How AI Can Make Retailers Better

CSP Magazine Artificial Intelligence

AI takes care of repetitive tasks so humans can focus on more creative and substantial issues.

In the movie “2001: A Space Odyssey,” the computer HAL takes control of a space mission, making decisions that lead to the deaths of most of the astronauts on board, before it is shut down by the lone survivor, Dave. HAL is a literary example of artificial intelligence (AI). It is programmed to make decisions based upon the information it is given and a set of rules (although it decides to ignore these rules as it gains sentience).

Besides demonstrating the possibilities – and potential dangers – of AI, the 1968 movie depicted humans traveling between planets, setting up colonies far away from Earth and relying on computers to run their day-to-day lives. Although we are not traveling between planets yet, we do have AI working for us today – in a purely helpful capacity. The question is: How can AI help you be a better retailer?

Retail Applications.

During a panel I moderated at the SIGMA 2019 Spring Conference in April, we established a definition for AI: the ability of a computer to learn by recognizing patterns in information that is presented to it. Once AI identifies the patterns, it can make decisions based upon that data and continue to learn by reviewing the results. The technology is at its strongest in handling repetitive number crunching, spotting trends or making sense of large amounts of data. AI uses the information it receives to build a knowledge base so it can handle these tasks.

Retail applications of AI include:

Basket analysis.

AI-powered software can analyze sales trends and shopping baskets. The software tracks which items are sold and with what other items. This allows a retailer to maximize its promotional opportunities to increase sales. If one knows that most customers are likely to buy candy bar X with energy drink Y, then one can develop marketing strategies around that to maximize gross-profit dollars.


AI becomes even stronger when coupled with a customer loyalty program that provides specific information about who is buying what. Once a retailer starts identifying customers and their purchases, it can target offers and advertising. With customer demographic information (age, gender, address, etc.), a retailer can understand the type of people who are buying these products and target promotions to that demographic group.

Equipment monitoring.

AI-based monitoring services use software that tracks the per-formance of different pieces of machinery such as gas pumps or compressors, then monitors their performance. Thanks to AI, these programs can tell when the equipment is not performing correctly and needs to be repaired. It can also predict when the equipment is going to fail. Instead of waiting for a customer to complain, a retailer can be proactive in providing preventive maintenance for the equipment. Equipment downtime drops and customer service improves.

Improve and Enhance

This brings us to the three main points about using AI. First, these programs should help improve gross-profit dollars by providing more efficient and better targeted marketing opportunities.

Second, it should improve customer service and customer interaction by having equipment and systems that are working properly.

And third – and possibly most important – AI takes care of repetitive tasks so humans can focus on more creative and substantial issues. Ultimately, AI should complement human activity and not eliminate it (with all due respect to HAL). It should allow a person to be more productive, creative and involved in developing the business.

Can computers replace humans in providing customer service? AI will only enhance a purely transactional relationship rather than be the basis of creating customer loyalty. Of course, it also comes down to the quality and the training of team members providing the customer experience. The bottom line: AI is available today to help. Be focused on what you want to accomplish and see if there is a viable solution available. HAL will be waiting.

Published in: CSP Magazine September 2019

Roy Strasburger is the President of StrasGlobal. For 35 years StrasGlobal has been the choice of global oil brands, distressed assets managers, real estate lenders and private investors seeking a complete, turn-key retail management solution from the most experienced team in the industry.

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