Customerland

If AI agents run retail, who keeps thinking?

• mike giambattista • Season 3 • Episode 41

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If “modernizing” sounds like a buzzword, this conversation turns it into a blueprint. We sit with retail veteran Art Sebastian to trace how a beloved convenience chain moved from hometown habits to a unified, omni-channel engine - without breaking trust or losing its core. The journey starts with customer truth and a clear-eyed data audit, then builds toward a single customer view that powers relevance across email, SMS, push, and in-app experiences. The result isn’t just more messages; it’s fewer blind spots, cleaner consent, and faster baskets.

We go inside the organics of change: how a brand creates a Digital Experience team from scratch, scales talent with a two-in-the-box model, and ultimately merges digital, media, PR, and e-commerce into one omni-channel group. Art shares why a customer data platform (CDP) is the spine of modern retail - making identity resolution, privacy compliance, segmentation, and retail media networks both possible and profitable. We also dig into Gen Z’s sharp expectations: personalization over platitudes, time saved over slogans, and social content that feels native rather than promotional.

Then we fast-forward into the AI era - predictive, generative, and agentic. You’ll hear practical wins retailers are already capturing (recommendations, send-time optimization, labor scheduling) and a candid look at what’s next as AI agents start coordinating across systems. The takeaway is both empowering and cautionary: IT skills will shift from vendor management to integration mastery, and leaders must defend critical thinking even as automation scales. If you’re steering a grocery, c-store, or retail brand through transformation, this is a roadmap you can actually use.

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SPEAKER_00:

I think most of the retailers that I spend time with are still understanding the space. It's got a lot of hype, and they're still trying to figure out what it is. And so they are relying on the vendors that help them to bring AI capabilities. So again, the majority of retailers are saying, hey, my loyalty vendor, my e-comm vendor, bring me the AI so that we can operate more efficiently. There are not as many leaning into their own development of AI capability, mostly because it's still new and it requires investment and resources.

SPEAKER_01:

Today on Customer Land. I'm with Art Sebastian. This is frankly after several tries of failed attempts at connecting. But um this is this should be a good conversation. Art and I have had a couple of partials leading up to this that never quite got off the ground. But before we get into all that, which really doesn't matter, thanks for joining me. Really appreciate this.

SPEAKER_00:

Yeah, thanks, Mike. I'm excited to get into the conversation this morning.

SPEAKER_01:

Finally, yeah. So Art and I met at NRF uh earlier this year, which now seems like multiple years ago, and had a really great, robust but short conversation and agreed at that point that there was so much more to talk about. So we've been we've been kind of dancing around schedules ever since. But um Art has a deep background in retail, rather retail grocery, uh, and convenience, um, advising companies along the way, uh, such as Treasure Data, um, a five-year stint, as I understand it, leading Casey's digital transformation. So a man with a deep background in this space, and um, and that's only the tip of the iceberg. So, Art, rather than listen to me rattle on, um, which nobody wants to do or deserve to sit through, why don't you just tell us a little bit about your work at Casey's treasure data, what you're doing now, and then we can kind of just jump into where this is going.

SPEAKER_00:

Sure, sure, Mike. And um, just a step uh a tiny step back, I started my career in the retail industry when I was 15 years old, and I've been in it ever since. So I've worked in stores, I've worked in store operations, merchandising, marketing, and all of that culminated in a in a big role at Casey's leading the digital transformation. And uh when you think about Casey's, when I arrived in 2018, it was probably one of the bigger companies that people never heard of, unless you lived in the Midwest or drove through the Midwest and you'd see one of the signs or awnings off the highway. Uh so Casey's is the third largest convenience store chain in the US. Um, at the time I was there, we had about 2,400 stores. Today they have 2,900 stores, publicly traded company. Um, but you know, really spent the first 50 years operating like a like a local hometown convenience store. And they were very successful at that at that for many years. Um, but over time, as as you know and we all know, lots have changed. Uh the consumer dynamics have changed, the competitive market has changed, QSRs, uh convenience store changed, grocers, and of course, all of the new digital experiences all created complexities. And it was in 2018 uh when I arrived at Casey's that we took a look at ourselves in the mirror and decided that it was time to make some changes. And the simple statement, Mike, is we needed to become a much more contemporary version of ourselves. So no need to deviate off the brand identity and the relationships we had with customers. We just had to evolve it. And so digital transformation, in short, meant having a customer data strategy, building a loyalty program, creating an e-commerce and improving the creativity and branding in all of our marketing. So, anyway, I had a great five-year run there. I'm sure we'll talk more about some of that. Um, and about 18 months ago, Mike, I stepped out on my own and I founded Next Chapter. Next chapter is a boutique consulting firm uh that is focused on retail. We spent the first 12 months working with convenience store chains. And I'd say the last six months, in addition to convenience, we've started working with grocery chains. Amongst all of that, what's been consistent is uh we work with tech companies that operate in retail. So we get to see the business from multiple angles, which is, I gotta tell you, just a just a blast to be able to touch the business in that way.

SPEAKER_01:

Completely, completely agree with that. You know, it's it's seeing the, it seems stale to say, but a 360-degree view of how these businesses operate and um and innovate is really just fascinating stuff. I'd love to talk a little bit about the early stages of the Casey's transformation. Because, you know, any company that, as you put it, and I love the way you said this, like chooses to look itself in the mirror and decide that it needs to make some changes. Um, first of all, it's that's a really big deal for leadership to want to do that. And then to get rank and file to kind of go along with it when you've got, I don't know, did you say 50 years worth of worth of history, um, which means 50 years worth of culture, which means 50 years worth of silos and you know of you know purpose-driven KPIs and uh an entire series of business models that lean one way, and you're gonna try and get it to go kind of you know directionally different. So talk to me a little bit about what that was like in the early days with um your interactions there.

SPEAKER_00:

Yeah, you know, it was um it's interesting. I had just uh finished up three years with Meyer, which is a super regional grocer in the Midwest, where I had the opportunity to lead the digital transformation there. So I had a pretty good playbook that I brought to Casey's. Uh, but to your point, um I had to be, you know, smart about how to how to introduce change in a company that had been successful for the last 50 years. So while I had the playbook, I had to think about the best ways to bring the organization on that journey. You know, so a couple couple areas that we started in. Uh first and foremost, we talked to our customers. You know, it seems like a no-brainer, but um, we stepped out and had real conversations with our customers to get uh a better insight into how they view us and what they need from us moving forward. So that was the first starting point, literally in my first couple weeks on the job. Uh the second thing that uh we did was we we audited all of our technology, starting with customer data, uh, to better understand where it sat and what it was and who used it. And the answers to that are are pretty pretty interesting and simple. Like um, we had a lot of data that no one used. And uh uncommon, by the way. Right, right. The data was fragmented in multiple systems, um, we didn't have a common view of our customer, and um, it was just really hard to extract any insight. And so you end up collecting data, uh, you've got duplicates, you've got old data, et cetera, and no one's using it. So uh step number one was to consolidate that data into one system, deduplicate it, essentially cleanse it so that we can be smarter about our customers. Um I think I shared this stat at NRF earlier this year, which you know always gets people really intrigued. Uh, when I got to Casey's in 2018, we were sending one email out a month to 300,000 customers. So that's the extent of which our digital marketing was was happening. Just in that lane, when I left five years later, we were sending 200 million messages out a month uh to just over 7.5 million subscribers. And so you see the growth from 300,000 to 7.5 million, but the staggering growth is 300,000 emails to 200 million messages, and messages are a combination of emails, SMS text messages, and app push notifications.

SPEAKER_01:

What was the um it would be really interesting if you can recall what the org structure was like back at the beginning of that, because you know, along with any kind of radical digital transformation like what you're talking about here, um, there have to be accompanying shifts in structure. And you know, if you're saying that uh marketing only sent out this minimal series of messages, but then over the course of five years that was transformed, it it kind of just points to a couple of questions. What was the marketing where did marketing sit at the beginning in terms of of kind of um wherever it sat on the org the org chart? But then towards the end, who was or who may still be kind of overseeing and leading what I would just call the customer efforts? Because oftentimes that doesn't that doesn't sit within marketing. Sometimes it does. But how did that change and where did it end up?

SPEAKER_00:

Yeah, you know, um, like I said, uh Casey's at the time was very successful, uh, but there was no real marketing team. There were some folks that did elements of advertising and media that sat within the broader merchandising organization, and that was effectively it. So they were buying some paid media, they were sending the 300,000 emails out, and they were doing some local marketing uh across our markets in our footprint. Uh, when I joined, we created a new organization that we called the digital experience group. And so it was effectively a completely new org chart with new roles. And um when we started and we knew we needed to move fast, I took a short-term approach of staffing those roles with an outside consulting firm while I recruited the roles. And as soon as we acquired the talent and onboarded them, they took the seat and the consultant stepped away. And so we did that over a period of really about two years. Um, and the benefit of having the external help was we could start faster, and those folks were talented based on their experience they had. And as I onboarded my roles, there was a handoff, or I used to call it a two-in-the-box period, where they worked together until my internal person was up to speed and then they slid off. I and I just say one more thing, uh, Mike. So we went from no team to this uh digital experience team that grew over two or three years. And then in my last two years, I I went from leading the digital transformation to leading all of the marketing organization. And so we we expanded this digital experience team and called it omni-channel marketing. So that included digital experience along with advertising and media, um, communications and PR, you know, e-commerce and everything that touched the customers.

SPEAKER_01:

That's that's a that's a giant transformation. I can imagine culturally too, there had to be some uh some kind of just taking a deep breath and like, here we go. You know, there's no stopping this thing once you've opened those, once you've opened Pandora's box, so to speak. Right. Right. Yeah. So I'd love to talk a little bit about your work with Treasure Data. I know that you have been an executive advisor to that group. It's a it's a company I've been following for probably about five, almost six years now, um, watching how they have evolved from an early leader in their space to you know somebody who's really carving out, I would just say, new niches and capabilities the whole time. But um, you have a different, you know, you have a seat at the table, so to speak. So I'd love to hear, you know, um your role there, how you've seen them grow and change and morph, and where you think they might be going in the near term.

SPEAKER_00:

Yeah. No, that's great. Um, I really enjoy working with the treasure data team. So as an executive advisor, I am retained to support the organization. I spent a lot of time with the C-suite leaders on things like go-to-market strategy and positioning, and then have spent quite a bit of time with the marketing team and the product team on real use cases within the retail space. So that's kind of how I spend my time with uh with treasure data. Um, you know, as you said, they have you know been recognized as a leader in the CDP space, the customer data platform space, which has got a lot of attention in the last, I call it five years or so. Um, and I am a huge fan of customer data platforms for a variety of reasons. I'll just tell you a couple. One is um, you know, I'm a big believer in unifying your customer data and knowing everything about a customer in one system. So how they interact via the loyalty program, how they shop and store, uh, how they interact on the website, their response to email, um, you know, what they say on social, etc. So having this single view of your customer in one system. And when you do that, you have the ability to do lots of things. You can uh be compliant with privacy regulation. You can um, you know, identify um customers you don't know and resolve those identities. Um, so those are the types of things you can do. Some of the outcomes, you know, you can certainly shift more towards personalized or segment marketing. Um, you know, that brings efficiencies and and more return. And then the the last thing that I think um a CDP does, especially if you work in the retail space, is it sets the solid foundation for a retailer to build out the retail media network. And as you know, RMN has been one of the biggest kind of trends and and uh focus areas, I guess, in the last two to three years.

SPEAKER_01:

Giant budget shifts there. That's that's interesting. Just for the first time in the whole evolution of RMN's, I think it was just this last week, I saw the first Doomsayers show up. Which is um which only means you're still in growth mode. Um but uh giant budget shifts still, huge technological advances. Um as far as I can tell, yes, there are lots of growing pains, but those are not that is anything but uh uh indicating a down cycle in this in that space. I see it only growing. And and that's you know, that's an unqualified opinion, first of all, but um it's you know supported by a lot of smarter people.

SPEAKER_00:

So yeah, yeah, great.

SPEAKER_01:

So one of the things that I think intrigued me first about our conversation was that you you have a focus on unifying your data. That's been part of your kind of themes with treasure data and with Casey's and other folks that you've you've you've advised. Um, and I couldn't agree with you more. And I think that's a that I don't know who would disagree with that, frankly. You know, yes, we want fragmented data, we only like our data fragmented, so we can't see anything. Um, said nobody ever. But considering Gen Z and the expectations they have for personalized personalized, bespoke, customized interactions. To me, if you are any, if you're a brand or a retailer in any sector that has Gen Z as a customer cohort, that unified data probably became, you know, multiple times more critical trying to address that group than others. And I'd love to hear what you have to say about that.

SPEAKER_00:

Yeah, I mean, uh this is a real challenge for our industries to navigate, is the the growing number of Gen Z shoppers, right? I mean, in in general, Mike, the younger population is beginning to take control of the spending power, at least here in the US. And so that's something to navigate because the younger population has, you know, quite a bit of differences versus the older population, right? They're more digital native, they're used to shopping on apps, um, they put value into different areas of their lives than maybe you know we might. Um, and their loyalty is harder to earn. Um, the younger population is loyal, they're loyal to themselves, and they put value on time and ease. And so if a if a retailer is trying to build a relationship with uh the Gen Z population and they're not making things easy and they're not personalizing the experience, the Gen Z will see that and you know go elsewhere. So I think um, you know, if you back into that, first I think a retailer needs to understand that cohort. Uh, so that requires research, that requires connecting directly with them. And then you need to take that insight you derive and match it up with your brand and say, okay, is there a fit here? Um, and then you need to match it up against your capabilities and say, okay, well, how do we live up to that promise? Um, so what I have seen from the Gen Z community as it relates to data is they were first a little skeptical around all of the data being collected. And that's that's known in a lot of research that's publicly available. However, in some of the more recent research, uh, the Gen Z population has said, we're okay with you collecting data as long as you put it back to me in an improved experience, meaning don't show me stuff I don't buy, don't show me brands that I've never purchased. Don't try to cross-sell me because now you're misusing my data. But if you show me things that you know I buy in a regular frequency, you show me things that make sense based on my current behavior, you're making my life easier. You're making it faster for me to shop. Um, you know, here's some simple things, Mike. Like, you know, call your Jay-Z, uh Gen Z customers by name. Uh, pre-populate the app with uh the stores they shop most frequently. You know, if you know they uh buy a certain set of items every week, especially in the grocery space, put them in the basket. These types of things make a ton of difference. Um, and finally, and uh the last place I just touch on, Mike, and sorry, we can talk about this particular topic forever is okay. The idea of um transparency and consent management is big, right? So the Gen Z population wants to be able to say, yes, send me an email or say no, take me off. In some cases, they want to select the frequency at which they receive the email, you know, two times a week or four times a week. And so the more we understand that and and build that relationship with them, the better we'll see a response that's positive.

SPEAKER_01:

You know, I've had a lot of conversations with brands and retailers who are targeting Gen Z. And uh a couple things have come out of those conversations. One was that early early on, Gen Z behavior just confounded the brands. Even the research companies that tracked generations, you know, saw um huge demands from brands on the brands to adhere to their values, uh to be authentic and transparent. Um but what they found as well was even when they were able to meet those demands from Gen Z, Gen Z's loyalty, if it ever really was loyalty, was extremely fickle. Yeah, thank you for meeting all my criteria, but there's a better deal over here I'm out. Happened a lot. Happened a lot. So um we've had I've seen uh some pretty intriguing kind of loyalty schemes geared toward a deeper understanding of Gen Z as a cohort and as as individuals and baking in um algorithmic sensitivities to who they are. Um so this isn't just you know offer mechanisms, this is language and sentiment, this is you know looking for any cues that might indicate uh propensity, um feeling one way or the other, and these brands are looking for, you know, give me something because these are hard folks to pin down. On top of that, uh one of the other really fascinating aspects that uh this is this is actually a research firm uh told me about was that um Gen Z looks at uh purchase transactions as purchase transactions. In other words, um, prior generations, um, the brand or the retailer was uh could be perceived as your friend. I'm your friend the grocer, I'm your friend the brand. And Gen Z is kind of like, no, you're really not. You're just trying to sell me a pair of shoes. So as long as we can get past that and you're selling me a nice pair of shoes, then great, we can we can keep talking, but don't try and tell me you're my friend. Which which ruined decades worth of brand work for a lot of people, just to shot it. So it'll be interesting to see how how modern brands who are many of whom are still going through these digital transformations that you're working on, yeah, choose to deploy that and try and understand the sensitivities that that group um has and what they're demanding. Because it it is not like any other cohort before before them.

SPEAKER_00:

Yeah, I mean, I just to touch on a couple of real quick things here, Mike. Um, as brands and retailers navigate the Gen Z, one, we've talked a little bit about there's an enormous amount of data that needs to be analyzed in order to personalize experiences, right? That's a topic in itself. Two is I think for the brands and retailers, ensuring that your creative, your copy, how the brand shows up in the world is aligned with the cohort they're targeting. And so if you're targeting the Gen Z, you might want to think about more modern visuals and more modern language, even that will resonate. And so there's that's another whole topic. And then the other one that I'll just put out there is you also want the brand or the retailer to be wherever that cohort is. And the place that we know positively that cohort is is in social media, and so you need to be in these uh these apps and platforms like Meta, Facebook and Instagram and Snap and TikTok, but you can't show up as a promotion or an advertiser. You need to be organically embedded with the content. And so data, creativity, and then a really compelling social media play would be three areas I'd I'd challenge brands and retailers to think about.

SPEAKER_01:

We're gonna we're gonna put check boxes by each one of those items in the in the blog that follows this this podcast. You know, and in the remaining time we have, which is not nearly enough to go through this topic here, um, but I'd be really remiss if we didn't just open up the topic of AI, especially since you're leading digital transformation conversations. It is an overused phrase to say that we are at an inflection point. Um, I think this is one long protracted inflection point that we're gonna just see continual transformation. But, you know, that's my perspective from the sidelines. You're deep in it. So, in the realms of grocery convenience, and retail, how do you see AI being deployed well? And I would love to hear your thoughts on how you see AI being deployed, say, in the near term.

SPEAKER_00:

Yeah. Yeah, look, I I think um we are in the AI era. So it's not just a one-time transformation for each retailer or brand. It's it's a complete era that will span multiple years, and we'll see a lot of evolution inside of those years. Um, I would say AI has been around for quite a while, right? And and I I see three phases of AI. I I call them the predictive phase, which has been around for quite a while, where you're taking data looking backwards to predict forward. Um, obviously the generative AI has been uh the hot space the last couple of years. How do we um generate new things? Um, and then agentic AI, where agents are operating the AI. And so um that's sort of the range of AI we're in across this AI era. I think most of the retailers that I spend time with are still understanding the space. It's it's got a lot of hype, and they're still trying to figure out what it is, and so they are relying on um the vendors that help them to bring AI capabilities. So again, the majority of retailers are saying, hey, my loyalty vendor, my e-comm vendor, bring me the AI so that we can operate more efficiently. There are not as many, but certainly the large scaled ones, uh not as many leaning into their own development of AI capability, mostly because it's still new and it requires investment and resources. So some of the early use cases uh uh that I've seen, Mike, there's certainly AI. Supporting marketing and messaging. There's AI supporting some very simple use cases like cross-sell and upsell in an e-commerce experience. There is AI supporting labor hour management and optimizing that very expensive OpEx item we call our labor workforce in the stores. And so those are some of the early use cases, even in the supply chain side and logistics. But anyway, I'll pause there. But this is this is obviously uh an enormous topic.

SPEAKER_01:

It is. And I I didn't uh I didn't do us right here by tacking this on to the end of a conversation. I I honestly think that the best thing we can do is to um agree that we'll reconvene and talk about this no matter how long it takes to get through our ridiculous schedules. But um I think that because you're leading digital transformation conversations and AI is is a part of so much of that that it'd be a great it'd be a great one to have. So well, let me let me just leave it with this one. Um look two years out into the future. We're just entering the age of agentic AI where AI agents are interacting with other AI agents. What do you think that looks like, say, in the convenience space?

SPEAKER_00:

Yeah. Um, okay. There's I want to give you a couple things to just touch on here, right? Um, number one, if you go two years out, I think the most progressive convenience retailers will have a technology ecosystem of AI agents talking to other AI agents to simplify the experience. So there'll be more experience and more capability unlocked for customers with less people behind the scenes operating them. So that that's good for business. Um as long as uh the businesses can communicate to customers what all this is and it can be seamless. So I think more experiences, less staffing is one. Um, the second thing is I think IT organizations will have to evolve. Um, they'll have to evolve with different sets of skills that manage um agent-to-agent integrations, uh, and especially as you uh synchronize multiple vendors and all the various agents that are brought to the party. So it's gonna require some different skills within IT, um, that is less about vendor management and more about integration management and making sure that things are decoupled and all this type of stuff. So it'll we'll see some new skills emerging. And then the last thing is more of a a little bit of a fear of mine or an early call out is as we move forward in the AI era, and in particular the AI agent space, is I have a fear that we will see a deprecation in critical thinking skills amongst uh the working staff, that we over-rely on AI to do the job, and we begin to lose skill. And so this is my effectively my call out that we must remain strong in terms of critical thinking and and not surrender all of it to technology.

SPEAKER_01:

Uh you heard it here. I'm in complete agreement. And there's there's early evidence to show that that's already that's already happening in so many in so many cases. I mean, we're not even really talking about agentic AI at this point, just you know, digitally and early, early AI. Um well, Art, I can't thank you enough for this. Um I'm I'm gonna bother your people until we can get another one of these going, which we'll dedicate, I would love to just dedicate the whole conversation to um how AI is uh being deployed and thought about within your space, because I think that could be really informative and and help a lot of people who are who are trying to figure the same things out. But for now, thank you. I really appreciate it.

SPEAKER_00:

Yeah, absolutely. Thanks, Mike.

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