A Look at AI in Convenience Retail Pricing

The Convenience Leaders Vision Group addressed the potential of AI for c-store pricing.

December 04, 2023

The Convenience Leaders Vision Group (CLVG) recently released a new Vision Report that addressed the potential of AI in predictive fuel pricing and dynamic in-store pricing. The report is based on a quarterly CLVG meeting.

Key takeaways identified in the report include:

  • Fuel price prediction and AI: Many participants in the meeting recognized the potential of AI to facilitate fuel pricing given the plethora of data it can analyze.
  • Diverse perspectives on an AI-driven future: While some members expressed reservations about the timing for widespread AI adoption in convenience retail, others highlighted the potential benefits.
  • Tailoring a customer-centric approach: The group discussed the adaptability of AI models to changing market dynamics and their potential extension into areas like car washes.

Frodi Hammer, founder and CEO of A2i Systems, gave real-world examples illustrating how AI can assist retailers in optimizing pricing strategies without jeopardizing customer loyalty. The discussion explored the nuances of pricing strategies and addressed interest and skepticism from CLVG members.

Joe Sheetz of Sheetz Inc. said, “I think what's important for our industry … we're not just about fuel anymore. It used to be that's what drove all the trips, and things have changed. And so any modeling we get into has to model what's happening to the total facility, not just what's happening to your gas gallons or your gas margin. What are you doing to your beverage sales or your food sales based on what you're doing with your gas pricing? It's all one big puzzle at the end of the day.”

The discussion also touched on diverse perspectives regarding the implementation of AI in the convenience industry. Scott Hartman, CEO of Rutter’s, and Donna Sanker, president of Parkland USA, expressed caution, citing the complexity of data and the need for human insight in pricing decisions.

Hartman said, “I think currently AI, or what's closer to a well-designed intelligent software, is out there in our phones and our cars today. So I think the near term AI we should all be aware of is the customer asking the device to find them fuel, asking them where's the nearest place with beer or placing a mobile order for food, talking to it, it's listening, it's placing the order, it's sending it to a place.”

Natalie Morhous, president of RaceTrac, raised concerns about the potential homogenization of the market if all businesses adopt similar AI models.