Using AI to Augment Your Company's Collective Intellect
Artificial intelligence (AI) has the potential to change industries, particularly retail, forever.
Business leaders say they believe it will be fundamental in the future, and 72 percent say it’s a business advantage, according to Price Waterhouse Coopers.
However, while pioneering work is happening the world over for computers to think and reason with the rapidity and fluidity of humans, many practical and theoretical barriers still stand between the state-of-the-art and a nuanced, thinking algorithm.
Perhaps one day, AI will be able to recognize and reason about the kindness extended by store personnel to a customer or the hard work put into a specific location around keeping the forecourt clean and stocked. But, more likely than making people obsolete, AI will actually extend human intelligence.
Using AI to Extend Human Intelligence
How will AI be able to extend human intelligence in convenience, fuel and other industries?
Much of the way c-stores have successfully operated in the past has focused on anecdotes and subjectivity. Typically, c-store executive teams identify Key Performance Indicators (KPIs), such as inventory turns and accuracy, stock-outs, service levels and more, to measure against performance.
Management posts these at work centers, strategic operations areas, and other areas where they can be readily viewed as a best practice to execute against; and analyzes them daily, weekly and monthly for trends, benchmarking and critical path analysis.
However, in today's increasingly competitive c-store landscape, execution, while important, is not enough.
So, how do organizations use data to their best advantage?
AI might be leveraged to gain a more objective, data-driven perspective that human experts can capitalize on to ask better questions across hundreds or even thousands of stores.
Asking Better Questions to Get Better Answers
What questions are you currently asking of your collected data?
Experts say it begins with committing to a strategy that uses data — but not to the exclusion of anything else. Frank Sesno, author of "Ask More: The Power of Questions to Open Doors, Uncover Solutions and Spark Change," says teams can’t "park their common sense" when using AI and instead must ask diagnostic questions like: What’s wrong? How do we know? What are we not seeing?
Perhaps a company’s new product line recently bombed. It might be instinct to assume it’s not desired by the public. But in using a focus group, managers may instead discover that people just don’t know it exists. While sales data shows it’s not selling, the reality is that marketing is the real issue.
Asking the right questions can help to identify the right data to analyze.
How do you ask the right questions? A good trick is to flip a question around. Instead of, "Why are there so many coffee beverages purchased after pumping fuel?" perhaps try to answer: "Why are there not more dispensed beverages being purchased after pumping fuel?"
Better questions can also be asked if you have domain knowledge about the subject. If the project involves specific correlations between two in-store categories, an understanding of the category trends within the market and region, as well as general consumer sentiment, will help in creating interesting questions.
Also, it has been our experience that nothing beats going onsite and observing what is happening on the ground. If I need to predict micro-market fuel volume predications, I always ask to visit the location.
I once followed an area manager around his, and the competition’s, stores. That was more insightful than weeks of research, meetings and discussions about algorithms.
Good questions flow easily once you know the context of your data.
It has been said, "Millions saw the apple fall, but Newton was the one who asked why." In business today, coming up with better decisions is critical, but that can only happen by asking better questions. Otherwise, opportunities can be missed.
AI provides an opening for convenience and fuel retailers to augment their collective intellect by more effectively analyzing and asking better questions of their data.
Michael Johnson is vice president of North American operations at TLM Technologies, a provider of a next-generation, cloud-based POS, back office and head office application suite called Evolution. It is used at 750-plus convenience stores in the United States and thousands of locations worldwide.
Editor's note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.