One of AI's great promises is to take data and produce advanced information. The problem is that today, we have too much information that is hard to process; it's just too much. So, let's see what happens when we take real point-of-sale software data and put this promise to the test.

So, we decided to test the AI's understanding of a typical SMB retail shop from its customer's sales report. Knowing your customers is essential for retail success, and we will check whether an AI customer data analysis can help us make informed decisions about them.

The added question is which free AI tools can perform this task most effectively. Only a few SMB retailers have paid accounts for AI ChatBots, so we decided to restrict our tests to the free version. As you will see, we immediately ran into problems with this during this test.

Okay, let's test that and see.

Our Test

We have already established a comprehensive evaluation process to determine which AI systems deliver the most actionable insights here.

So, we challenged six leading free AI systems to analyse real customer sales performance data from 2023 and 2024.

Each AI system received identical instructions: "Using data from the attached CSV files, analyse and compare sales performance and visit frequency for top customers in an Australian Newsagency between 2023 and 2024. Identify key changes in behaviour for the highest-value customers."

For a fair assessment, we evaluated each system's customer analysis report using nine key performance indicators and scored out of 10:

Evaluation Framework

Quality of Information

How accurate was the data presented about customer behaviour and trends? If it's not correct, it's worse than useless.

Usefulness

Do these insights improve a retail business? We do not need useless information.

Clarity

Was the analysis presented straightforwardly and clearly?

Actionability

Did the report provide clear, implementable recommendations?

Accuracy

Were the calculations and conclusions drawn from the data correct? AI is known for giving wrong results. This is a common problem of AIs.

Adaptability

Did the analysis take into account specific retail contexts and customer demographics?

Depth of Analysis

Did the report go beyond surface-level observations to uncover meaningful patterns?

Creativity

Were there innovative suggestions for addressing the identified changes in customer behaviour?

Customer-Centric Approach

Did the analysis effectively segment customers and provide tailored approaches?

Testing Limitations

Unlike our pricing study, we encountered several practical limitations with free AI access immediately:

Claude and Chatgpt required paid accounts to process our instructions, so they failed the free test. However, as they are very important AI chatbots, we decided to test them with our paid accounts, but they failed immediately.

QWEN would only process our prompt by editing it in the window's notebook, so we had to redo the tests with consolidated data. Doing this with QWEN requires some computer skills, which others do not need. We marked it down for this.

All the other AI systems could process our request without issue using their free tier offerings.

Immediately, we saw that when we analysed the solutions, not all of them offered the same ability.

Results Summary

The performance rankings revealed interesting shifts from our previous pricing analysis:

Interestingly, while Google AI topped our previous pricing study, it ranked last for customer analysis.

Detailed Analysis of Each AI Tool

ChatGPT (Score: 78/90)

On the paid version, and I stress the paid-only

Strengths

• We thought it showed exceptional clarity. The report was well-organised, with sections in a logical progression We liked its innovative customer segmentation framework, which includes categories like "Growth Champions" and "Frequent Shoppers."
• We all liked its analysis and felt it was comprehensive
• What we liked was its tailored recommendations for different customer segments

Problems

• There was nothing we thought was innovative, but it worked by the rules. It ignored the location, that we were in Australia, and the same problem we had in the previous test.

Overall

ChatGPT transformed customer data into strategically actionable segments that you can use in your marketing and sales approaches. It saved time but gave us little originality.

Grok (Score: 68/90)

Since it's now free, this is a brilliant AI. You should be delighted with it.

Strengths

• We notice that it is outstanding in its accuracy and attention to detail
• The report was an in-depth and comprehensive analysis
• We liked its comparative analysis of individual customers
• It came up with a category, and we liked the emerging high-value customers

Problems

• We thought that most of the insights were limited in actionability; it's nice to know something, but what is the point of telling us if you cannot use it?
• Also limited in creative solutions
• The report sections did not follow a logical order.

Overall

Grok provided an excellent analysis and identified some subtle patterns in customer behaviour. It would be good to investigate why, though you'll need to develop action plans based on its findings.

DEEPSEEK (Score: 67/90)

Strengths

• Excellent formatting and visual emphasis that make your information accessible
• We liked that it had specific, implementable recommendations tied to analysis findings.
• It was accurate in its data presentation, with correctly identified trends
• Effective customer segmentation approaches

Problems

• Did not give a detailed customer-by-customer examination
• Not that good in a specific Australian retail context
• Recommendations were sound but somewhat conventional

Overall

DEEPSEEK struck a good balance between analytical depth and practical recommendations.

QWEN (Score: 66/90)

Do not underestimate this AI. The only reason it did not win was that it required some advanced computer skills to use. It was not just a simple matter of using it. 

Strengths

• We liked its brevity, which offered highly actionable recommendations
• We liked its concise format, clear headings and bullet points
• It provided good creative thinking in recommendations for improving customer visits
• We liked its suggestion for improving a loyalty program and bundling.

Problems

Small report: Now, this may not be a problem for you. Some of us liked that it produced a good condensed report. They felt they did not want a book; the quicker it could be said, the better. I disagreed; I wanted to know as much as possible. Let me know your thoughts on this below. We thought it didn't consider that we were talking about retail.

Overall

Many people like QWEN's concise, action-oriented approach, which provides quick and practical guidance without requiring extensive analysis.

Claude (Score: 59/90)

It was a paid version, yet its score was bad. You expect it to be better if you pay, but you don't get what you pay for with AI.

Strengths

• It provided accurate data analysis throughout
• We did like its breakdowns of top customers and their performance changes
• It had clear section headings and a well-organised structure
• It identified key account growth opportunities
• It also identified at-risk relationships

Problems

• Overall, it lacked specific implementation strategies
• The segmentation of customer types was bad.
• Again, as with some others, not much is known about Australian retail
• Report sections varied in detail

Overall

Claude was solid but struggled to translate those insights into tailored, implementable recommendations.

Google AI (Score: 55/90)

Now, Google AI is a good AI. Last time, it came out the best, but here, it's the worst. Google changed the free version because it wants you to switch to the paid version.

Strengths

• Methodical approach to analysis
• Accurate calculations
• We thought that it produced logically sound conclusions
• It considered many factors

Problems

• It presented an analysis without any specific recommendations
• Little creative
• Minimal segmentation of customer types
• Limited adaptation to retail

Overall

The free Google AI fell short of providing the strategic interpretation and actionable guidance that retailers need.

Key Findings and Implications for Your Retail Business

Our evaluation revealed several important considerations for using AI:

Different tools excel at different retail tasks

It's all good to analyse, but an ideal AI solution should connect the dots between "what's happening," "why it's happening," and, most importantly, "what to do about it." Not all AI ChatBots are equal.

The significant shift in rankings between our pricing study, where Google AI dominated, and this customer analysis evaluation highlights the critical point that AI is not a one-size-fits-all approach. It also showed that suppliers are moving to a user-paid model.

Usability

Busy retailers need an AI that produces a clear organisation and logical flow.

Practical Recommendations for Australian Retailers

Your specific need

The reality is that different AI systems excel at other tasks. There's no way around it; you need to test which one works better in your circumstances.

Prioritise actionability

Choose AI tools that connect analysis to specific actions you can take. Ask yourself: "What can I do tomorrow based on this information?" If the answer isn't clear, the tool may not be right for your needs.

Provide detailed context

We tested with more specific information about a business, location, and customer base. We did get better results, but that's outside of this test. I would include such information if I were doing it in a shop. Don't assume the AI knows your business environment; even if it does, it can use it.

Verify findings

We found that AI made errors and provided advice that didn't align with business reality. Always check.

Continue with a focused question.

These reports should be considered the start of your analysis. To get more insights, I would ask specific questions about the customer, the segments, loyalty patterns, or purchase frequency. For example, "Which customers decreased their visit frequency in the last quarter?" will yield more actionable results than "Analyse my customers."

Integrating AI Insights with Your POS System

For retailers using our POS systems, connecting AI analysis has tremendous potential. Exporting customer sales data in formats your AI can analyse is easy; you can do this in the report section. I will discuss this in a future post.

The Future of AI

This evaluation demonstrates that AI tools have already reached impressive capabilities. Using them, you can get free access to dedicated data analysts. They offer you access to sophisticated insights previously available only to large organisations.

My thoughts

While it's free, I recommend looking at Grok, our winner.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Creating a business plan for your shop

Making a well-crafted business plan can be rewarding and valuable. It provides clarity, direction, and a framework for moving forward.

Cost-Effective Planning Approaches

DIY vs Professional Business Plans

You can choose between crafting it yourself (DIY) or enlisting a professional. Both strategies offer distinct advantages and costs.

The DIY approach is cost-effective and typically free. It allows for intimate knowledge of your business and flexibility in timing and content. Many Australian banks offer free templates, which are familiar to the bank if you're seeking funding. A good one is available here, which is extensive and presentable.

Generally, it will take you about a week to work a few hours a day. It's one of those things that is easy on the third attempt, so count on mucking a few up in your first attempt. It should take a few hours a day over a few days. Remember, perfection isn't the goal; having something is better than having nothing.

If you prefer a professional business plan, writing typically costs around $6,000. You can expect a month-long timeline for completion. The process requires significant input from you to help writers understand your business model. While more expensive, this option provides high-level industry expertise. One plus is that it's perfect if you need a business plan for a bank or investors.

Draft the plan and present it to the professional for refinement to streamline the professional process and save time and money.

The closer the purpose aligns with securing funding, the more likely I find that the plan will be professionally designed and written.

Implementation and Monitoring

Your plan should include a section on budgeting for the upcoming year. Using your accountant's profit and loss statement is a good way to do this. I find the best approach is to take last year's figures, adjust them for the current year, and create a budget.

Once you've created your initial business plan, updating it in subsequent years becomes much more manageable. Typically, in my experience, only about 20% of the content changes annually, making it a manageable task.

The Power of Planning: Success Rates and ROI

“By failing to prepare, you are preparing to fail.” – Benjamin Franklin.

Don't overthink.

The goal is not perfection but a clear, actionable plan to guide your business towards success in the coming financial year and beyond.

Have you ever found yourself shivering in the cold weather, wishing you'd bought that cosy jumper you have at home? Or perhaps you are hot and want a cool drink? These weather-induced moments of need aren't just everyday inconveniences—they're untapped goldmines for savvy retailers. Just look at the recent cold spell that swept across Australia, now sending sales of winter gear soaring.

A research paper here done on the weather stated

"Analyzing daily sales at a national apparel and sporting goods brand’s stores reveals that weather effects on store sales are surprisingly persistent, even after accounting for shoppers simply changing when and where they make their purchases. Moreover, sales at stores that have more experience with adverse weather events have a lower response, suggesting that adaptation may reduce the negative impact of increasingly severe weather on sales."

As someone who has analysed sales data for many retail clients, I've seen firsthand how changes in temperature and rain can affect product sales. It is not rocket science. Different weather conditions change what people buy. This is a chart I made based on data from one of our users. 

This stacked bar chart showed the sales performance of different product categories (Drinks, Clothing, Accessories, and Indoor Items) across three weather conditions (Hot, Cold, and Rainy Days). The y-axis represents sales volume, while the x-axis shows the different weather conditions.

Key insights from this chart:

Drinks have the highest sales on hot days, as expected.
Clothing sales peak on cold days, likely due to increased demand for warm clothing.
Accessories like umbrellas showed the highest sales on rainy days.
Indoor items see increased sales on both cold and rainy days, possibly because people spend more time indoors during these conditions.

This chart effectively illustrates how different product categories perform across various weather conditions, allowing users to quickly identify trends and patterns in weather-based sales.

Hot Days, Cool Profits

When the mercury soars:

• Cold drinks sell
• Sunscreen sells

Chilly Weather, Warm Sales

As soon as it gets nippy:

• Hot drinks sell
• Jumpers and beanies become must-haves
• Heaters become essential purchases

Rainy Day Retail

When the rain comes down:

• Umbrellas sell
• Raincoats become good sellers
• Indoor activity items like books and board games see increased interest

This weather-driven consumer behaviour is critical to understanding and predicting your sales patterns.

Turning Weather Data into Retail Gold

So, how can you use this info to boost your sales? It's all about being prepared and using your point of sale (POS) software to your advantage for weather-based inventory management and retail sales forecasting.

Dig into Your Data

This is where our POS software for weather trends shines, as your POS system is a goldmine of information for retail data analysis. Here's how to tap into it:

Go to Register Reports

Now select "Top N Stock Sales for a Given Period.

Put in a date of a hot day and see what you get. Do a few. Now put in a cold day and so on.

Do this also for cold and rainy days—you'll start seeing patterns emerge. 

These are products that sell in your shop in those days. 

Stock Smart, Sell More

Once you've got your data, use it for weather-responsive merchandising:

Make categories for stock that sell well according to the day's weather, e.g., start with hot, cold, and wet.  Get the appropriate signs.

If a day in the morning is forecasted to be such a day, these signs and products will be placed in a prominent position in the shop. 

Communicating Weather Strategies to Staff

Your team plays a crucial role in implementing your weather-based strategy. Here's how to get them on board:

1. Hold regular briefings on upcoming weather and corresponding product focuses
2. Train staff to understand the connection between weather and sales trends
3. Encourage staff to provide feedback on customer behaviour during different weather conditions
4. Create simple checklists for weather-based display changes

FAQs: Weather and Retail

Q: How quickly do weather changes affect sales?
A: Impact can be almost immediate, especially for impulse buys like umbrellas or cold drinks.

Q: How far in advance should you plan for weather-related changes?
A: Today's seven-day forecasts are generally fairly accurate. 

So I would suggest that you check the 7-day forecast each week in your area and note any abnormal hot, cold, or rainy days coming up.

The Bottom Line

While Mother Nature may be unpredictable, your retail strategy should not be. Make sure you have the right approach and tech tools, to take advantage of the weather to make sales. Your POS system isn't just a glorified cash register—it can be a predictor of your customer behaviour. With some planning and the right tech, you can ensure your sales forecast is always sunny, no matter what's happening outside.

Have you noticed the weather affecting your sales? I'd love to hear your experiences! Comment below or reach out if you need help setting up your POS system to weather any storm.

Stay savvy, and may your sales be ever in your favour!

Today, a successful retailer needs to have your finger on your sales and inventory instantly; for example, sometimes you need these figures instantly, e.g. how much money is in the till NOW, what departments are NOW selling, are items being scanned NOW, etc. 

Our point-of-sale (POS) software makes it easy and quick to see what's happening in your business now. Let us get into it.

Real-time reporting

Your POS system allows you to instantly analyze your sales data to see what's selling now. Here's how:

> Look for the "Sales Analysis" button on your cash register. It's usually on the second page towards the bottom.

> You'll see a screen with plenty of analysis and figures. As I am interested in today's sales analysis, so I press the button marked with the orange arrow (see below)

Experimenting with these filters lets you instantly see what products or departments are hot sellers today.

It is worth experimenting to work out what is happening. These are Actionable data.

And this is just the beginning.

Once you have done that, check out the other buttons. These give you other types of critical information.

This gives you a massive database of instant reporting information that provides insights into your shop situation.  Try it.

Dive Deep into Key Performance Indicators

In addition to sales data, your POS reporting provides more critical inventory-level KPIs metrics, employee performance, and more.

> View reports on stock levels, bestselling items, and employee sales totals.

> These figures help you identify what's working so you can do more of it. They also reveal problem areas you can improve.

Make Data-Driven Decisions

With the powerful reporting tools built into your POS system, you have the insights you need to make intelligent, data-driven decision-making for your business instantly.

Start using your POS reporting to gain real-time insights into your business. With your finger on the performance pulse, you can flexibly respond and make changes that drive growth.