Photo: Canva
October 16, 2023
Have You Noticed How AI Has Changed Supermarkets?
According to Forbes, “Artificial intelligence is already taking over grocery stores.”
Lindsey Mazza, global retail lead at Capgemini Group, explained that “when retailers understand the motivations that drive consumer purchases, they can reach their highest potential.” And AI is able to help grocers do just that. The grocery industry is “an industry where small improvements can be the difference between success and failure and AI can make the difference. Grocers have gotten the message.”
One company, Veeve, has developed a gadget that attaches to shopping carts, showcasing promotions to shoppers as they navigate supermarket aisles. Additionally, its integrated cameras spot out-of-stock or incorrectly placed items, flagging issues even before the store’s management becomes aware.
TechCrunch noted that “retailers can integrate their Retail Media Networks, where you see all the digital ads, into the Veeve carts.” The founder and CEO of Veeve also mentioned that when an increasing number of shoppers ask a similar question to supermarket associates, normally no record would be made. But now, AI is capable of monitoring these situations and adapting accordingly.
Another tech company, ShopperAI, showcased how it trained its AI using video footage from the snack section in supermarkets. The AI observed that numerous shoppers would pause, examine the multipacks, then return them and move on. Based on these observations, a suggestion was made to organize the shelf so that multipacks from all brands were grouped together. This reorganization not only boosted the sales of multipacks but also resulted in an 18% surge in overall packaged snack earnings.
Upon examining the shampoo section, the AI’s analysis revealed a surprising statistic: merely 30% of those browsing were women. In an effort to attract more female customers, the suggestion was made to place feminine care items adjacent to the shampoo. This strategic rearrangement resulted in a significant increase in female foot traffic, leading to a 25% boost in shampoo sales.
Although these discoveries are beneficial, it’s fair to wonder if smaller-scale stores and businesses around the world have already made these insights.
Other AI-assisted enhancements include innovative weekly recipes tailored to customers’ preferences and customized shopping baskets that are pre-assembled based on their needs. Additionally, guidance within stores has improved, as AI can assist shoppers in locating their desired products with ease.
According to CNBC, autonomous inventory robots with cameras and sensors “that can verify price signs and look for out-of-stock items are being deployed at big box stores like BJ’s Wholesale and Walmart-owned Sam’s Club.”
Winsight Grocery Business also shared a recent study completed in partnership with FMI-The Food Industry Association, which “shows that implementation of artificial intelligence in supermarkets is expected to grow by 400% before the end of next year and could eliminate 18% of store associate positions, 73% of store tasks and 53% of shopper queries.” This shows how much potential AI has to transform omnichannel strategies for grocers. However, “only 13% of survey respondents said they’re using the technology in more than one area of the store,” while 74% stated that they look for AI capabilities when they consider new software.
Discussion Questions
How do you predict supermarkets evolve in the near future with AI and robot implementation? Do you think grocery stores will begin to lose social and community elements if they become too AI-oriented?
Poll
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Anything that reduces store labor by 18% and 73% of store tasks is going to get the attention of grocery retailers. AI is gaining fans in the supermarket segment and throughout retail at the store level. But the reality is that investments need to be made while many stores are wrestling with basic blocking and tackling. Still, the stat that “74% stated that they look for AI capabilities when they consider new software” says a lot. It’s also no wonder that retailers are hiring data scientists, especially those who specialize in retail data, at an accelerating rate.
As for AI replacing store staff, filling stockouts is an excellent use case. A staff member would have to run around the aisles constantly to even come close to the coverage the Veeve cart cameras must offer. Maybe a good test for potential retail stars would be to ask a shelf-leveler how they would use AI to reduce stockouts! Yes, this still ties into my push for retailers to hire and promote from within.
In any case, using shoppers to push stockout-detecting cameras to notice shelf gaps almost instantly is nothing short of brilliant. It’s even better than the shift to self-bagging and self-checkout, in a way, because there’s no added effort needed from the shopper. AI is here to stay, and these use cases are just the beginning. This requires serious investment, but the rewards are clearly there.
More grocers will invest in AI-driven smart carts, smart shelves, self-checkout and store surveillance. In-store AI innovations support a superior store experience, retail media growth and loss prevention.
Balancing tech-driven efficiency with warm human relationships will help grocers meet consumers’ need for convenience and care.
The biggest change I’ve noticed has been product selection. AI allows faster and broader data to be analyzed and distributed directly back to decision makers in the company. The result has been an optimization of products to stock more of what sells well and less of what doesn’t. Sounds like a logical thing to do, but what it does is optimize customers into a very limited choice of products that erodes customer satisfaction and loyalty. If the products you love are dropped too often and you are pushed to adopt another brand you will happily shift to buying what’s cheaper, which creates a profit eroding spiral. Using AI to improve the customer experience, optimize productivity where it makes sense, but preserve the widest reasonable breadth of product to then allow AI to help hyper-personalize — now you’re talking profitable grocery.
How many times are we going to play the smart cart game and lose? Remember the 80s and Videocart? Remember all the work by numerous researchers showing how little time shoppers spend in a store section? From the shopper standpoint, these are irrelevant and often intrusive tools. If a store or section manager isn’t walking their aisles, shame on them.
Couldn’t agree with you more. When I was making purchase recommendations for store technology at Target, it felt like there was a newly minted shiny technology that would help us find stockouts at the shelf. Everything from robots with cameras to smart carts to smart shelves that used the shadows of products on the shelf to determine where there were open slots at the shelf. We could never justify the tech because there just wasn’t a scenario where would not want store teams walking aisles to see how things were merchandised and where there were issues anyway.
Didn’t Walmart give this a try and then abandon it? Robots in the aisle?
I think we’ve gone beyond hype to hyper-hype on a technology with a ton of potential in the supply chain and healthcare.
PS You’d think AI would help them stay in stock. That hasn’t happened.
They did try and abandon them. Robot’s in aisle were even more irritating that Instacarter’s to shoppers. But scanning the shelves with cart mounted video as a continuous monitoring for stockouts is a good plan, if you have the right “compute in store” to deal with the massive volumes of data, and not try to send it all back to the cloud.
Those are some compelling statistic’s from Winsight. – a 400% increase in AI implementation, and 73% reduction in store tasks, 18% reduction in labor….(etc). Betting those values were generated as an NLL hallucination.
There is no doubt that AI will be a powerful support for Retailers and Shoppers and used in ways tomorrow that are unimaginable today. But let’s face it, a lot of the tasks in store involve physical activity, stocking shelves, cleaning meat counters, etc. Some balance in this hype is required, just ask Chat (who quite reasonably responded to my query with 15 topics for AI in Retail, and the following sound advice:
The specific capabilities and applications of AI in retail can vary depending on the retailer’s size, goals, and available resources. AI has the potential to streamline operations, improve customer experiences, and drive revenue growth in the retail industry.
Who needs personal commentary anyways!
I haven’t necessarily noticed anything yet, but I do think all of these improvements are beneficial to stores and to shoppers. We can also expect these enhancements of other categories as well.
I believe there are significant benefits to be realized by AI helping with replenishment and out of stocks, all of which benefit the customer. I would hope that rather than take massive cuts of store teams, retailers use these technologies to help free up associates’ time so they can focus on the customers and spend less time trying to figure out why this week’s ad product is missing or tracking down price changes and stock-outs.
Most of the AI that has been deployed in store is not the applications that shoppers would notice, as it is more operational and merchandising-focused. As others have mentioned, several retailers have tested robots on the sales floor and they haven’t proven to provide a positive ROI or they disrupted the customer experience. There are a lot of areas that AI can improve, including customer-facing product promotions and recommendations. We will continue to see broader AI deployments.
Most AI will become embedded in back office, planning and supply chain activities, with some customer facing components in online stores and ecommerce. We may see some store functionality for AI in fraud detection , camera vision, and checkout monitoring with a bit of camera-driven shelf monitoring as well, but these will be the novelties in the stores until infrastructure costs become reasonable and most customers won’t see it. The best AI systems will remain invisible to consumers. The Veeve and ShopperAI solutions will be interesting tidbits, but once data is uncovered, these become optimization plays. That said, the value will be realized by retailers who have their data houses in order and can use the data to make decisions- still a long way to go for many retailers.
Smart carts, robots with video cameras, etc. Sounds great, but I haven’t seen anything like that in the stores I visit — and neither do the great majority of those polled by RW. Doesn’t mean it won’t happen some day. I just don’t see that day ever arriving — too costly, too complicated, too little human involvement.
The grocery shopping experience is becoming more personalized than ever before due to AI implementation and devices like Veeve’s. By targeting consumers with products and promotions that fit their personal shopping behaviors and preferences in real-time, AI helps retailers improve add-to-cart revenue.
There are still opportunities for stores known for their community feel, like Trader Joe’s and locally owned markets, to maintain that same culture while elevating the consumer experience through AI. Rather than potentially avoiding the technology, brands with this kind of reputation instead need to find ways to incorporate AI into their specific store culture. For example, using AI to log customer questions, as mentioned in the article, can help employees reorganize stores to make key items more visible, and can free up employees to deal with more complex customer issues that only humans can handle.
In my opinion, as AI and robots become more common in supermarkets, we can expect better-personalized shopping, efficient stock management, and added convenience for shoppers. AI can help retailers understand what their customers like and offer them personalized suggestions. In addition, robots can assist retailers in handling tasks like checking inventory and price verification.
However, the concern is apparent that too much AI might reduce the social and community aspects of grocery shopping. Human interactions with store associates and fellow shoppers are important for many people. So, striking a balance between AI and preserving a friendly, community-oriented shopping environment will be essential. I believe supermarkets can start using AI with an aim to enhance the shopping experience while keeping the human touch that customers value.