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How will AI impact convenience stores?

How will AI impact the convenience industry?

Estimated reading time: 4 minutes

Concerns over AI are spreading from the tech industry to the halls of Congress, where a bipartisan group of senators urged for a $32 billion emergency spending bill to invest in development and risk assessment of AI. The rapid growth and deployment of AI throughout many industries has lots of retailers wondering how AI will impact the convenience industry and how it can be used in c-stores to help manage data and improve customer experience, increasing the bottom line.

Certain retailers, such as Amazon, have experimented with artificial intelligence in stores, with varying levels of success. In 2018, Amazon introduced Amazon Go, a grocery shopping experience where shoppers could shop, a network of cameras would detect the items they placed in their cart, and automatically charged their Amazon account when they left.

However, in April 2023, Amazon announced that all Amazon Go stores employing this technology – called Just Walk Out – would be closing. Amazon cited the technology “not living up to the promise” of simple and easy checkout experiences. Furthermore, the technology relied heavily on human labor based off-site. While these incidents may lead many to believe that the impacts of artificial intelligence are far off for other retail and convenience retailers, AI in c-stores may be here sooner than we think.

Certain retailers have more successfully employed AI in their stores. For example, Tractor Supply Co. is one company at the forefront of the AI revolution for retail spaces. According to Industry Drive, Tractor Supply Co. has used AI to enrich their in-store customer service, helping to maintain their position as one of the best rated retailers for customer service in their segment. Furthermore, by employing smart cameras in their physical locations, Tractor Supply Co. suggests to employees when a customer may be ready for a consultation or additional expertise, based on their real-time behavior in store.

Convenience retailers can leverage artificial intelligence just like their counterparts in other retail spaces. AI in convenience stores can be used to automate data-heavy processes, like inventory and invoice management, as well as in day-to-day store processes such as security and checkout procedures.

During a panel discussion at the Dover Fueling Solutions Accelerate Ahead conference in March, industry leaders laid out several possibilities for c-stores looking to leverage artificial intelligence. The panel outlined four possible use cases for integrating AI in c-stores: camera monitoring, order ahead suggestions to customers, limiting food waste, and voice alerts to employees.

Inventory management can be one of the most time-consuming processes in the convenience world, as convenience stores have over 500 stock keeping units (SKU) at a minimum, and frequently have more. Back-office software enhanced with artificial intelligence can help retailers manage their inventories. For example, CStoreOffice by Petrosoft can make ordering suggestions based on what products were purchased most by a store’s customers.

CStoreOffice is also able to receive inventory counts performed by store employees or third-party companies and can reconcile count data with sales data. This means the software pulls data from the latest invoices, sales reports, and inventory counts and alerts store owners to discrepancies. These discrepancies can point to instances of theft from customers, employees, or vendors.

Store security and loss prevention technology benefits from the addition of AI as well. For example, Petrosoft’s Loss Prevention Analytics marries real-time transaction data with video footage to immediately flag risky transactions. The software can pinpoint the exact moment of a large return, no-sale, or restricted sale to alert business owners to possible instances of theft or errors. With these features, powered by AI, convenience retailers can easily preserve the bottom line.

While some retailers, like Amazon, have shut down certain AI pilot programs for being inefficient and costly, others, like Tractor Supply Co. are good examples of the positive impacts AI can have on a retail business. According to convenience experts, artificial intelligence-enhanced software can improve data processing and security measures, which can have serious benefits for retailers.

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