Artificial Intelligence in C-Stores

n the current C-Store climate, retailers are struggling to retain reliable workers nationwide.  With growing competition from conglomerates like Amazon Go, C-Stores are now looking for ways to adapt, survive, and increase their profits.

Hence, more and more, C-Stores are beginning to use artificial intelligence to cut costs as well as improve in-store experiences for customers.  This, they hope, will encourage more consumers to enter stores as AI in C-Stores is becoming increasingly expected by shoppers.

Below, we will explore how AI is being used within the C-Store industry and what the future may hold for technology innovation in convenient shopping.

Characteristics of AI

Artificial Intelligence is a term we hear being used in our everyday lives whether it be in our jobs or on our televisions.  Yet, with all the jargon floating around these days, it can be difficult to know exactly what AI is.

In the 2018 annual conference hosted by Conexxus (a leading technology-driven company that develop and implement technology standards in the C-Store industry), presenter and Revionics Chief Technology Officer Dave Thompson defined AI as:

A branch of computer science that deals with the simulation of intelligent behavior in computers, and the capability of a machine to imitate.

Simply, AI is technology that uses predictive analytics and machine learning to operate.  AI also includes the field of synthetic data - computer-generated data that models the real world.This means that AI machines can collect, process, and analyze the information they are receiving to then help retailers calculate consumer behavior patterns and make future market forecasts.

This allows retailers to make informed, data-driven decisions about their business plans whether that be which products will sell the best or understanding how consumers like items to be displayed on the shelves by monitoring facial reactions.  

Such technology can also act independently from human intervention.  They have various features that make them intelligent.  One example is their ‘deep learning’ strategy.  This allows AI to learn by example as humans do, making the technology increasingly clever over time.  

Hence, self-driving cars understand what stop signs are and can distinguish people from inanimate objects.  A lot of AI also possess facial recognition technology although this has been a controversial subject since its creation due to potential privacy breaches.

According to Semrush statistics, only 7% of companies in 2021 don’t use AI, but many are considering it in the future.  Those who don’t innovate risk being left behind, becoming unpopular with consumers, and therefore losing vital profits to their more technology-driven competitors.

How is AI Being Used in C-Stores

Now we know what AI is, you may be asking yourself what does AI do in C-Stores?  Well, AI has a wide range of uses in convenience shopping.  Firstly, AI is practically used in C-Stores to make shopping easier and more efficient.

This includes self-checkout kiosks that reduce slow face-to-face interactions.  These checkout machines can personalize shopping experiences by recommending related products that they think customers would also be interested in buying.  Thus, consumers will be more likely to purchase extra products leading to higher profits and allowing C-Stores to simply track what their customers are buying.

Secondly, AI is used in stores like Amazon Go, allowing consumers to walk into the C-Store, pick up their desired items, and leave with the money being billed directly to their bank account.  This is quite a complex process involving facial-recognition cameras in-store, intelligent apps that customers must use to enter the store through turnstiles, and shelf sensors to track which items have been moved and sold.

Next, AI is being used in C-Stores in the form of robotics.  In ‘vending machine’ style C-Stores, customers can purchase products from shelves with the aid of automation without needing to physically enter the store.  Similarly, these robots can stock shelves and have the capacity to make decisions such as when to pull expiring products from sale. This creates unique experiences for customers, offering exciting and futuristic service.

In summary, these methods can help C-Stores to provide captivating and immersive experiences for customers. They can help to prevent losses often created through theft, fraud, and food waste.  They allow for enhanced marketing by letting C-Stores track customer responses and add personalized shopping features.  

Examples of AI in Use and Being Launched

Now, what does AI in retail look like through real-life examples?

French startup ‘Storelift’ launched an automated C-Store in September 2020 under the brand name ‘Boxy’.  These micro-retail Boxy stores are made from repurposed shipping containers that can be implemented in neighborhoods where good quality foods and supermarkets are scarce.  This concept was created to reduce competition from Amazon Go who, in the US, have already created 26 physical stores.

To shop at Boxy, customers download an app to their smartphone and scan a QR code upon entering and exiting the store.  Items customers select are detected by weight shelf sensors and computer cameras that can understand when a product is picked up, put back on the shelf, or placed into the customers basket.

The cameras also detect facial gestures that can analyze customer decision-making processes to improve pricing and product selections.  However, the store does not currently use facial recognition technology.

These methods help to streamline shopping meaning that customers do not have to wait in queues or go through the hassle of checkouts.  They also mean that shoppers have easy access to essentials 24 hours a day 7 days a week within their immediate vicinity without employing service staff.

In contrast, Tokyo brand FamilyMart has been piloting AI robotics operations for their C-Stores.  Their Model-T robots are currently controlled by people using virtual reality headset terminals up to 5 miles away from the store.  

This allows the company to cut costs, battling labor shortages caused by Japan’s aging population and means that stores could eventually operate with significantly fewer workers.  In the future, the company plans for its robots to be controlled from anywhere in the world and even better, teaching their robots to copy human movements so that they can eventually operate without a pilot.

Challenges for AI in C-Stores

Despite all the excitement surrounding AI entering the retail market, there are many challenges that C-Stores need to be aware of before implementing such technology into their stores.  Here are 3 of the main issues:

1. One of the biggest challenges to AI in C-Stores is how rapidly underlying technology is changing. It’s progressing is such that in some cases, by the time you’ve implemented AI in your C-Store it could already be considered ‘outdated’.  Hence, it is difficult for convenience retailers to know exactly when to develop and bring AI into their stores without fearing that the next great application is just around the bend.
2. Another challenge that C-Stores face in implementing AI is resistance from their own workers.  Across the US, there are underlying fears that self-checkouts and contact-free services will completely replace C-Store workers.  While this will certainly cut costs for employers who are struggling to retain reliable workers, we can be sure that employees won’t be too happy.  This brings into question the ethics of implementing AI technology and thus overcoming human resistance is one of AI’s biggest challenges.
3. Lastly, C-Stores will face challenges in ensuring that customers feel trusting and happy using AI.  This involves being transparent about how personal shopper data is being used. This openness will hopefully keep customers loyal and feeling confident that their private information is not being abused or sold.

This trust also involves making sure that AI does not feel too detached from the personal shopping experiences customers have with employees.  C-Stores need to ensure a tailored experience for customers to eventually prefer technologically advanced shopping.  This is because many customers feel that AI aided shopping is inauthentic, especially in older customers who prefer personable service.

Future of AI in C-Stores

The future of AI in C-Stores is ambiguous.  However, we are seeing ground-breaking and innovative developments happening all the time.  One way that AI could be utilized by C-Stores in the future is through self-driving delivery robotics.  These handy machines are already being tested by various retailers like Amazon to deliver goods across the US.  

Such robots will be able to recognize objects and avoid obstacles, be given orders in our language and understand them, make informed choices if their missions are compromised, and will allow customers to track their orders every step of the way.  These machines could help C-Stores compete against ever-growing takeaway food delivery services and will revolutionize transportation.

AI will also force a lot of current ‘offline’ customers to use technology.  By requiring QR codes or smartphones to enter AI assisted stores, C-Stores can gain more insight into the shopping habits of those currently offline including the elderly.  This will allow for more effective advertising and marketing campaigns, which will in turn enhance profits.

Summary

Overall, AI in C-Stores is a new and exciting field.  But, there are very real challenges that C-Stores face in implementing and updating their AI systems should they want to keep their technology ‘up-to-date’ and relevant in today’s competitive climate.