The third day of the National Advisory Group (NAG) Conference, held Sept. 8-11 in Minneapolis, featured a burning issue educational session on how artificial intelligence (AI) is impacting retail, from interpreting data to predicting sales needs, and how it benefits both the consumer and the retailer.
During the session, ‘Developing Your Digital Strategy: How Artificial Intelligence is Impacting Retail,’ panelists discussed how a digital strategy and AI tie in to all aspects of the store, including loyalty, the back office and the point-of-sale (POS) system. AI can be used to engage customers through communication and experiences, better manage inventory and price products optimally.
Bob O’Connor, President, Jetz Convenience Centers moderated the session and opened by speaking about the significant opportunity for change in the industry due to technology.
“In my lifetime, I have never seen the pace of change within our industry as I do today,” said O’Connor.
He said the future capabilities of technology, while unknown, are bound to be “huge and overwhelming.”
Paul Roetzer, Founder and CEO, The Marketing Artificial Intelligence Institute, spoke about companies today using a form of AI called ‘machine learning.’ Netflix, Amazon, Spotify and Google Maps all use machine learning to make predictions about consumer behavior. Roetzer said this is what AI is most used for in business and marketing.
Roetzer said he believes 80% of what we do every day will be intelligently automated to some degree in the next three to four years.
Although the impact will be huge, he said that AI is not as abstract or overwhelming as it might seem.
“Think of AI on a spectrum from one to five,” said Roetzer. In the majority of business (applications), we’re trying to get to a one or a two. We aren’t trying to take humans out of the equation.”
He provided several uses that AI has for retailers:
- Personalized offerings and promotions
- In-store customer experience
- Product mix optimization
- Inventory management
- Just-right staffing
Doug Haugh, President, Parkland Fuel Corp. spoke about how Parkland is currently using AI in its business. Parkland, an independent supplier and marketer of fuel and petroleum products, as well as a c-store operator, has locations across Canada, the U.S., the Caribbean region and the Americas.
Haugh said he thought about how AI could help in all aspects of the business, including monitoring food safety. He, like Roetzer, urged retailers to think about the tasks they do over and over, and the tasks that involve data, to see where they could utilize AI, what processes could be automated, to improve efficiency, save money and provide value.
“What needs to be automated, and is there a toolset you already have that you can just pick up and use?”
Pat Lewis, President, Oasis Stop N’ Go spoke about his company’s loyalty program, which it started in 2000.
“Prior to loyalty, you have one price. When you introduce a loyalty program, you have two price points. If you wanted, you could have multiple price points geared toward the individual,” he said. ‘What we’re trying to do is get the right offer at the right price to the right customer at the right time.”
Through the program, the company is able to collect data and then use it to gain insight into its customers.
“Machine learning can be used to learn what strength of offer will likely move a particular segment of customer. This can increase the efficiency of offers both in take-rate and value,” he said.
Lewis said the key is to ensure customers swipe their loyalty card every time so that the retailer has all of the data, the whole picture, in order to market effectively.
AI, he said, is like the Wild West right now, and it’s relatively expensive, but prices will come down.
Tuesday also featured six Information Exchanges, in which retailers discussed topics, including new and emerging fuels; CBD, vape and tobacco; industry consolidation; LEED certification and embracing the green movement; and more.
