Hand holding a phone with the words "Grocery online with AI" and "Order" on the front
Photo: Canva

Instacart announced a series of AI-driven upgrades to its websites, apps, and smart carts that promise to help grocery shoppers with education, discovery, and checkout.

On websites, conversational search arrives for the Instacart Storefront platform, which powers e-commerce storefronts for more than 550 retail brands, including Costco and Price Chopper. Customers can ask open-ended questions such as “What do I need to make fish tacos?” or “What’s a nutritious lunch for my kids?” directly in the search bar on retailers’ storefronts.

In the press release, Instacart stated, “Instacart processes millions of search queries a day – and hundreds per second during peak time – and this capability uses OpenAI’s ChatGPT models alongside Instacart’s own product data and AI models.”

On Instacart Storefront-powered apps, a new “In-Store” mode “turns retailers’ apps into companions when customers shop in stores.” With In-Store mode, customers can see what’s in stock, view details about items on their shopping list (including nutrition information and EBT SNAP eligibility), sort items by aisle, get product recommendations, and access promotions and discounts in the store. Retailers gain insights into online and in-store behavior.

Instacart’s Caper Carts, AI-powered smart carts that automatically identify items and provide seamless checkouts from anywhere in the store, now allow customers to order made-to-order items, such as deli sandwiches, from the carts. They also enable retailers to offer in-store rewards to cart users for completing actions like logging into a loyalty account, adding certain items to the cart, or trying a cart.

Asha Sharma, Instacart’s COO, said, “We’ve long believed the future of grocery – and commerce in general – isn’t online or in-store, it’s both. And now, more than ever, it’s being supercharged with AI.”

One AI enthusiast is Kroger’s CEO, Rodney McMullen, who said on a June quarterly call, “By applying our data and AI-based personalization, we can better understand what truly matters to our customers and deliver more targeted and effective experiences.”

A recent joint report, “The Impact of AI in Grocery” from Grocery Doppio in partnership with FMI, The Food Industry Association and Wynshop, found that 69% of grocery sales in 2023 so far were digitally influenced (i.e., discovery, inspiration, order, pickup, wayfinding, and coupons), and 73% of grocery technology executives expect AI capabilities to be embedded in most or all of their technology software by 2025.

Still, only 28% expressed confidence in effectively using AI by 2025. Challenges cited include budget availability (71%), unclear ROI (69%), and subpar data or tools (63%).

BrainTrust

“When you think about it, Instacart’s AI upgrades are a wake-up call for grocers. AI isn’t just a nice-to-have, it’s a must-have.”

Ken Morris

Managing Partner Cambridge Retail Advisors


“Though Instacart’s announcement certainly highlights new, AI-powered features for its users, AI is already being used to enhance the grocery shopping experience in other ways.”

Roland Gossage

CEO, GroupBy


“AI going forward will become the new ante for all competitors. The ongoing challenge will be to link retailers’ AI initiatives with those of its manufacturers.”

Richard J. George, Ph.D.

Professor of Food Marketing, Haub School of Business, Saint Joseph’s University

Discussion Questions

In what ways will artificial intelligence likely reimagine the grocery shopping experience? Which of Instacart’s upgrades do you see as most beneficial to grocery shoppers and grocers?

Poll

Of Instacart’s AI upgrades, which will be most beneficial to grocery shoppers?

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14 responses to “Is Instacart Showing How AI Will Transform the Grocery Experience?”

  1. Neil Saunders Avatar
    Neil Saunders

    Instacart’s use of AI enhances the online shopper experience and ultimately drives buying. For example, people can ask what ingredients are needed for certain recipes or what kind of products are healthy. This open-ended conversation is sometimes more useful than conventional search, especially as it helps customers navigate through the extensive number of options available. In stores, AI-enabled carts will do a similar job but also provide shoppers with more information on products. While these things are useful, not everyone will want or need them. Much food shopping is habitual and regular and doesn’t necessitate open conversations with either AI or humans. So, while I think this is a good addition and a smart use of tech, it’s not necessarily the future for all of grocery shopping. 

  2. Bob Amster Avatar
    Bob Amster

    Again, as in other discussions, I believe that the inclusion or insertion of AI into the Instacart shopping experience, will not necessarily increase sales of groceries but it will improve the customer shopping experience and will shift the same sales from those retailers that do not offer a smarter, easier shopping experience to the retailers that implement AI effectively. The industry can only sell so many white truffles.

  3. Ken Morris Avatar
    Ken Morris

    I have melded for you, Dave: I believe AI will transform the customer experience in grocery, with conversational search and in-stock position being the initial key features. Of course, a realtime inventory system must be in place for this to work. The substitution that happens today is my particular pet peeve, so this in-store view would likely make me very happy.

    When you think about it, Instacart’s AI upgrades are a wake-up call for grocers. AI isn’t just a nice-to-have, it’s a must-have. By the way, this isn’t just about online or in-store anymore, it’s about both, plus the supply chain and the executive suite and, well, everything.

    While challenges like budget constraints and unclear ROI might exist, they’re not deal-breakers. AI is no longer a nice-to-have, it’s already table stakes. It’s already time to start developing an AI strategy, and make sure it fits and supports your existing brand and operations. I guess I’m calling this “controlled disruption” for now, but I’m sure ChatGPT will think of a better term for that soon!

  4. Brandon Rael Avatar
    Brandon Rael

    Aside from buying your weekly essential items, part of the grocery shopping experience is the inspiration to try new foods, experimenting with new recipes, and the art of discovery. With Instacart’s integration of AI capabilities, they will help to enhance the grocery shopping experience with personalized recommendations, helping to find key ingredients for more holistic/healthy choices and drive the conversion rates higher on select items.

    However, most grocery customer journeys are routinized and built around the essential items that each household needs weekly. There is a crucial dependency on real-time inventory availability and a robust data and analytics engine for generative AI solutions to be successfully integrated with the front-end UX mobile capabilities. This will ensure that the personalized recommendations are tied to what is truly available at the store level to avoid unnecessary friction and dissatisfaction.

    Without integrating the promise of what generative AI offers with the back-end supply chain and order management systems, the execution will fall flat without any added benefits and value to both grocery operations and consumers.

  5. Melissa Minkow Avatar
    Melissa Minkow

    Grocery is a category where apps/tech in stores especially makes sense to elevate the shopping experience. When consumers are buying for recipes, suggestions are especially useful. Since I really don’t see US consumers solely buying groceries online, the convergence of online and offline in grocery makes a lot more sense.

  6. Ananda Chakravarty Avatar
    Ananda Chakravarty

    The amazing thing about AI is that it will become invisible to users. The AI will be embedded in the apps, in the back office, in the integrated tech solutions behind the scenes. What will change is how easy it suddenly is to find the product you’re looking for or to automatically switch into store mode from parking lot mode where the app knows where you are, what you want, and which products are something that will be compatible with your family for your next meal. You’ll be texting to your assistant who will point out the aisle your cereal is in, whether it fits your budget, and which brand has a special deal on it this week. Matter of fact, as you put it in the cart, it will tally your costs and skip most of the checkout. Instacart understands this new vision of shopping and is putting in place the tools to make it real- and they’re pretty close already.

  7. Gary Sankary Avatar
    Gary Sankary

    While AI will add tons of value for shoppers, I don’t think Instacart will be the platform that most shoppers turn to to realize this value. As we saw this week, Instacart is losing market share. As grocers and big box stores enable this capability, I suspect consumers will continue to go directly to the store they like for their shopping, bypassing the third party, last-mile providers.

  8. Richard J. George, Ph.D. Avatar
    Richard J. George, Ph.D.

    Instacart is underscoring the concept that Omni channel is not about channels but about customers. AI is one more tool for customers, not all customers, to enhance their shopping experiences. AI going forward will become the new ante for all competitors. The ongoing challenge will be to link retailers’ AI initiatives with those of its manufacturers.

  9. Doug Garnett Avatar
    Doug Garnett

    I’m quite skeptical of this effort as tech is too often believed valuable only to turn out to be yet one more “meh” feature cluttering user interfaces. We also must not get carried away should this small minority of shoppers find one feature or another helpful. We must remember it’s a selectively small group using the software and should expect they will fall for features the mass market won’t find valuable.

  10. Paula Rosenblum Avatar
    Paula Rosenblum

    I don’t see how AI is going to improve a) inventory accuracy or b) produce quality. I’ve grown used to the app and choosing my replacements (why can’t AI do that part, by the way?) but the other issues are real. I have to sit by my computer to tell the shopper what I want “instead of.”

    I don’t know how Instacart can fix that, but it has to be fixed. It would also help if the Instacart shopper actually spoke my language. I have asked before.

    technology still isn’t a magic bullet. Sorry

  11. Craig Sundstrom Avatar
    Craig Sundstrom

    A cynic might say something like “two overhyped concepts meet in a bar” (OK, it’s a smart*** cynic ). Ultimately, tho, the wag may be onto something: if you believe online grocery has some sort of natural cap, and it’s never going to be more than a fraction of the total – vague terms like “digitally influenced” notwithstanding – then this probably doesn’t excite you much. It’s not “reimagining”, it’ moving the needle up to “not quite as small (a share)”. Maybe.

  12. James Tenser Avatar
    James Tenser

    We hear the term “AI” so often these days that it feels like background noise to me.
    But when human intelligence applies AI to power genuine shopper benefits, this gets my attention.
    Instacart’s concept of “In-Store” mode holds interesting promise in this regard. Shoppers who already use their retailer’s app to find digital deals and plan trips deserve that kind of seamless follow-through while in the building.
    While the jury is still out (for me) with regard to AI-powered “smart” shopping carts, it is starting to seem natural for shoppers to use their own devices.
    Interesting parallel here with the advent of self-service grocery shopping. A century ago it seemed like a radical behavior change for folks to pick their own items from the shelves. It became the prevailing norm, of course. I’d submit that today we are watching shoppers radically change their store behaviors again, by using their smart phones to access information and guide their in-store journeys.

  13. Roland Gossage Avatar
    Roland Gossage

    Though Instacart’s announcement certainly highlights new, AI-powered features for its users, AI is already being used to enhance the grocery shopping experience in other ways, specifically when it comes to product discovery. Some early applications we’ve already seen are “shop the recipe” and “other customers also bought” add-to-cart recommendations as well as product recommendations based on past purchasing behavior.

    Instacart’s new conversational search feature is one that customers are likely to find especially beneficial, as more and more consumers are looking to interact with search platforms using natural language queries such as these open-ended questions. The new in-store mode will also be a likely standout as customers are increasingly using their phones in-store for a blend of mobile and in-person shopping. These upgrades will help Instacart further personalize the customer shopping experience to make sure customers find the right product to fit their needs.

  14. Trevor Sumner Avatar
    Trevor Sumner

    AI will transform grocery, but these slightly better conversational interfaces barely touch the surface. The largest transformation will be in supply chain and predictive analytics and in retail media networks, where AI will vastly increase the value of the customer to brands. Ironically, this means that AI won’t transform the in-store experience as much as we would like, until the mobile phone or AR glasses are more incorporated as a digital tool inherent to the physical shopping process.

14 Comments
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Neil Saunders
Neil Saunders
Noble Member
7 days ago

Instacart’s use of AI enhances the online shopper experience and ultimately drives buying. For example, people can ask what ingredients are needed for certain recipes or what kind of products are healthy. This open-ended conversation is sometimes more useful than conventional search, especially as it helps customers navigate through the extensive number of options available. In stores, AI-enabled carts will do a similar job but also provide shoppers with more information on products. While these things are useful, not everyone will want or need them. Much food shopping is habitual and regular and doesn’t necessitate open conversations with either AI or humans. So, while I think this is a good addition and a smart use of tech, it’s not necessarily the future for all of grocery shopping. 

3
Bob Amster
Bob Amster
Active Member
7 days ago

Again, as in other discussions, I believe that the inclusion or insertion of AI into the Instacart shopping experience, will not necessarily increase sales of groceries but it will improve the customer shopping experience and will shift the same sales from those retailers that do not offer a smarter, easier shopping experience to the retailers that implement AI effectively. The industry can only sell so many white truffles.

0
Ken Morris
Ken Morris
Active Member
7 days ago

I have melded for you, Dave: I believe AI will transform the customer experience in grocery, with conversational search and in-stock position being the initial key features. Of course, a realtime inventory system must be in place for this to work. The substitution that happens today is my particular pet peeve, so this in-store view would likely make me very happy.

When you think about it, Instacart’s AI upgrades are a wake-up call for grocers. AI isn’t just a nice-to-have, it’s a must-have. By the way, this isn’t just about online or in-store anymore, it’s about both, plus the supply chain and the executive suite and, well, everything.

While challenges like budget constraints and unclear ROI might exist, they’re not deal-breakers. AI is no longer a nice-to-have, it’s already table stakes. It’s already time to start developing an AI strategy, and make sure it fits and supports your existing brand and operations. I guess I’m calling this “controlled disruption” for now, but I’m sure ChatGPT will think of a better term for that soon!

0
Brandon Rael
Brandon Rael
Active Member
7 days ago

Aside from buying your weekly essential items, part of the grocery shopping experience is the inspiration to try new foods, experimenting with new recipes, and the art of discovery. With Instacart’s integration of AI capabilities, they will help to enhance the grocery shopping experience with personalized recommendations, helping to find key ingredients for more holistic/healthy choices and drive the conversion rates higher on select items.

However, most grocery customer journeys are routinized and built around the essential items that each household needs weekly. There is a crucial dependency on real-time inventory availability and a robust data and analytics engine for generative AI solutions to be successfully integrated with the front-end UX mobile capabilities. This will ensure that the personalized recommendations are tied to what is truly available at the store level to avoid unnecessary friction and dissatisfaction.

Without integrating the promise of what generative AI offers with the back-end supply chain and order management systems, the execution will fall flat without any added benefits and value to both grocery operations and consumers.

0
Melissa Minkow
Melissa Minkow
Member
7 days ago

Grocery is a category where apps/tech in stores especially makes sense to elevate the shopping experience. When consumers are buying for recipes, suggestions are especially useful. Since I really don’t see US consumers solely buying groceries online, the convergence of online and offline in grocery makes a lot more sense.

0
Ananda Chakravarty
Ananda Chakravarty
Member
7 days ago

The amazing thing about AI is that it will become invisible to users. The AI will be embedded in the apps, in the back office, in the integrated tech solutions behind the scenes. What will change is how easy it suddenly is to find the product you’re looking for or to automatically switch into store mode from parking lot mode where the app knows where you are, what you want, and which products are something that will be compatible with your family for your next meal. You’ll be texting to your assistant who will point out the aisle your cereal is in, whether it fits your budget, and which brand has a special deal on it this week. Matter of fact, as you put it in the cart, it will tally your costs and skip most of the checkout. Instacart understands this new vision of shopping and is putting in place the tools to make it real- and they’re pretty close already.

1
Gary Sankary
Gary Sankary
Active Member
7 days ago

While AI will add tons of value for shoppers, I don’t think Instacart will be the platform that most shoppers turn to to realize this value. As we saw this week, Instacart is losing market share. As grocers and big box stores enable this capability, I suspect consumers will continue to go directly to the store they like for their shopping, bypassing the third party, last-mile providers.

1
Richard J. George, Ph.D.
Richard J. George, Ph.D.
Member
7 days ago

Instacart is underscoring the concept that Omni channel is not about channels but about customers. AI is one more tool for customers, not all customers, to enhance their shopping experiences. AI going forward will become the new ante for all competitors. The ongoing challenge will be to link retailers’ AI initiatives with those of its manufacturers.

0
Doug Garnett
Doug Garnett
Member
7 days ago

I’m quite skeptical of this effort as tech is too often believed valuable only to turn out to be yet one more “meh” feature cluttering user interfaces. We also must not get carried away should this small minority of shoppers find one feature or another helpful. We must remember it’s a selectively small group using the software and should expect they will fall for features the mass market won’t find valuable.

1
Paula Rosenblum
Paula Rosenblum
Active Member
7 days ago

I don’t see how AI is going to improve a) inventory accuracy or b) produce quality. I’ve grown used to the app and choosing my replacements (why can’t AI do that part, by the way?) but the other issues are real. I have to sit by my computer to tell the shopper what I want “instead of.”

I don’t know how Instacart can fix that, but it has to be fixed. It would also help if the Instacart shopper actually spoke my language. I have asked before.

technology still isn’t a magic bullet. Sorry

1
Craig Sundstrom
Craig Sundstrom
Active Member
7 days ago

A cynic might say something like “two overhyped concepts meet in a bar” (OK, it’s a smart*** cynic ). Ultimately, tho, the wag may be onto something: if you believe online grocery has some sort of natural cap, and it’s never going to be more than a fraction of the total – vague terms like “digitally influenced” notwithstanding – then this probably doesn’t excite you much. It’s not “reimagining”, it’ moving the needle up to “not quite as small (a share)”. Maybe.

0
James Tenser
James Tenser
Member
7 days ago

We hear the term “AI” so often these days that it feels like background noise to me.
But when human intelligence applies AI to power genuine shopper benefits, this gets my attention.
Instacart’s concept of “In-Store” mode holds interesting promise in this regard. Shoppers who already use their retailer’s app to find digital deals and plan trips deserve that kind of seamless follow-through while in the building.
While the jury is still out (for me) with regard to AI-powered “smart” shopping carts, it is starting to seem natural for shoppers to use their own devices.
Interesting parallel here with the advent of self-service grocery shopping. A century ago it seemed like a radical behavior change for folks to pick their own items from the shelves. It became the prevailing norm, of course. I’d submit that today we are watching shoppers radically change their store behaviors again, by using their smart phones to access information and guide their in-store journeys.

0
Roland Gossage
Roland Gossage
Member
7 days ago

Though Instacart’s announcement certainly highlights new, AI-powered features for its users, AI is already being used to enhance the grocery shopping experience in other ways, specifically when it comes to product discovery. Some early applications we’ve already seen are “shop the recipe” and “other customers also bought” add-to-cart recommendations as well as product recommendations based on past purchasing behavior.

Instacart’s new conversational search feature is one that customers are likely to find especially beneficial, as more and more consumers are looking to interact with search platforms using natural language queries such as these open-ended questions. The new in-store mode will also be a likely standout as customers are increasingly using their phones in-store for a blend of mobile and in-person shopping. These upgrades will help Instacart further personalize the customer shopping experience to make sure customers find the right product to fit their needs.

0
Trevor Sumner
Trevor Sumner
Member
7 days ago

AI will transform grocery, but these slightly better conversational interfaces barely touch the surface. The largest transformation will be in supply chain and predictive analytics and in retail media networks, where AI will vastly increase the value of the customer to brands. Ironically, this means that AI won’t transform the in-store experience as much as we would like, until the mobile phone or AR glasses are more incorporated as a digital tool inherent to the physical shopping process.

0