Embracing GenAI & the Cutting-Edge Technology Revolution
LAS VEGAS — Technology is one of the most critically important tools for success in the convenience store industry, and with that mind, the Oct. 9 general session at the 2024 NACS Show was devoted to helping retailers further their understanding of the most talked-about technology innovation — generative artificial intelligence, or GenAI.
According to Victor Paterno, president and CEO of Philippine Seven Corp., technology and AI has helped the Southeast Asia convenience store chain emerge successfully from the financial difficulties caused by the COVID-19 pandemic.
"Today's the day for the geeks," said Paterno, who served as the 2023-2024 NACS chairman.
Philippine Seven operates 7-Eleven stores in the Philippines, with more than 3,000 stores on the main island of Luzon. Paterno described the pandemic response in the Philippines as one of the worst in the world, and it was during this time that the company experienced a crash in its net income in 2020.
Despite the challenges, Paterno focused on maintaining a positive culture, which included avoiding layoffs and helping to finance the company's franchisees to keep them afloat. Like c-store retailers in other parts of the world, Philippine Seven started selling more groceries, taking share points away from the supermarket channel.
However, that strategy was not going to be successful long term. "We started using AI to solve the problem of what to sell in our stores with variable planograms," he said, adding this enabled the company to launch products in a more focused manner, placing them on store shelves in areas where those products would sell.
Pointing out that he is a big believer in AI, Paterno said he believes the technology will help solve one of the industry's biggest challenges — retaining customer loyalty.
Brian Gray, managing director of Accenture, doubled-down on Paterno's vision of AI's importance to the future of the convenience and gas industry. "GenAI is the fastest-growing technology the world has even seen," said Gray, showing statistics on how the technology's usage rate has eclipsed that of the internet, Google and the iPhone.
"There's no question that those who embrace technology will win in the future and that those who don't, won't," he said, adding that GenAI offers retailers the opportunity to reimagine the retail experience in their stores.
Gray pointed out that people who say they are already using AI are probably using analytical AI to analyze trends and buying patterns, and help them make decisions. GenAI is a whole new ballgame, it can actually create work, he said. "ChatGPT is the iPhone moment in the history of AI. It gained 100 million users in its first 60 days."
For c-stores, GenAI can delivery new experiences and engage customers, generate incremental margin and drive operational efficiencies while reducing costs, Gray noted.
As examples, he highlighted a category manager who used GenAI to brainstorm on how to bring passing bikers into her store and a prospective employee who interacted with GenAI to apply for a job. In the latter case, the store manager was able to talk to the same AI and get a list of the top three candidates to interview based on the prospects' interaction with the artificial.
Another key use of AI is in personalizing customer service to drive more people from the gas pump into the store. Using GenAI with photo or even video at the pump, the retailer is able to create a personalized offer that will be the most appealing offer to that customer, he explained.
"It means the customer gets the best offer at the right time and delivered in the right way," Gray said.
He recommended that retailers considering AI should start experimenting with it. "Don't try to reinvent the wheel, ask for help if you need it," he said.
The 2024 NACS Show is taking place Oct. 7-10 at the Las Vegas Convention Center.