Opinion: 4 Ways AI Is Transforming C-Store Operations

PLEASANTON, Calif. — As a concept, artificial intelligence, or AI, has been around since 1957. But you may have thought it was introduced very recently if you’ve seen the constant chatter about it on the news, popular culture or any other media in which AI has suddenly been portrayed as the next big thing.

What’s actually new about AI is that we are finally discovering the killer apps it has, along with its offshoot of machine learning. This spike in practical use cases has been accompanied by a software-first model for businesses, which is driving digital transformation across many industries.

AI refers to a mode of computing in which machines learn from historical data, identify patterns and ultimately make decisions without human interference. The concept is often oversimplified by popular culture, conjuring up an image of a robot with humanlike characteristics. The truth is, AI goes far beyond flashy products such as Amazon Echo or smart car technology: It can be integrated into a store’s ecosystem in seemingly subtle ways, and with measurable results.

Convenience stores in particular face unique challenges such as store and grounds appearance, cleanliness, and speed of service. In a landscape of ever-changing consumer preferences, store owners are advised to stay on top of the latest AI trends to help automate and simplify some of these day-to-day concerns. In fact, the pressure to do so has never been greater. According to market research firm Global Market Insights, investment in AI is predicted to exceed $8 billion by 2024.

Let’s take a look at four ways AI is shaking up the convenience-store industry …

It’s probably no surprise that the “convenience” of a convenience store is cited as one of its top benefits from the shopper perspective—i.e., its speedy service and quick-moving lines. However, despite the fact that convenience stores boast the shortest wait time among various other retail settings, in today’s competitive marketplace, businesses need to keep improving to remain successful.

This is where AI can provide immense value. Artificial intelligence platform Standard Cognition has already maxed out the concept of convenience by striving to eliminate retail checkout altogether.

Its solution is an AI-based system that lets consumers shop and pay without ever scanning a barcode or pausing to check out. The system requires only 27 cameras for implementation in a store environment. These cameras instantly identify customers by shape and movement, track and record the items they select and charge them via mobile app as they walk out the door.

Standard Cognition’s co-founder, Michael Suswal, sees the system as an opportunity to “rehumanize retail.” In a recent interview with TechCrunch, Suswal said, “We’re removing the machines that are between people: conveyor belts, cash registers, scanners.” The lack of checkout machinery means zero lines and also allows stores to rethink how they staff their locations. Instead of hiring cashiers, they can focus on hiring a customer service-oriented concierge to guide customers to the items they need and answer questions, making the shopping experience seamless, convenient and personal.

Not only is the convenience store’s internal layout and function beginning to change, but so is its ability to interact with customers outside the brick-and-mortar environment. Customer experience is, unsurprisingly, a key focus for convenience-store businesses. Their digital environment must be as seamless, straightforward and hassle-free as the in-store environment. Thus, it’s no surprise that several major c-store brands have begun to implement chatbots into their outreach strategy.

Chatbots are AI-driven conversational computer programs that leverage machine learning technology to simulate a real-time human interaction. Seeing that approximately 1.3 billion people use Facebook Messenger each month, convenience-store giant 7-Eleven saw it as an excellent opportunity through which to reach customers. With technology driven by Conversable, 7-Eleven launched a chatbot within the Facebook Messenger platform.

Conversable’s software platform uses automation and machine-learning tech capabilities to interpret consumer responses and become continually smarter over time. Customers can interact with the chatbot to sign up for 7-Eleven’s rewards program, ask to find a store location near them or learn about new discount offers—and can do so 24/7, even during nonbusiness hours. The chatbot allows customers to interact with the retailer on what feels like a personal level, making it easier to access information and have questions answered quickly while they’re on the go.

When convenience stores leverage this kind of platform, they can begin to bridge the gap between online and offline experiences, the much sought-after omnichannel approach, and simultaneously fuel the modern shopper’s desire for a personalized, one-on-one relationship with the brands they know and trust.

Operational efficiency is a recurring theme across the convenience-store industry. It can be difficult to streamline operations and cut costs when your business necessarily involves labor- and energy-heavy functions. A push for healthier, fresh food options means inventory must be more carefully managed and restocked more frequently. Plus, the new face of convenience demands a higher level of cleanliness, comfort and easy access.

For store owners to achieve these goals without surpassing budgets, their physical assets must be properly maintained and kept in top form. AI can help retailers automate some of these time-consuming processes—and, while some facilities professionals may see AI as a “job killer,” it can greatly reduce the burden of maintenance tasks on staff and allow them to spend more time attending to customers.

Investing in a service automation platform is a great place to start. It’s not difficult to see why a manual, spreadsheet-based facilities maintenance program can slow down operations: In this day and age, spreadsheets can’t keep up with the rate of service demanded by customers. Service automation software, on the other hand, provides a centralized, digital hub through which store owners and facilities managers can complete repair and maintenance at all locations from a single dashboard.

Advanced service automation technology does more than just organize assets and facility operations: It also can serve as a powerful decision-making tool, gathering, storing and analyzing vast quantities of data to predict the best course of action. ServiceChannel’s Decision Engine, for instance, puts AI to work by gathering asset data and analyzing trends in repair costs and success rates. The platform can then supply an appropriate price for repairs or approve maintenance proposals based on years of stored data.

When AI identifies and eliminates routine and repetitive tasks, such as sourcing contractors and approving work order requests, it greatly improves store efficiency. This, in turn, triggers a significant boost in revenue.

AI can also aid in the operational decision-making process by making recommendations around inventory based on historical data and predicted demand.

Daisy Intelligence, an AI software as a service (SaaS) company based in Toronto, recently began working with supermarket chain Harps Foods to improve pricing and promotions, with a goal of growing sales by 3%. Daisy uses historical data to find the optimal price point and inventory mix to grow sales, something that is largely beyond human capacity.

Gary Saarenvirta, founder of Daisy Intelligence, spoke about the advanced benefits of AI technology for grocers and retailers: “Our system delivers the final decision to the retailer on three fundamental questions: Which products should I promote? What prices should I charge? What inventory should I have in-store?”

And grocery store Earth Fare, another partner of Daisy, is seeing these capabilities translate to financial success. In the three years that it has been working with Daisy, store sales have jumped by 5% each year, a number that is expected to grow as AI continues to get smarter.

With AI’s powerful data analytics, convenience-store owners can get the answers they need to their most pertinent business questions and receive data-driven recommendations for optimal growth and revenue.

Final Thoughts

As AI technology continues to get smarter and more technically advanced, convenience-store shoppers can expect to see a substantial transformation in their shopping experience. Convenience-store owners, in particular, should start thinking about how to take advantage of AI’s unique capabilities.

With cashierless checkouts, chatbots and efficiency, AI allows stores to streamline and optimize daily operations, boosting sales and simultaneously enhancing the customer experience in ways that will stand out among stiff competition.

Lev Kurts is the chief technology officer for ServiceChannel, a Pleasanton, Calif.-based facilities management software company. Kurts has nearly a decade of experience in managing highly distributed teams responsible for the design and development of business-to-business software solutions.