Joining in the AI Revolution

Artificial intelligence (AI) is set to change the face of retail within the next decade. Is your c-store chain prepared?

By Erin Del Conte, Senior Editor

At a Shell station at Eighth and Market streets in San Francisco, a five-foot tall, 400-pound robot acts as the forecourt security guard.
It’s equipped with four cameras, each pointed in a different direction to record activity from multiple angles as it rolls around the forecourt at three miles per hour scanning and recording its surroundings.

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Meanwhile in Chicago, Amazon has opened its fourth Amazon Go site—its first outside of Seattle, where customers scan an app to enter, select items and leave without checking out. Ceiling cameras monitor the selection process and customers’ credit cards are automatically billed. Amazon plans 3,000 of such locations by 2021, according to Bloomberg.

At BevMo!, a California-based liquor store, thanks to a pilot program in conjunction with Fellow Robots, a robot scans shelves and lets employees know via text message when it’s time to restock a specific SKU, freeing employees up for more customer-facing tasks.

AI REVOLUTION
“The fourth industrial revolution is alive and well in retail,” Paul Martin, head of retail, UK KPMG, said recently during a session on robotics at the National Advisory Group (NAG) Conference held recently in Jacksonville, Fla. The fourth industrial resolution, he said, is all about AI.

Robotics are set to revolutionize retail, and not in some distant future scenario, but within the next 10 years. Not only will robots begin to handle more physical tasks, but they’ll also begin to manage more cognitive tasks by learning algorithms that allow them to make decisions on our behalf.

Martin pointed to a San Francisco-based pilot by Target that used an inventory-control robot called Tally, built by Simbe Robotics, to browse aisles and scan 20,000 to 30,000 SKUs per hour, focused on taking inventory. Tally did in one hour what humans could do in four.
Meanwhile, Amelia, the most advanced chatbot in the world and considered the most human AI, was created by IPSoft and is used by a variety of institutions. ‘She’ can answer calls and handle simple requests, such as for an address or store hours. Most importantly, she knows when to bring in a human to respond to more complicated inquires.

Martin pointed out that in one study she cut down 80% of the calls that wasted local government time.

Now is when c-store retailers should prepare for this inevitable shift toward AI, so they’re ready to act when the time is right. Not only will retailers need to roll out AI technology so as not to be left behind, but they’ll also need to grapple with ethical questions around the implications for employees, as well as the disruption AI will bring at store level.

HUMAN ELEMENT
One big question many retailers are asking is what will be the cost to human employees, what responsibility do business owners carry in looking out for their fellow man, while also needing to prioritize keeping pace with new technology?

Some are more optimistic, imagining a future where technology complements human employees, as opposed to replacing them.

They reason AI will allow employees to focus on face-to-face interactions with customers, while a robot handles the drudgery of inventory taking and stocking shelves. They expect human traits like empathy and friendliness to become more valuable hiring skills.
Jobs may simply change. We’ll need more data scientists and robot mechanics.

But Martin acknowledged AI will present a significant societal challenge. “On the one side I would argue that creativity is well and alive. There are a lot of opportunities out there that weren’t out there years ago. But there is a big risk of a cohort of people being left behind. I do believe policy makers do not understand the pace of change today.”

Retailers are wise to begin thinking about these issues now before they are forced to make decisions that impact their business and employees. Where might you consider implementing AI? Are there pilots you could begin running now?

And keep in mind, your frontline employees won’t be the only ones impacted. Within 10 years, robots are expected to be capable of replacing executive level decision making, too. AI disruption is coming. How will your c-stores respond?

Erin Del Conte is a senior editor for Convenience Store Decisions magazine. She can be reached at [email protected].