AI in retail

AI in retail

Implementing artificial intelligence (AI) in retail is a way to enhance customer experiences, improve stock management, and get a better understanding of future demands. In today’s hectic world, it is no longer acceptable to generalise or even categorise retail customers. Instead, we need to understand each individual customer, their buying habits, and their reasons why they want to fuel and shop with you. 

That is becoming an increasingly complex proposition, and hiring hundreds of analysts is not the answer. AI in retail can help make millions of decisions to help guide you towards your strategic goals. With profit margins becoming slim and volumes dropping, AI can help identify how and where to find both. That way you can maintain your business until you are ready to make your transition to the next phase of fuels retail.

Artificial intelligence retail solutions

AI in retail has not really been a subject for discussion over the past decade. However, as the market becomes more complex and many retailers make investments into big data, CEOs and industry leaders are now beginning to question how to make use of this vast market intelligence they have at their fingertips. 

The value of data is almost nothing unless you effectively put it to use., And then it becomes one of the most expensive and valuable items on the planet. 

Artificial Intelligence will change the game for many retailers and consumers alike. Artificial Intelligence retail solutions will result in faster reactions to changing customer demands, a better understanding of what is sold versus what needs to be sold, stocking, staff relations and productivity, right down to the smallest increment of a cent, and how that influences your profit margins.

Today, there are many industry start-ups looking at how AI could benefit the retailer, but only A2i Systems is truly looking towards the forecourt and c-store with such a microscopic lens in order to help keep that business profitable and viable.

Through our Artificial Intelligence retail solution, we help retailers find the success they need in order to make investments into their own infrastructure. Specifically by reducing their hardware footprint, investing in green energy – EV, Hydrogen, eFuels, HVO – or ways to make the customer experience smoother and more touchless; change cannot happen without investment, and PriceCast Fuel uses Neural Net self-learning technology to help drive that success.

Click here to read more about our cutting edge AI Fuel Pricing Software.

How will AI affect the retail industry?

AI in retail will introduce a new layer of speed and understanding to an increasingly fast-paced world. Retailers who embrace AI will see their businesses transform and thrive.

In local communities, it will bring about a better focus on what is needed to serve people, whereas, on motorways and industrial parks, it will allow for newer experiences. Retailhubs will become the norm, places to eat, drink, workout, pay bills, bank.

Those who don’t embrace AI in retail will find themselves struggling to keep up. Their traditional customers will move away, favouring better experiences. They will not keep up the pace.

But as cities transform around these new businesses, we will begin to see a rise in the high-street too; something which had all but died off will come back to life. In cities, car hub areas will allow for cleaner and more closed off downtown areas, meaning that retail space will become more available, allowing for smaller businesses to open and thrive.

AI will enable this through the journeys already mapped by the machine, knowing what customers want and where. City planning through AI will mean better traffic flows, not just by cars but e-bikes and public transportation systems too, and that will be great for the economy.

What are the benefits of AI in retail?

The benefits of AI in retail are manyfold, not just for the customer and the retailer, but also the environment and the quality of life in general.

How AI can enhance customer experiences

As the retail and fuel retail industries begin to adopt AI, the patterns of customer behaviour will begin to adapt. From a pricing perspective, it means that customers will always be able to find a price that meets their requirements; but it is more than that.

Whether the customer wants to take their time whilst shopping or is looking for convenience, AI will find ways to tailor that journey to each customer. In stores, designs and flows will adapt based on the patterns. Engagement systems will make sure each customer has the right promotion or discount at the right time. Each member of staff will know who to communicate with and how.

How to improve stock management with AI in retail

In fuel and convenience retail, space is at a premium. Many fuel stations simply cannot get any larger in some locations, which means that stock must be kept to a minimum, but shelves must always be full.

AI will help understand the demand of the customers, the influencing factors such as weather, sporting events, holidays, etc., and will optimise which products should be held in stock, how many, and when they should be ordered, right to the very second.

AI will optimise delivery routes, making sure the shortest, most efficient and greenest path is used for trucks, in order to make sure stock is delivered in the most effective way. Automated forward stocking locations will ensure faster delivery of fast-moving goods, for the cheapest possible cost.

Forecasting of future demands with AI

Between 1905, when the first forecourt was opened, and 2000, when the supermarkets entered the fuel retailing space and went to war on price, not that much happened; but since then, the pace of change has grown to the point where every month we are learning something new about our industry and changing customer expectations.

Today we know that Generation Z has the lowest adoption of driver’s licenses and car ownership since records began, and that is driving a lot of the expert’s thinking around the future of mobility and retail.

And yet we do not have a crystal ball.

Gen Z is also having fewer children or having them later. They are more conscious of equality, and women are looking for more chances at career success than ever before. So that means we simply don’t know if they will decide to change their habits as they get older, it is too soon to tell.

As humans, we can sit back and watch, but AI can predict. It can analyse patterns and behaviours, and we have a tonne of data available which can help. Future demands and how we invest our money into retail will be determined by computers; artificial intelligence retail solutions will allow retailers to make more strategic investments, rather than be reactive to news.

AI in the retail industry is going to change how we perceive retail. It will allow retailers to blend between the physical and digital, as online retailers look towards brick and mortar to enhance their offering, and traditional retailers look to engage with consumers in their homes in order to keep ahead of the competition.

Using big data to automatically price products in accordance with supply and demand

Every time a customer transacts at a store, they are creating data. Every time a pump nozzle is lifted, it is creating data. In fact, today, if we look around the forecourt and the convenience store, we have thousands of connection points and customer interaction areas where data is being generated. Today, like point of sale (POS) systems become more advanced and enter into the world of cloud and edge computing, we are also getting better at collecting that data.

Through the use of Neural-net self-learning artificial intelligence (AI), we can put that data to good use. We can predict the demand for each product, and understand the supply, through the costs, deliveries and so much more. With that information, we can optimally predict the right price, for the right customer, at the right location, at exactly the right time.

As we move forward with AI, we will begin to then look at the convenience store, electric vehicle charging, car wash, food industry and quick service restaurants, coffee and much more, to ensure that the retailer is achieving the best possible margin outcome for their business. Our AI retail systems will help drive the correlation between the pricing of fuel, dry-stock, and all the other areas of their business, in order to ensure the best margin outcome on the whole.

What are you using your big data for today?

Companies have increasingly shown interest in collecting huge amounts of data, but simply sitting on the data creates no value. If anything, the sheer scale of the data collected could end up being more of a headache.

In 2011, a forward-thinking fuel retailer in Europe proudly announced that it was collecting data faster than any other retailer and that it was implementing Business Objects to allow staff to analyse the data in any way they would like. At the time, technology providers applauded them, but in private conversations, staff were crying over the length of time it was taking for them to generate reports specific to them. The vast amount of data collected was essentially useless because there was no specificity or toolset to properly use it. Ten years on, that retailer is still sitting on that data, but the reports are unused, and staff are utilizing Excel to do their own reports.

So what is the point of big data?

According to a 2017 report from Gartner, “By 2022, 40% of all large enterprises will combine big data and machine learning functionality to support and partially replace monitoring, service desk and automation processes and tasks.” The point of big data, therefore, is simple. It is there to assist the business in achieving goals and streamlining the business. Achieving that is anything but simple.

Big data is reliant on proper infrastructure placement. If you want your data to be useful for AI, it needs to be clean, yes, but it also needs the right storage to make it useful. We all believe that we can create our own secure cloud infrastructure, but that couldn’t be further from the truth. If you want speed, you need to utilize solutions that are already built for speed, such as AWS.

Fuel retail is changing rapidly. The big data being generated by the fuel retail industry is getting bigger every second, so do you really want to fork out millions of dollars or euros to keep that infrastructure up to date and relevant?

So the answer to the question of what you are using your big data for today is probably very simple, when you look deeper into it… not much.

How can AI benefit the retail industry?

A2i Systems excels in creating AI solutions within the fuel sector. Here are some key examples of how our AI solutions increased efficiency and intelligence.

Migrol – Switzerland

In 2018, the Swiss oil company Migrol needed a fuel pricing tool that would increase precision but also reduce manual work and free up time to look at more strategic ways of operating. They approached A2i with exactly that aim. Volume and margins are among the most important aspects in the oil industry. Price manager Marc Wettstein has been in charge of Migrol’s price decision system for a couple of years and before attending Migrol he worked in various oil companies. This is what he had to say about PriceCast Fuel:

“Prior to our close cooperation with A2i our fuel pricing was based on what I will define as an “old school multi-channel approach”: we used a lot of resources collecting data mainly through a lot of incoming phone calls and emails. In reality, it was a gut feeling approach. It wasn’t the most sophisticated or efficient approach and neither based on data nor very systematic.

PriceCast Fuel has provided us with a smart and lean infrastructure providing us with an extended degree of agility. All the data needed and the reporting solution are embedded in the solution from A2i. In the “old school times” we had to compare various data manually. It was highly costly both in terms of hours we use to compare the different datasheets we based our decisions on then. Using Price Cast Fuel we immediately get access to the information we need. It is faster, more efficient and we now avoid a lot of manual handling. It’s done automatically and we do not need additional information.

With Price Cast Fuel Migrol has become more competitive and gained a stronger market position. We are more agile and better prepared for future market fluctuations.“

Since installing PriceCast Fuel, the relationship between Migrol and A2i has gone from strength to strength. Marc has consistently been a great reference for us, as have all of our customers. We look forward to continuing working with Marc as we grow our business with them, and introduce Migrol to the new features to come!

Proven benefits

Looking at the case of Migrol, we achieved the following benefits:

  • Faster reaction to changing market conditions.
  • Increased margin and volume above and beyond KPI metrics.
  • Gave Migrol the confidence to focus on newer strategic initiatives, such as EV.

Tamoil – Netherlands

Amongst the various worldwide clients that daily use our AI-based software – PriceCast Fuel – for fuel pricing, you find the oil company www.tamoil.nl in the Netherlands.

Tamoil Nederland considers PriceCast Fuel a vital strategic element and for more than 5 years PriceCast Fuel has supported Tamoil with a real time perspective on key figures.

Mrs. Ineke van der Meer has been responsible for Tamoil’s stations and a core task for her is constantly monitoring the pricing. PriceCast Fuel gives her an instant overview of the price level and provides Tamoil with new strategic tools:

– PriceCast Fuel is excellent for us. It gives us a detailed view of a very fluctuating market, it strengthens our agility and plays a key role in providing a real-time perspective on our price fueling.

With every interaction A2i has with Tamoil Netherlands, we have constantly received positive feedback, and just like all our customers, Tamoil has been a regular reference customer for us.

Proven benefits

Looking at the case of Tamoil, we achieved the following benefits:

  • Improved revenue opportunities in a highly competitive market.
  • Better access to price monitoring and visual analytics
  • Be more agile in reacting to customer demands.

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