Can AI solve e-grocery’s erratic out-of-stock substitutions?
As out-of-stocks became increasingly common in the early months of the pandemic, Walmart’s personal shoppers turned to artificial intelligence to help find the best substitutes.
“The decision on how to substitute is complex and highly personal to each customer,” said Srini Venkatesan, EVP, Walmart Global Tech, in a blog entry. “If the wrong choice is made, it can negatively impact customer satisfaction and increase costs.”
In the past, personal shoppers would determine the best substitute themselves, but Walmart found nearly 100 different factors can go into that decision. Mr. Venkatesan added, “Trying to account for all of these would not only be too difficult, but it would also be incredibly time consuming.”
The AI technology uses hundreds of variables — including size, type, brand, price, aggregate shopper data, individual customer preference and current inventory — to determine the next best available item. It then preemptively asks the customer to approve the substituted item. Whether the substitute is approved or rejected, the information is fed back into the AI’s algorithms to improve the accuracy of future recommendations. Following the technology’s deployment at Walmart, customer acceptance of substitutions increased to over 95 percent.
It’s unknown the extent to which substitutions are frustrating to consumers. Some customers formed Facebook groups last year, such as “That’s it, I’m Grocery Substitution Shaming” and “Dumb Instacart & Shipt Substitutions,” to lampoon odd replacements.
A survey from late April to early May last year from Retail Feedback Group found 49 percent of online grocery buyers encountering out-of-stocks. Of those, 17 percent were able to purchase acceptable substitutions for all unavailable items, half were able to do so on some and a third found no such substitutions.
One hassle for customers may be the varying methods used by grocers.
A recent review of multiple grocers by the Daily Journal of Kankankee, IL, found that several had apps that allowed personal shoppers to text customers to approve a substitute. One gave shoppers the ability to mark “no substitutions”on their items and another allowed the selection of second and third acceptable choices.
A number of UK-based upstarts including Weezy, Gorillas and Dija are promising speedy deliveries with the help of “no substitutions.”
- How Walmart is Using A.I. To Make Smarter Substitutions in Online Grocery Orders – Walmart
- Walmart enlists artificial intelligence for online grocery substitutions – Supermarket News
- An overview (and review) of grocery delivery – Daily Journal
- Retail Feedback Group Study Finds Surge In Dual Channel Grocery Shopping | Supermarkets Show Strongest Online Grocery Shopper Growth During Pandemic – Retail Feedback Group/PRWeb
- ChaseDesign survey reveals supermarket customers are dissatisfied with BOPIS due to out-of-stocks, product quality/freshness issues, substitutions and wait times – ChaseDesign
- Popular online grocery services often include hilarious substitutions during pandemic – Miami Herald
- ‘I ordered 7 calculators but got 7 pasta bakes’: People share their funniest supermarket substitutions from Tesco, Morrison’s and Asda – MyLondon
DISCUSSION QUESTIONS: Are substitutions a major or minor pain point for e-grocery? Do you think grocers should turn to artificial intelligence or other executional measures to improve the experience?