AI

Demystifying AI: Artificial Intelligence in the P&C channel

The petrol and convenience (P&C) channel is rapidly evolving, driven by shifting customer expectations and technological advancements. Among these technologies, artificial intelligence (AI) stands out as a game-changer, offering opportunities to optimise operations, enhance customer experience, and boost profitability.

Despite AI’s cutting-edge reputation, many of its applications are accessible to small and medium-sized retailers, providing impactful benefits without requiring exorbitant investments.

Throughout this feature we will look at AI tools that retailers can implement right now at minimal cost. Before diving in, it’s important to ensure that businesses align their AI ambitions with their business goals.

As Ren Frisé, Director of Digital at Enigma, explains, “AI is already part of many tools that retailers use daily, often without realising it. It’s simply technology that helps perform tasks more efficiently.”

AI is transforming the P&C industry in tangible ways, offering solutions that are scalable for small-to-medium-sized enterprises and advanced enough for major players. The key to success lies in understanding how AI can address specific business needs, starting small, and gradually expanding into more complex applications.

Accessible AI applications

Small-to-medium-sized retailers often grapple with limited budgets and resources, yet AI applications are increasingly within their reach.

Nathahn Walter, ANZ Regional Sales Manager at Zebra Technologies, highlights inventory management as a prime example.

“An intelligent inventory management system helps ensure shelves are stocked appropriately, minimising both overstock and stockouts,” he says.

Predictive analytics, powered by AI, analyses historical sales data to forecast demand, enabling automated reordering and reducing waste.

Frisé agrees, adding that customer engagement tools offer another low-cost starting point.

“AI can analyse past sales data to predict what customers will need and when. It can also help retailers understand customer habits, offering promotions personalised to individual preferences.”

For instance, loyalty apps can suggest discounts on a customer’s favourite products, encouraging repeat purchases and fostering loyalty.

Customer service is another area ripe for AI adoption. Chatbots, which are increasingly powered by advancements in Natural Language Processing, can handle routine queries, direct customers to products, and even provide real-time stock updates. These tools free up staff for more complex tasks, significantly improving operational efficiency.

Corinna Reeves, Regional Industry Lead for Products & CMT at Avanade Australia, emphasises the role of simple AI tools.

“With minimal investment to start, small and medium-sized retailers can adopt tools such as ChatGPT and Microsoft Copilot for Edge to drive more efficiency and better customer outcomes.”

Planning for Success

The effective integration of AI requires careful planning. Retailers must ensure that AI aligns with their business objectives.

Frisé stresses the importance of starting with clear goals: “AI is a tool, not a solution in itself. Retailers should start by defining what they want to achieve, whether it’s reducing stockouts, improving customer satisfaction, or increasing sales.”

Preparing high-quality, organised data is another critical step. AI thrives on clean data, so retailers must audit their existing information and consolidate scattered systems. Walter advises, “Preparing your data infrastructure is vital; ensuring that data is clean and well-organised will facilitate successful AI implementation.”

Educating staff is equally important. Training ensures employees understand the benefits of AI and how it integrates into daily operations. Frisé recommends a phased approach to AI adoption.

“Start small. Automate simple tasks like stock tracking, then move to areas where AI can assist decision-making, such as personalising promotions. Once comfortable, scale up to tackle larger challenges like predictive analytics for inventory.”

Enhancing the Customer Experience

AI excels in personalisation, a critical differentiator in the P&C sector. Personalised marketing is one of AI’s strongest assets, enabling tailored promotions based on customer behaviour.

Reeves explains that AI algorithms can analyse purchase history and browsing behaviour to recommend products likely to interest each customer.

“This level of personalisation not only increases customer satisfaction but also drives repeat business and loyalty.”

Mahesh Krishnan, Chief Technology Officer – Oceania, Fujitsu, highlights a number of real-world examples displaying the transformative potential of AI in customer interactions.

Z Energy in New Zealand uses license plate recognition to provide a seamless ‘Pay-by-plate’ service, while Shell Coles Express in Australia employs targeted advertising driven by AI insights. Retailers like 7-Eleven are rolling out mobile payment options, making the shopping experience faster and more convenient.

In addition to marketing, AI-powered loyalty programs offer customised rewards that go beyond generic points systems. Frisé notes, “Imagine a loyalty app that knows a customer’s go-to snack and offers it at a discount during their usual shopping hours. These small touches make customers feel valued and encourage loyalty.”

AI also optimises in-store experiences through tools like Vision AI, which Krishan says is already having an impact on the channel.

“Vision AI is transforming how petrol and convenience stores understand customer behaviour by analysing video feeds to track foot traffic and product interactions. This data helps retailers optimise store layouts and marketing strategies, ultimately enhancing the shopping experience and boosting customer satisfaction.”

Quick Wins or Long-Term Strategy

Retailers new to AI are often advised to prioritise “quick wins” before delving into complex, long-term initiatives. Walter suggests starting with solutions that deliver immediate results, such as automating inventory management or implementing self-checkout systems. These technologies streamline operations, reduce costs, and improve customer satisfaction with minimal upfront investment.

“Retailers with limited tech resources can still effectively implement AI solutions by choosing scalable, easy-to-use technologies like cloud-based AI solutions, which require minimal infrastructure and are designed to be user-friendly,” says Walter. “With comprehensive support and training, this will ensure that retailers can maximise the benefits of AI technologies even with limited technical expertise.”

Krishnan explains that the ideal approach combines quick wins with strategic long-term applications.

“Advanced solutions like smart shopping trolleys and fully autonomous grab-and-go systems require significant investment. However, starting with simpler initiatives, such as stock monitoring systems, can build confidence and demonstrate immediate value. These quick wins pave the way for investing in more complex, costly solutions that can have greater returns over time.”

Frisé advises retailers to focus on small, manageable projects that solve immediate problems while setting the stage for growth. Start with one or two initiatives, evaluate the results, and expand from there.

“One of the best places to start is customer engagement. AI can analyse purchase patterns to recommend products or create offers, encouraging repeat visits and higher spending. For example, sending personalised offers to loyalty members based on their buying habits can immediately boost sales.

“Inventory management is another high-impact area. AI can predict demand and automate stock replenishment, ensuring popular items are always available. This not only improves customer satisfaction but also reduces waste and saves time.”

However, Frisé explains that long-term success requires laying a solid foundation. Dynamic pricing is one example of an advanced AI application. This technology adjusts prices in real time based on market conditions, competitor pricing, or local events, ensuring competitiveness while maximising profit margins. Similarly, AI-powered supply chain optimisation enhances efficiency and reduces costs over time.

Avoiding common pitfalls

The adoption of AI is not without challenges. One common mistake is overreaching too soon. Retailers often dive into complex AI projects without clear objectives, resulting in wasted resources and minimal impact.

“Retailers often dive into complex AI projects without clear goals, which can lead to wasted time and resources. It’s better to start small with simple applications like personalised marketing or automated customer support. These projects are easier to manage and deliver quick wins,” says Frisé.

Walter warns that a common mistake is implementing AI without aligning it with business goals.

“It is advisable that retailers ensure AI initiatives are directly tied to strategic goals, such as improving customer experience or operational efficiency. Another potential pitfall is neglecting the importance of data quality.”

Frisé agrees that poor data preparation is another issue that retailers face.

“AI relies on clean, well-organised data to work effectively. Retailers should audit their data and ensure it’s accurate before launching any AI initiatives. Often, vendors can assist with this step, so don’t hesitate to ask for help.”

And finally, Frisé says that it is important to not get caught up in the hype.

“Retailers should focus on solving real problems rather than adopting AI for the sake of it. Asking vendors tough questions about their products and understanding the limitations of AI can save a lot of headaches down the road.”

The future of AI in P&C

AI is poised to redefine the P&C industry further, with several emerging trends leading the charge. Frictionless checkout solutions, such as automated payment systems, are becoming more widespread, offering faster transactions and reduced wait times. Vision AI is also transforming in-store operations by providing insights into customer behaviour and store performance.

Predictive inventory management is another game-changer, helping retailers stock the right products at the right time. Reeves explains, “As AI continues to evolve at a rapid pace, we can expect more innovative applications that will further transform the retail landscape.”

AI represents more than a technological shift; it heralds a smarter, more efficient, and customer-focused future for the P&C sector. By embracing this change, retailers can ensure they not only keep pace with industry trends but lead the way in redefining convenience retail.

This article originally appeared in the December/January issue of Convenience and Impulse Retailing magazine.

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