How AI and automation is changing Grocery
Time to consume: 3 min
25 March 2021
Chief Commercial Officer, Ombori
Your next hire could be an intelligent machine. Robots and artificial intelligence aren’t science fiction any more. They’re the inevitable next step for retailers, even in the grocery sector.
The online world
Grocers are already adapting rapidly to an omnichannel business model. Shoppers are increasingly placing orders online for delivery or pickup instead of coming into the store. This means grocers need to find new ways to promote deals, upsell, and maximize the cart value. AI allows retailers to personalize and fine-tune offers for each individual, based on their shopping history.
Online shoppers also engage with AI when they have questions or concerns. Modern customer service bots have gone way beyond the simple chatbots of a few years ago. They understand speech, and can detect the customer’s emotional state, and they know when they should escalate a problem to a human.
Bricks and mortar
However, AI and automation isn’t just confined to online shopping. It’s coming to physical stores too. The store of the future will use robots to stack shelves and manage inventory. Curbside pickup may well become a completely automated process.
Inside the store, cameras and machine vision, assisted by smart shelves and RFID tags, can track both customers and products. They know what shoppers have placed in their carts, when shelves are running low, or when items have been put on the wrong shelves. Amazon Go has already proved that this can completely replace the traditional checkout process.
Number-crunching is where machines really show their expertise, and they excel at demand planning. When dealing with tens of thousands of SKUs, across hundreds or thousands of stores, it’s not easy to predict exactly what will be required, where, and when. AIs can analyze hundreds of millions of transactions, far faster and more accurately than any human. When circumstances change, the AI can revise its predictions rapidly and recommend immediate actions.
Many grocers are understandably concerned about how AI and automation will affect the staff. Are we talking about replacing people with machines? And how will your customers react? Fortunately, it’s nothing so drastic.
In the book Human + Machine: Reimagining Work in the Age of AI. H. James Wilson and Paul Daugherty studied over 1,500 companies. They showed that the biggest performance improvements came when humans and machines worked together. AIs spot patterns, and humans fix problems. Robots handle routine tasks, while humans bring flair and personality. Wilson and Daugherty found that teams of people working with machine assistance perform two to six times better than either humans or bots working alone.
For example, an AI may spot that a particular product is not selling as well as expected. It notifies managers at the appropriate level - perhaps an individual store manager or a regional manager, depending on the affected area. It can suggest possible causes - anything from signage to pricing to competing products - so that managers can investigate.
In fact, your customers may never even be aware that you’re using AI. Deployed effectively, AI and automation will make your staff more productive and your operations more efficient - just like any other tool at your disposal.