AI: The New Look for the Supermarket Industry

The brick-and-mortar grocery retail market is at a tipping point. Amazon, the leader in online grocery shopping is further triggering market disruption with its acquisition of Whole Foods Market and the introduction of Amazon Go, a high-tech, convenient mini-market, the store of the future.

The popularity of meal kit subscriptions and online delivery services have eroded in-store foot traffic.  Consequently, grocers must begin to unlock their consumer data to get a better handle on how to create a more personalized customer shopping experience. AI (Artificial Intelligence) solutions will facilitate the transformation of the supermarket industry.

A recent study by Accenture showed 78 percent of consumer goods executives agree AI will be a game changer. Established AI solutions have already revolutionized the way many leading retailers have enhanced their engagement with customers to deliver superior service. One innovative solution has been LoweBot, introduced by home improvement retail leader Lowe’s in their San Francisco market.  The autonomous robots crunch real-time data (pricing and inventory) to directly or via store employees provide improved personalize service. However, the grocery retail channel is at the early stages of adapting to AI technologies.

Walmart has been a market leader, leveraging technology to create the “seamless customer experience.” They recently upgraded their mobile app to include a product search bar, barcode scanner, customer review and Walmart pay features.  Customers can make “smart” shopping lists that enable them to check price and item availability before they enter a store.  Store navigation maps also facilitate a more convenient shopping experience.  Another recent technology addition in some stores has been their Pick-up-Towers: self-service kiosks located at the store entrance where customers scan the barcodes from their online receipt and products will appear on a conveyor belt. They have also implemented in select sections a “Scan and Go” shopping experience so customers can bypass the regular queue.  With the advent of their investment in all these technology driven customer experience solutions, Walmart will be in position to analyze the data gathered to improve.

CPG companies are also jumping on the AI bandwagon to assist their grocery partners to better understand consumer buying behavior. Kraft Foods integrates AI algorithms with its “iPhone Assistant” app.  They can detect the size of a family based on the recipes downloaded and determine other consumer product preferences.  Consequently, they connect consumers with the recipe ingredients needed so they can create shopping lists at nearby stores and automatically download coupons upon arrival at the checkout line.

The utilization of AI and the deep learning of consumer purchasing algorithms will clearly deliver a personalized customer experience that could lead to increased loyalty for retail grocers in the future. Thanks to the wealth of consumer and product purchasing data available, grocers can also use AI to improve their overall operational efficiency.  In the future, they will be able to better manage their inventory, reduce costly waste associated with produce and perishable items , and as a result, allow supply chain management to reach new heights.

By connecting the dots across all systems and implementing creative strategies, the automated future could improve the consumer experience and boost profitability for the grocery industry.