How AI and Automation Are Transforming Tobacco Sales and Loyalty in Convenience Stores

C-store Tobacco Sales Get an Infusion of Technology

Selling tobacco and nicotine products at convenience stores is far from straightforward. Pricing isn't just about slapping a tag on a pack, and advertising faces tight restrictions. Store operators must juggle manufacturer pricing rules, regulatory requirements, state and local minimums, shifting consumer habits, and the constant need to stay profitable.

"It's a balancing act and doing it manually can feel like trying to navigate a maze blindfolded," said Caitlin Orosz, senior director of marketing at ClearDemand, a company offering AI-driven price optimization and competitive intelligence solutions. Tobacco category managers handle complex tasks while facing risks like fines and missed manufacturer buydowns. This is where technology steps in.

How Technology Improves Tobacco Sales

• Sales Optimization: AI reveals customer buying patterns to help retailers optimize pricing and promotions, including cross-promoting complementary items.
• Pricing: Automation ensures prices meet demand, regulations, and manufacturer buydowns, so retailers don’t leave money behind. It removes the scramble of manual price adjustments.
• Marketing & Personalization: Data-driven promotions and personalized loyalty programs improve brand perception and encourage repeat visits.
• Regulatory Compliance: Automated tracking helps retailers stay ahead of evolving regulations, avoiding fines and meeting all local requirements.
• Buydown Management: Technology ensures retailers meet manufacturer pricing terms, maximize funding, and stay compliant without extra effort.
• Automation & Efficiency: Advanced pricing tools streamline processes from pricing to execution at the store point-of-sale, sometimes even updating digital price tags.

Tracking the Consumer Transformation

Adult tobacco consumers are shifting from traditional cigarettes to other nicotine products. This change can make it seem like retailers are losing customers, but technology like loyalty programs paints a clearer picture.

Margaret Ogren, senior business director at Patron Points, explains that loyalty programs help identify whether a consumer has quit or switched products. This insight lets retailers send targeted deals to keep customers coming back.

Personalized promotions strengthen relationships and reduce the risk of losing customers to competitors offering better prices on new products. For example, Patron Points recently partnered with Alimentation Couche-Tard Inc. to provide loyalty and scan data services to Circle K and Kangaroo Express franchisees. This partnership enables retailers to send personalized coupons and discounts directly via email and mobile app notifications.

Consumer habits are also shifting. Rather than buying cartons, many now purchase smaller quantities more frequently, increasing store visits. This behavior offers both risk and opportunity. Personalized offers encourage consumers to buy more items per visit, boosting profits.

The Near-Future Picture

Engaging customers isn't limited to the moment they’re in the store. Retailers can connect with consumers through mobile apps with timely notifications, personalized promotions, and rewards at moments when they’re thinking about meals or a quick pick-me-up.

Integrating mobile apps into loyalty programs significantly increases participation—by as much as 82%. This boost happens because consumers become more aware of available value and seek out retailers who deliver it.

ClearDemand’s Orosz points out that manufacturers are already using scan data to create localized pricing and incentives, expecting c-store retailers to do the same. AI and automation help category managers by:

• Predicting sales trends without manual data crunching, identifying optimal prices, best-selling SKUs, and emerging product trends.
• Optimizing promotions to drive repeat purchases and expand baskets.
• Automatically adjusting prices in response to competitor moves, demand shifts, and compliance needs.
• Customizing pricing by region, competition, and consumer preferences down to individual stores.
• Refining loyalty programs with AI to deliver relevant offers, boosting customer loyalty and sales.
• Ensuring automated compliance to keep pricing and promotions within regulations and prevent fines or lost rebates.

"Retailers who embrace technology aren't just keeping up, they're getting ahead," Orosz said. "They make smarter pricing decisions, build customer loyalty, and ensure compliance without daily stress."

For sales professionals in convenience retail, adopting AI-driven tools and loyalty programs is no longer optional. Leveraging these technologies means smarter pricing, better customer engagement, and a healthier bottom line.

To explore AI tools and courses that can help optimize sales strategies, visit Complete AI Training’s Sales Courses.