-wise, this is going to be run by retailers and NACS members. Setup is not going to be a massive project. The program has fees associated with it that are tied to the cost of promotions, but CPG companies will pay for funding toward each individual promotion. Unless you decide you want to do your own individual company 8112 and have a discount and so forth, the program for the most part is free for you to set up. You would receive nominal handling fees on the coupons just as you would for any other coupon you would accept. So, there’s not going to be a massive enrollment effort or structure for you to have to absorb to get going on the program like some other folks.

James Maxey:

Colin, that’s fascinating. Just listening to your presentation, I don’t know about everybody else, I have four questions and two comments that I’ve already generated. I’m sure everybody else has done the same, but what I’d like to do is, let’s hold off on the questions until we hear Anil’s side of the presentation. Anil and I have worked together for about 25 years, going back to that first meeting where you guys introduced Topaz to us in that small conference room.

But one of the things that always frustrated me in terms of running an IT department is that the retail side of the business goes out, they hear presentations like this and ask, “James, we’re going to go do it. When can you get it done?” And then I start digging under the covers and I have to go back to them and say, “Well, I need to do a new version with Verifone. I need to get new scanners. I need to do such and such…” And all they hear is Charlie Brown’s teacher: “Wah, wah, wah.” It’s like, “Okay, James, that’s fantastic, but when are we going to do it?” Well, I just explained to you, it’s a three-month project. “No, James, you don’t understand. When are you going to do it?”

With that said, I want to turn it over to Anil so he can talk about some of the background core of this. Anil is the head of product development for the petroleum/c-store group at Verifone. He brings three decades of experience or industry experience. He has extensive background that includes defining and implementing solutions across multiple product generations. I can certainly attest to that. He’s definitely an expert in the convenience sector, and he currently chairs the POS Back-Office Committee with Conexxus Standard Body Group. Anil, welcome, and I’ll let you take it over from here.

Anil Bhat:

Sure. Thanks, James. And you finally left the industry when you could have just said, “Hey, here’s a solution. I’m ready to implement it,” right?

James Maxey:

Oh, well.

Anil Bhat:

[Laughs] Thank you for the intro, and Colin, thank you for that excellent presentation of an overview of PROSPR.

[Anil Bhat Slide 1 – PROSPR Digital Coupons (black background)]

As Colin said, the setup itself is fairly easy. I’ll walk you through what is required to get the PROSPR or any kind of digital coupons working. I’ll be using the Verifone POS as a reference.

[Anil Bhat Slide 2 – PROSPR Requirements]

Why is it easy? This PROSPR solution essentially leverages an existing solution that’s already in place in most of the c-store industry’s point-of-sale systems, and that is the loyalty interface. If you look at digital coupons, really it has the same characteristics as a loyalty solution. You have a unique identifier, you have a basket, and you have some action taken based on both of those. In the case of loyalty, typically, it’ll be earning points based on what you bought or getting some redemptions based on what you bought, some discounts, ticket level, item level, any one of those.

Digital coupons pretty much follow the same pattern. You have an identifier in the barcode that’s with the consumer, and then he obviously has to buy certain items for him to qualify for that. There’s a basket that then gets to somebody, a loyalty processing host or some host that can process this, and then come back and say, “Please apply a discount.” Same concept, which is why we are able to leverage the existing loyalty interface. And that’s one of the reasons, to James’s point, this is a solution that you don’t have to say, “I need to wait for a version,” because the loyalty interface itself has been in play for almost 15 or 20 years. Conexxus loyalty standards have been in play for at least 10 to 15 years. This is based on the Conexxus loyalty standard. That’s why I say pretty much any POS vendor should be able to support this. We do recommend version 1.3 just to make sure all the elements that we can leverage from the standard are in place. One of the key factors that we need to consider is that as a retailer, you probably already have loyalty solutions, whether it be major oil loyalty or your own loyalty. This has to coexist with those loyalty solutions. Ideally, your peers should be able to support multiple loyalties in the same transaction.

[Anil Bhat Slide -3 PROSPR Transaction Flow]

I want to briefly walk through the transaction flow before I get into the actual setup requirements. And the reason I wanted to do that is just to highlight that the flow itself should be very familiar to both the cashier and the consumer. Just like today, the cashier would be scanning items, and the customer presents coupons. In the past, you would’ve presented those printed coupons. Going forward you’ll see more and more of them presenting the coupons either through an app or through an email blast or even a text blast as mentioned earlier. You could get an 8112 coupon potentially through a link from the text. The cashier would scan the coupons. The basket with that coupon ID is then sent to the PROSPR host. PROSPR would validate the basket, making sure the valid item is in place. Or if the customer has some coupons up in the cloud, it can validate and take those coupons, as well. Then it sends the discounts back to the POS, which then updates the ticket total and prints the receipt. Pretty simple. Pretty similar to how today’s coupons work, except that now you have an online entity that is validating the coupon and giving the discount amounts.

[Anil Bhat Slide 4 – Program setup]

There are two key elements of the setup. One is setting up the program. It is based on a loyalty configuration. When you sign up for the program with PROSPR, you will get certain data elements from PROSPR that are needed here. One of them obviously is the dealer ID or some kind of identifier that uniquely identifies you as the retailer with PROSPR. In addition, you would also be getting the IP address and the port. This is the PROSPR host that the transactions are sent to. You need to import those three elements. You may input the program name itself, also.

As far as IP address and port, one of the things that you need to take care of is notifying the MNSP (Managed Network Service Provider) that you are enabling a new program to make sure that the IP address is whitelisted. And make sure to enable any specific setting related to multiple loyalty programs.

[Anil Bhat Slide 5 – Coupon setup]

The second piece of the setup is the coupon setup. This is defining how the POS identifies a coupon. There are two types of 8112 coupons. There’s one with 16-digit lengths and there’s another with 38-digit lengths. In our case, we would have two different configurations that you’d have to do for those coupons. All of these coupons start with 8112. That is the unique identifier for us. And then you would specify the length of the coupon, so that’s why we have two different coupon configurations. The other thing that you need to make sure is that you associate it with the right program. Because you have multiple loyalties in play at the store, you need to make sure that, whenever you see this identifier or this barcode or identification code, it needs to go to the processor host, not to any other host.

One other item, as Colin mentioned, we do want to make sure that you want to satisfy the customer. So, for some reason if you’re unable to scan the coupon, you do have the option to manually enter the coupon. I understand entering a 38-digit coupon could be problematic, but you still have that option where the cashier can do that. So, if there is a setting related to that, you need to enable that.

[Anil Bhat Slide 6 – Scanner]

Another thing we need to check is that you have the right type of scanner. These scanners have to be 2D barcode capable, which should not be a problem at all because those 2D barcodes have been in play for a long time, especially with driver’s licenses, so most stores should have these scanners. The other thing is that because more and more of these are going to be coming in on mobile, you would need an imager-based barcode scanner as compared to the traditional laser scanners because these imager-based scanners, they take an image of the barcode and then they use software to decode the barcode. So, that’s a key aspect. Again, scanners bought in the last few years, more than likely, are going to be imager-based scanners. The final method is just to make sure that you have the barcodes programmed. Again, if they’re programmed already for 2D barcodes, then you should be good on that.

[Anil Bhat Slide 7 – Receipt with coupon]

On this slide, I give you a glimpse of what a receipt looks like with a coupon. This is an example of a coupon for the Tide product. As you can see in the receipt, you have the item itself and then a discount of $3 that was given because of the coupon, and the total adjusted. On the bottom side of the receipt, you will see that this was applied using the NACS Digital Offers loyalty program. And toward the end you see three lines starting with the PROSPR coupon. That is text that is actually coming from the PROSPR host that clearly identifies that this is a PROSPR coupon; it’s an 8112 digital coupon, and the actual coupon number that was used, as well. Now, all these three lines come from the PROSPR host. This is customizable. They can send whatever QR message they want to send down.

[Anil Bhat Slide 8 – Reporting]

And the final element, Colin touched on the fact that for the retailer there’s a variety of data that’s available, including a settlement report that’s sent down. This slide is a view from the PROSPR end as to what coupons have been redeemed at what stores. In addition, at the end of the day, this is real money, so just like card processing, you need to have reports and data from both ends. We also provide on the POS side a detailed report and a summary report. You can use both of these reports to match up against any reports that you get from PROSPR. And in case of disputes, you obviously can go into the detail and reconcile that. That provides all of the data elements you need to make sure that you get your money back and in place. So, that was pretty much a quick overview. It’s easy. James, I think I finished it in 10 minutes.

James Maxey:

Outstanding! Thank you, guys, for great presentations. Since I have the floor, I’m going to ask the first question, and then I’ll open it up for the group. Anil, you were talking about using the loyalty system. Do I have to have a loyalty system and PROSPR or can I only have PROSPR?

Anil Bhat:

Our POS comes with built-in loyalty support. We can support up to four different loyalty programs simultaneously. So, PROSPR fits into one of those four slots. We are just leveraging the loyalty rails to facilitate PROSPR coupons.

James Maxey:

But I don’t need a third-party loyalty system to handle coupon configuration or anything else. If I just have a relationship with PROSPR, I’m good to go.

Anil Bhat:

That is correct. You have a relationship with PROSPR, and PROSPR would give you the dealer ID and the IP and port. You just go ahead and program that into the POS and you’re good to go.

James Maxey:

Fantastic, thank you. Let me open up to the floor. Who has questions? Ray, looks like you jumped up first.

Raymond Huff:

How long does it take to get your money back? With paper coupons, it can be months and months and months. Paper coupons are just terrible. If you are doing 8112s, it goes out, it’s gotten approved by Tide, how long before the retailer gets a check?

Colin Dornish:

[Retailers] are getting their money back in about a week right now. That is the target timeframe with the settlement. They can see the transaction, and they’re settling up on a week timeframe.

Raymond Huff:

Okay, that’s fair. And there’s no additional costs? Right now, I think the coupon clearing house was taking 5 or 10 or 20 cents a coupon that you submitted. Is there a cost that gets pulled out of the settlement?

Colin Dornish:

There’s a table. It’s probably going to be similar to paper coupons. Right now NACS is still working through what that fee structure is. I would say it’s not going to be more than that. So, if there’s a handling fee of 8 cents or so, there’s probably going to be a similar handling or redemption type cost. There are still infrastructure costs. NACS is making an investment in the system. The majority of the costs would be covered by the CPG company, but there’s still operating costs that would need to be covered. So, I would say the handling fee would be similar, around the same cost of what a paper coupon would be.

Raymond Huff:

Okay, I got it. Just one more: If I walk into ABC Convenience, [does the app] know by location what’s available for that particular store, or is it just showing you all kinds of coupons?

Colin Dornish:

Coupon24 is going to have all the offers from all the CPG companies that are out there. And so the consumer would see all the offers and then at the bottom they would see the participating locations. There’s currently an active roadmap for future integration, as Gray alluded to, with investment and loyalty. That could potentially have some kind of structure to show a little bit differently, but the thought process is the consumer would be the deal-seeker, that they would be clipping their coupons, and then going up to the register, scanning those. And that would then decrement the sale.

There’s no geofencing or anything that’s going to talk with or guide the system to be retailer-specific to have offers specifically just for that store. Unless you are sponsoring your own store exclusives. That’s what we’re calling those when you create your own coupons, your own gallery, like what Loop did. Then you would have your own coupons that would only show your stuff, but it would not be just your location and only be visible in your location. It would only work in your location, but it’s not only visible in your location. I hope that helps.

Gray Taylor:

We’ve got an active pricebook or product book for the convenience store industry, and there’s 32,000 items in there. So, when you look at a 64-ounce Tide, believe it or not, there are some convenience stores that do sell that. And so all of those items that are on promotion, we can tell them what the account and the amount is. We will be, it’s on the roadmap to start winnowing down some of the more common items for a convenience store, but they would still have access for other items that may not be common, but could be used in a convenience store in the future. And the cool thing is if they’ve clipped it for Kroger and it’s in their wallet and they happen to buy it at one of our stores, then the coupons used at the store doesn’t go to Kroger.

Raymond Huff:

Okay, I get it, because we sell the 64-ounce Tide in our stores in Hawaii.

James Maxey:

Thanks, Ray. Brad, you had your hand up?

Brad Miller:

Yes, thank you. I have two similar, but separate questions of more of a technical nature. If I am offering a mix and match deal, two for $4 on a 20-ounce Pepsi, and Pepsi puts out a manufacturer offer for a dollar off of a 20-ounce Pepsi and I’m set up with PROSPR, will the POS stack that and take $1 off of one of those two that I got a two for $4 deal on? And then the second question, which is somewhat related, is: If I’ve got an offer in my third-party loyalty app that’s being funded by the local trade, we’ll just use Pepsi as an example again, and I’ve got a deal in my Club Co third-party loyalty app for a deal on Pepsi and that same Pepsi, that same SKU, there’s a national deal on and I’m set up with PROSPR, will it stack both of those? And will Pepsi pay me separately from both buckets?

Anil Bhat:

Let me answer the technical question. I obviously don’t know the answer to whether Pepsi will pay you or not. Here’s the thing: Your first question was combining a mix and match local deal with the loyalty offer. Now, there are two different things. The mix and match is what you giving as a retailer? That’s local. And then when you send the basket up to the PROSPR host, they look at it and say, “Hey, here’s a basket, and he’s got a coupon. He’s got the valid item. Here’s the additional $3 off.” So, yes, they will become stackable. So, your second question, you had your Club Co, which is a loyalty program, and then you have PROSPR, right? If the Club Co gives let’s say $1 off, because that’s not based on a coupon or anything like that, it’s just your promotion, and then loyalty always gives $3 off, yes, they both can be stacked too.

Brad Miller:

Okay, thank you.

Raymond Huff:

Sounds like there’s two passes though. One’s up to PROSPR, and one’s to your loyalty, correct?

Anil Bhat:

Yes. As long as the customer has said that he’s also a Club Co member and he presents the coupons, we can go to multiple loyalty hosts at the same time.

Raymond Huff:

But you’d have to in this situation, correct?

Anil Bhat:

Correct. We would.

Raymond Huff:

Yes. You’d actually have to. I think from a technical standpoint, people need to understand you’re doing two calls out to probably two different systems.

Anil Bhat:

And we do that today. We do that today because a retailer has a major loyalty program and their own loyalty program, so that’s pretty natural today.

Gray Taylor:

Raymond, that’s why we’re driving to the aggregator solution because that’ll take it down to one call, but with all the same net effect.

Brad Miller:

Yes, we’re doing that with BP Amoco today. So, if we did PROSPR, we’d be doing three separate calls to three separate IP addresses.

James Maxey:

From my perspective, one of the unique things is this is a single-use coupon coming from PROSPR. So, as a consumer, I may go into Brad’s store and on day one and have a totally different transaction or price than day two just because I’ve already used the coupon that was made available, correct?

Colin Dornish:

Yes. And then, Brad, back to your other question around who’s paying who in terms of the loyalty transaction. If the 8112 coupon gets scanned through a called host, the PROSPR system gets scanned, that will come up on the settlement. Pepsi would fund their promotion through PROSPR. So, you would get paid for that if your loyalty platform would…how you reconcile with them if they hit that deal and you have some arrangement? Most likely you’re probably already getting your Pepsi promotion from marketing off invoice with them as channel dollars, so you probably won’t get any additional money from them. You’re probably just getting it in a case cost adjustment. You probably have already hit that. But realistically, anytime you would scan an 8112, it goes through the PROSPR system; it would go through our settlement process. You would get that back as the coupon processing goes. So, to answer your question, yes, if it’s stacked, you would still get the Pepsi funding settlement process back.

Brad Miller:

The other thing I think is interesting, I don’t know that there’s a lot of in-depth on it today, but just conceptually the idea. If you take that extra step to create and issue your own coupons, that you can make them have a distinctly short shelf life to really drive the customer to take action. I think that’s pretty powerful, too.

James Maxey:

Colin, CVS’s experience appears to be fantastic. One, they’re not printing a ton of mile-long register receipts, and two, they’re seeing very, very high acceptance. Do you think the manufacturers are going to start trying to drive shelf space by saying, “Hey, if you will put this product on your shelf, we will drive coupons,” or do you think that’s a little premature?

Colin Dornish:

I think, yes, if you continue with redemption rates the way they are, I think if they can target market the way that they’re seeing with some of the top tier product and get some of the similar redemption rates, I think all of those options are certainly on the table. I think that if it continues to be successful, you’ll see more and more. I know there was a long listing of certain manufacturers and vendors that CVS was looking to go after. I think with some of these statistics, it’s only a matter of time before they start to get more offerings in the coupon space.

James Maxey:

As the manufacturer, I know I gave single-use coupons, I know it’s been processed, I know that it went to this retailer, but when I build my relationship with PROSPR, am I gaining the right to transaction-level data from the convenience store retailer: store location, timestamps, etc.? Because there’s a lot of value in that data.

Colin Dornish:

Gray, did you want to go through the data?

Gray Taylor:

Yes. Let’s take a look at the customer journey. They’re not getting basket data. If I’m on My Coke Rewards, for example, I can push a coupon to Gray Taylor knowing that coupon, that serialized coupon went to Gray. I then go to CVS, Kroger, a convenience store, and I use that coupon. They now close the loop on the consumer. What gets reported back to them from the Coupon Bureau and from our settlement is this serialized coupon was used on this date, at this merchant location, and it’s now expired. And TCB, the Coupon Bureau, takes that down. There’s no other data that said, “Well, they bought a Coke, and they also bought a Ho Ho with it.” None of that data is transmitted.

And we’ve also preserved that within the loyalty program interface so that the loyalty program is only passing up the data of relevant products that have a promotion outstanding on them. We’re never going to see the basket data. And then in a native prosper situation, we’re actually dropping all of that data once we get the authentication from TCB, which is why we thought it was important that NACS be in the middle. Because we can basically say, “We’re NACS; we’re not stealing your data. We want you to be able to sell it.” To your point, James, it’s super, super valuable stuff.

So, long story short, the issuer of the coupon knows who the customer is, knows when and where they used it, and that it’s expired, and that’s the extent of the knowledge that the manufacturer gets. Or that’s the extent of what the retailer would get, for instance, if they did Stewart’s Soda, which is available at other stores, and they’re issuing a coupon. That’s all that Stewart’s would learn too, so it’s very private.

James Maxey:

Very good. I didn’t think they would get market basket data, but I was concerned that they’d get timestamps on it.

Gray Taylor:

They will get timestamps because one of the things that they want to benchmark is how long did that coupon stay in the consumer’s wallet? That’s part of the efficiency of what they’re doing. Was it a hot enough offer that a customer immediately ran out and did it? If you’re a brand manager within one of these companies and somebody’s coming in and kicking your door saying, “We’re going to be under sales 5% our target for this quarter,” they want to know what price they have to put out there to get some immediate action. So that’s valuable for them. It is a bit more information from us, but we don’t even know if the customer is a cash customer, unless they’re a loyalty customer. So we’re kind of in the dark on that too.

James Maxey:

Okay, thank you. Chris, what have you got?

Chris Bambury:

Thanks, James. We’ve been doing a little bit of research and looking into all of these couponing options. We’ve never typically partaken, but understanding digital coupons a lot more, which Gray should be happy to hear. What we do have, which Gray shouldn’t be surprised to hear, is California working on some mandated print coupon legislation. We’re watching that closely.

But in polling some peers, it’s been interesting to hear some say, “I don’t want a digitally clipped coupon.” And these are not un-tech-savvy people. These are tech-savvy people. But they like being able to pick up that circular near the check-out, near the walk-in, grab stuff off there. That’s where I’m learning more about the 8110 coming into play for those customers, as well as some who want to not have an app but just use the card and phone number like we do in grocery markets.

So, we’ve been understanding a lot more on that side. The question I think for the entire group is, has anybody in the c-store industry done like the grocery clubs and mandated all discounting, all promos go through loyalty, and have any success without pushback?

Gray Taylor:

One of the things that I put up front is: 8112 by nature is acceptable at any retailer. You can use 8112s with a targeted retailer. That’s why we talk about private label. Kroger is not happy about that because Kroger is stuck in the pin-to-card phase. P&G is happy about it because they don’t have to keep kowtowing Kroger. They can issue this out to the consumer. Their mindset is, “I really don’t care where you buy my product. I just really want you to buy my product.” And so 8110 world is perfect for pin-to-card. 8112 is not, unless you put special collars on it by retailer. And that’s up to the CPG to do.

On paper, clipping the circular and so forth, there is nothing that keeps us from doing this. We ran into this problem with Smoker Friendly. I’m using a little bit of humor here, but there are a lot of tobacco smokers who do not want anybody to know who they are. They don’t use a mobile app, and they would prefer that they get paper [coupons] for their Marlboro program or whatever. Those 8112s can be targeted or they could be mass distributed with the single use taken off of that and you can use that coupon as much as you want to.

But usually what they’ll do is they’ll establish a relationship directly with the customer and even mail them those 8110s. Because the other premise of 8112 is, “I can’t do what has happened in our industry with unattended POS where people just come in and they’re scanning Newport $7.50 off coupons and just keep repeat scanning it.” And since we’re not doing velocity checking, they would end up with a balance due them and they would hit the pay it on cash and they’d walk out the door with free cash. So 8112s, the single use element of that, stops that whole thing.

One of the things you described is perfect for 8110s. The other thing we described probably doesn’t fit in the use case for 8112s. Hope that answers a bit of the question.

Chris Bambury:

It does. We’re debating, how do we drive consumers to the loyalty platform? We’re trying to make a decision.

Gray Taylor:

Yes, so let me take you through a use case that we discovered over at Loop Stores. We had a huge clip response on a test run out there. All of the allocated coupons were clipped within 10 days. So when you’re talking about pushing the loyalty program, we’re encouraging retailers to feature a hot item. If you’ve got chicken in your store and your margin is 70%, why don’t you consider giving it away? And here’s the reason why you would: Number one, I can give the customer one coupon that says we can do that. It gets them in the store. And we know a ton of customers, especially our loyalty customers, don’t come in the store. They’re gas-predicated. By giving them something for free, I can get even a loyalty person to come into the store and see what I’ve got in the store. You’re hitting that footfall issue of, how do I get the customer off the fuel island and into the store?

In the case of Coupon 24, we work with them fairly exclusively right now because they’re the guys who have actually made the most traction. Customers will opt in with their telephone number. You’ll then get that number, which is a text number. And now that’s up to you guys to go out and text that customer, just like we were talking to Babir earlier. It’s a great application for you then to text them back and say, “Hey, I noticed you were at my store. I noticed you used a coupon. Here’s another coupon.” Drop it into their coupon wallet. You can start bread-crumbing customers to come back. And we’ve got some oil companies looking at it from the standpoint of, “I could also drop a coupon in there for $1.50 off your next fill up of XYZ brand.” So it gives you that, what I call a loyalty-light relationship with them and it gives you the opportunity to then sell them into your loyalty program because you will now have a contact point, at least for a text.

Chris Bambury:

That’s great. Thanks for that. I will definitely say, this is a very intelligent group and you see the level of complexity we’re trying to walk through to understand this. Then you have to get it to the decision-makers of companies to onboard it and then to the consumer. I think definitely simplifying your presentation is important. I had that conversation about TruAge recently. We sold somebody regionally by really simplifying it down because the initial presentation was overwhelming. It was too much information for them to comprehend, so we simplified it down to some key points. I think the same with digital couponing. You really have to hit those key points for the decision-makers, and then it’s a no-brainer.

James Maxey:

Great questions. Lonnie, any thoughts, comments that you want to share?

Lonnie McQuirter:

Thanks for having me. I’m really excited as we talk about PROSPR. What I don’t think has been stressed enough is being able to take coupons that are advertised and marketed by some of our other retail competitors, and that we can seamlessly accept those from our customers in our store. It’s another way of giving value. So while the big box or some of the deep discounters may be offering these coupons and working really hard to market them online and other platforms, we also benefit from that. This is one of those ways we’re on a rising tide. The more prevalent the 8112 technology is, the better off we benefit, those of us that have that technology available and activated on our point-of-sale systems.

James Maxey:

Very nice. Alan, any thoughts?

Alan Meyer:

Yes, I think this is definitely the future of discounting. This has been tried in our industry off and on. KickBack was trying to do this for a while. And we’ve had a couple of others that we’ve attempted to try to get this to work, nothing’s really broken through to the customer yet that I’ve seen. So I don’t know if it’s early or obviously it needs to lend itself to scale. I can tell you we will probably be an active retailer on the program and see how this goes. I think eventually this is going to be the way of it.

Somebody mentioned earlier about loyalty. Does anybody do their discounts and promotions through loyalty? We do all of our promotions through it. You have to have our loyalty card to get a promotion, to get something off standard retail price. So this [couponing] is obviously different than that, but I think these targeted discounting programs are where you really can maximize margin while grabbing the elastic customer, the price-conscious shopper. I’m a big proponent of the concept and hope that this is the answer in our industry.

James Maxey:

Yes, my personal thought just listening to the conversation, as different people have success, more and more people are going to want to jump on and drive that business for themselves. Don Rhoads, any thoughts or comments?

Don Rhoads:

Sure, thanks James. I’m going to put my NACS hat on here for my comments. I want to thank Gray, Linda, Conexxus for all their hard work. This is an important initiation for NACS. We have committed stakeholders in both the supplier and retail community. Also what’s important is it aligns with much of our industry wanting to compete with other channels, and this is a big deal when it comes to grocery and big box and being in that space. It’s a huge opportunity for us and our CPG partners. Colin, great work, and I’m really excited to see where this goes.

James Maxey:

Definitely exciting times. And, Rob?

Rob Razowsky:

Thanks, James. I appreciated the discussion today. My thoughts are as a small retailer without an IT department and limited resources, this stuff is all very scalable and seems like it’s easy. It should be something that we can implement and utilize. That keeps us going and keeps us growing in the business and allows us to compete. It’s been a great conversation today, and I thank you guys for all the efforts and NACS for getting involved, and certainly Gray and James. This is good stuff. Thank you.

James Maxey:

That’s what I love about this group is, you look at someone like Rob, I think you have 13 stores, am I remembering that correctly, in the Chicago area?

Rob Razowsky:

We have 12.

James Maxey:

Twelve stores in the Chicago area. Just to be able to do some POS configuration and let this start for yourself is just amazing for me. After all the rollouts I’ve had to do, it’s become, “Oh, we’ll just go do some quick configuration and we’re good to go.” Also, it gives you a halo effect for your consumer. It’s like, “Hey, these guys are tech-savvy.” And I think there’s some positive benefit to that now that’s coming from a techie dude. I think there’s some positive benefit to that. Troy, any thoughts, comments?

Troy Calhoun:

Sure. It adds a layer beyond the scope of loyalty and loyalty programs, especially to those consumers who don’t want to participate in loyalty because they don’t like it. They have a perception about data being captured and so forth and so on. Where this offers them an opportunity to shop, get discounts at our stores, and feel as though they still have anonymity to some degree. Until of course we capture their information that way and then send them a text message.

I see this for us as another layer to the customer journey in our stores. And I really like it for the grocery application because in our portfolio of c-stores, we also have five grocery stores. I can see us being really able to leverage that in those grocery stores. I like what I hear, and I think that there is a place for us to play in here for sure.

James Maxey:

Outstanding. And last but not least, Gary?

Gary Wren:

You said the coupon can sit in their wallet for a bit of time before they can use it, but how long does it stay active after it’s scanned? Here’s what we’ve seen with some programs: Say a customer walks in, gets to the counter, and they scan the coupon. Then they remember, “Oh, I need a toothbrush,” so they void it. They go back, grab a toothbrush, wait for three or four more people in line and then scan the coupon a second time. Is it still going to work for them or is it gone?

Gray Taylor:

No. As part of the authentication process, it’s immediately taken out of the Coupon Bureau’s eligibility list, so they could come back 30 seconds later, three days later, 30 days later. That coupon has expired, and it actually disappears from the wallet.

Anil Bhat:

Let me clarify that. I think the way Gary mentioned was that they void the ticket, so it may not have gone to the host yet. If that’s the case, then it’s still valid, but if it has gone to the host and you’ve completed the transaction, then it’s gone.

Gary Wren:

So if they void the transaction, it’ll get sent a notification that this coupon wasn’t used; will it still be available?

Anil Bhat:

Correct. As long as it hasn’t gone to the host and you have completed the transaction. The host hasn’t gotten the notification that it’s been used.

Gray Taylor:

Yes, the presumption is when you subtotal and cash out, it’s done.

Gary Wren:

That’s when it sends it? Gotcha.

Anil Bhat:

That’s correct.

Gary Wren:

Because that’s going to happen occasionally, obviously. Something’s going to happen, they’ll need to recheck out or whatever the case is.

Gray Taylor:

Yes, if they void it without tendering out, it’s left alive, which is a good feature.

Gary Wren:

And then as soon as it’s scanned and that transfers, it can’t be reused.

Raymond Huff:

So the system will wait till the cashier hits the total button?

Anil Bhat:

You would want to do that because you want to make sure the entire basket is there, right? He may have more items that may still qualify for additional coupons. So ideally you would want to send it at the end, yes.

Raymond Huff:

Okay.

Gary Wren:

Makes sense. Thank you.

James Maxey:

Paul, we’ve heard from Anil for the Verifone side, but what about your perspective on this opportunity?

Paul Robertson:

One thing I’m wondering as I sit here thinking is, if I’m a retailer, how do I go about availing myself of this solution? Is this something that’s being marketed? Is there a way that I go sign up to get the details necessary to set up my POS to start taking these? And then secondary to that, how does the consumer learn about these coupons? Are they enrolled in an application? Or is it coming in through maybe an email facility? I’m not sure I understood any of that through the course of this conversation.

Gray Taylor:

That’s a great question. The way we’ve been activating them in the test is you scan a QR code with your phone. So you have a shelf edge or it’s on a dispenser, and it says, “Here’s a hot product. Scan this with your phone.” You’re immediately taken up to the Coupon24 site. You put in your telephone number, and that coupon’s now sitting there and you can use it immediately. That is one way to do it. We are finding it works out pretty well. CVS is driving this now. They’re up to 400,000 people that have acquired that capability through that method of just scanning on the shelf-edge label.

Eventually as we get this thing going, and we’re doing some consumer studies right now, but we’ll probably have some store POP that’s going to be going in as well. And that POP will have a QR code on there that will allow them to just go up and register for that. That’s really been the customer acquisition. The cool thing is that CVS has already gotten 400,000 customers for you because everyone they got is eligible at our locations as well. So that’s the basic program going right now. We’ve got it live up at Oasis, Stop and Go. And we’re going to be going live at Loop pretty quickly.

Paul Robertson:

Very cool. And then the retailer, would they go through a similar process of enrolling themselves to get that merchant ID that goes into the PCATS configuration space?

Gray Taylor:

Yes, that’s going to come through the PROSPR group. Colin’s doing the retail outreach, and we’ve got an infrastructure in place that will on-board you, issue you with that number, and then we do a couple of test transactions to make sure your host resolution is fine at the site. Then we have some ongoing support that’s available to the store if there’s a problem. But since we’re pretty good these days at doing loyalty, as Anil pointed out, as long as we get the right URL in there and we’ve got the right merchant ID, all should be good. The settlement agreement will include your routing transit and account number, so where do we put the money? It’s a fairly simple agreement. We’re never taking money out of the account, we’re just crediting when we get the settlement done. So it’s a fairly easy boarding process for the retailer. It’s a lot easier than we found with TruAge.

Paul Robertson:

I was just going to say to Colin, we should probably talk because we can probably help evangelize this throughout our ecosystem, much like we’re doing with TruAge. We can talk about it and help get those numbers up when the time is right for retailers to enroll.

Gray Taylor:

Yes, we don’t need the state of California to move along quickly for us to get these accounts. It’s a nice cooperative of retailers. Each retailer is boarding people, but they’re boarding people for the entire ecosystem, not just for themselves. And CVS, by the way, has no plans at this point to integrate it to the CVS loyalty program, which is what really drove us to say, “Well, if we could do that, then that would make it a lot simpler.”

The one problem I have with CVS is you have to go in and then keep issuing the other coupons, and then they ask, “Do you have any non-CVS coupons?” And so it’s a little bit laborious at their self-checkouts. We really want to keep all of this functionality, including TruAge, by the way, as we migrate through the digital wallet work we’re doing at Conexxus. We want to do a single tap, get your age verified, all the promotions that you have in your loyalty or within your C24 or get Cwallet or any of the wallets that are out there. We want to do it in less than 20-second transaction times and then that makes us a hell of a lot more convenient than our channel competition.

Paul Robertson:

Very cool. Thank you.

James Maxey:

Thank you so much. Roy, as we wrap up for today, do you have any general comments or closing comments?

Roy Strasburger:

Well, this was a fascinating conversation, and I’m learning some new stuff. I had some questions, but I wasn’t sure how far out I was getting on the thin ice of knowledge. Thank you so much, Anil and Colin, for the presentations. I think that this type of innovation can do nothing but strengthen the convenience sector and help that customer experience. It’s been a great sharing of information today, and I really appreciate it. And James, great job of moderating the session today. Thank you.

James Maxey:

Perfect. Thank you.

Gray Taylor:

I’ve got one final comment. I’d like to call out Verifone because Verifone’s the first POS to support TruAge, and they’re the first POS to thoroughly support 8012s. You can’t get a better partner for the industry than what Verifone’s been doing. When we talk to James Hervey and say, “Here’s the next nutty idea we’re coming out with,” he’s already got his team working on it. Anil, your team does a great job in supporting us. We really appreciate it.

James Maxey:

Yes, I 100% agree.

Myra Kressner:

Thank you for that, Gray, and certainly at Vision Group Network, we agree with you completely. James and Verifone and Paul have been wonderful Ally Supporters, and we will do everything that we can to support them. And thank you, Anil and Colin and James. I’m going to borrow Paul’s phrase that he used, we need to help “evangelize” what PROSPR is doing. And certainly, I think this Vision Report and various ways that we can help get the message out. It’s something that, Gray, you can rest assured that we’re going to be in touch with you to see what we can do. With all of the terrific content and questions and answers that have been on this Conexxus Vision Group meeting, let’s talk about how we can really help you and Colin get these answers out to the industry. We’re going to be doing that as much as we can.

James Maxey:

Perfect. For our next meeting, save the date, Sept. 25. I believe it’s at the same time, 3 Eastern Time, 2 Central. Please make sure your calendars are marked for that one. I know Ray has already teed up an idea for us for the beginning of the conversation.

At the beginning of today’s meeting, I said my expectation was that the conversation’s going to be fantastic. And as always, this group has exceeded my expectations. Again, thank you so much to Anil and Colin for your presentations, your great answers, and taking the time out of your day to educate us. It is much appreciated both from this group and as an industry. So, applause for you.

I look forward to talking to you guys the next time.