The Convenience Leaders Vision Group (CLVG) has released its most recent Vision Report based on the group’s April quarterly meeting which focused on artificial intelligence in convenience retail.

The main topics included:

  • The dawning of a new era in analytics as generative AI evolves
  • Generative AI in simple terms
  • How AI is quickening the pace of business today
  • A micro perspective of AI at TXB stores
  • Personalization through AI

Tom Svrcek, analytics partner with McKinsey & Company, got the ball rolling with a presentation where he explained how generative artificial intelligence works and some different usage applications.

Quantity of data and the ability to process it via algorithms with cheap computing power are the reasons Svrcek believes AI discussions are so relevant today. “A new level of performance is being unlocked because of AI,” said Svrcek. Looking at inventory optimization alone, AI fits well within the scope of perfecting that task. With today’s level of AI comes the ability to predict demand at a “very, very granular level,” he said.

The way things change with AI today is the predictive element of understanding what’s happening fast enough to be able to change the result. “There are things you can do and react to much more quickly that you probably couldn’t do before AI”, said Hal Adams, consultant. He noted that when AI is in place, it elevates a traditional forecasting model.

Drayton McLane Jr., chairman of McLane Group, views this kind of predictive application as the best way to generate orders and keep a store fully stocked. “The weakness in ordering for convenience stores is that most orders are completed by the convenience store manager,” he said. The problem with that rests in the constant turnover of managers at the store level. Most managers complete orders quickly, often by visual cues based on shelf stock, and all while doing many other tasks simultaneously. “That’s proven to be very inaccurate,” he said.

Kevin Smartt, CEO of TXB, primarily uses AI through SparkCognition via its security camera feed. The predictive modeling approach maintains an accurate headcount of people who enter the store, which in turn alerts store staff to how many employees are needed at the counter. It allows stores to immediately move people around, he said, “so there is not so much dwell time.” Other practical examples of how the AI approach changed TXB’s store level tactics relate to bathroom cleaning schedules and safety.

AI-driven fuel pricing scenarios were interesting for Smartt and a number of other CLVG members. The ability to set gasoline pump prices based on individual customer behavior offers a whole new opportunity, noted Greg Parker, CEO, Parker’s Kitchen.

The collection of views on the topic of AI from CLVG members, ranging from uncertainty over whether this is a dangerous advancement to human life to enthusiasm over the potential, provide a thought-provoking read.

The full report includes a summary of the discussion (“CLVG Views”), the full transcript of the meeting (“In the Room”) and the McKinsey presentation. It is also accompanied by supplemental articles and views on subject matter discussed.

To get this CLVG Vision Report CLICK HERE. On the same page you can also download previous CLVG Vision Reports and the Convenience Technology Vision Group (CTVG) May 2023 Vision Report.