New AI Technology Ready to Aid Independent Grocers

Artificial intelligence (AI) is revolutionizing the retail sector with groundbreaking advancements, enhancing operational efficiency, customer satisfaction, and inventory management. It's a major industry buzzword, yet AI has been integrated into numerous retail software solutions for years — so why is it such a focal point in 2024?

"The new news on AI is the natural language interface," IGA CEO John Ross explained. "It's the democratization of data. That's what these natural language learning algorithms do: you give it access to a huge chunk of data, ask it a question, and get an answer right away without running a report, installing a module, etc."

While some grocers already have the aforementioned AI-driven software and programs for inventory management and customer satisfaction, most programs require the store team to run reports and analyze the data. It's helpful information, but yet another task of many, Ross said. 

"With this new AI, a retailer can be standing on the store floor and ask, 'What percentage of my dry goods inventory hasn't sold one SKU in the last 30 days?' And they'll get an answer without running a report, installing a module, etc. The retailer can have a dialogue with their data in natural language that makes it accessible for them, their department manager, stock person, etc."

This development makes the technology highly desirable for all retailers, but often newer technology is out of reach for independents due to cost or scalability. Thankfully, IGA Red Oval Partner BRdata has created a solution in reach for independents, BRdata President John Abbene said.

"Independent grocers are leveraging groundbreaking AI to gain fast, efficient insights into sales, profits, inventory, shrink, baskets, trends, customer behavior, and emerging opportunities," Abbene said.

Natural Language, Real-Time Analysis

BRdata's new cloud app Ask Ada gives decision-makers the ability to ask a limitless number of questions and receive detailed answers in seconds.

For example, retailers can ask:

• What was the total bakery sales last month?
• What are the top 10 items in deli for last week?
• Show me the top 10 meat items in our Melville store last month.
• What are the top five categories in my Los Angeles store?
• What is my average basket size over the last seven days?
• Which stores have an average basket size trending upward?
• What categories are trending upward?
• Which store has the most open department rings?
• What were the top 10 shrink items last week?
• What items had more shrink than sales last month?
• What was my best selling dairy item on Saturday?
• Show me any items with less than a 3% gross margin the packaged meat department.

"Through Ask Ada, AI is transforming grocery business intelligence and driving smarter, faster decision-making in your organization," Abbene said.

This kind of analysis removes the need to decipher typical rigid reports, Ross said. 

"It's a massive liberation of your data, because it allows us to have dialogue with our data in real time with far more valuable takeaways," Ross added.

Bob Rybick, President and CEO of Geissler's Supermarkets in Connecticut and Massachusetts, agrees. 

"I use the BRdata Cloud App regularly to track store and department levels sales through the dashboard, but when I want a more detailed question answered remembering the right report or view can be a struggle," Rybick explained. "The new Ask Ada feature allows me to get a succinct answer simply by asking a question. It couldn’t be easier to get the insight I need in the moment.”

While the natural language interface is a key development in AI in the grocery industry today, AI has been generating benefits in other ways that are being used more frequently in grocery. It certainly isn't a fad. According to a recent survey, 63% of consumers believe that AI will be able to solve complex problems in the future. These solutions could address a range of challenges in the retail sector, working to improve the overall customer experience, including:

Forecast Consumer Demand

This is vital for inventory planning and could help avoid lost sales due to product shortages as well as wasted resources due to overstocking. AI, through machine learning and predictive analytics, can help analyze past and current shopping patterns, enabling more accurate forecasting of future demand.

Personalize the Customer Experience

Today's consumers anticipate tailored shopping experiences, which can be difficult for independent grocers to achieve on a broad scale without technological assistance. 

"Using AI to drill down customer data can make commonalities and patterns across customers more visible," SpartanNash Web Services Lead Elise Kunkel said on a panel at The NGA Show in Las Vegas, Nevada.

Store marketing teams can use these patterns to personalize the shopping experience, creating distinct user journeys for each customer, like communicating relevant offers to each shopper demographic. 

And of course, AI can make the online shopping experience better. AI-driven virtual assistants in online platforms are revolutionizing customer service, providing quick and accurate assistance, as seen with IGA Red Oval Partner Instacart’s ‘Ask Instacart’ feature. The feature allows customers to ask grocery shopping questions, like "What's for dinner?" saving them time, inspiring their routine, and helping them make food-related decisions by offering personalized recommendations.

Improve Operational Efficiency & Sustainability

When AI automates routine tasks, employees become free to focus on more complex, customer-oriented responsibilities. 

For example, IGA Red Oval Partner Empower Fresh is already using AI to streamline operations in the produce department, which allows the manager to spend more time on the floor merchandising, visiting with customers, and building relationships while the software delivers better inventory turnover and less waste and spoiled products.

And with 30-40% of the U.S. food supply wasted, these AI-driven technologies are needed to significantly reduce that waste. In a pilot program sponsored by the World Wildlife Fund, Pacific Coast Food Waste Commitment, Afresh, and Shelf Engine, using AI purchasing systems in two grocery retail chains reduced food waste by nearly 15% per store on average. 

Optimize Pricing

AI can also help with pricing recommendations.

"We have retailers that are now feeding their past sales data, their current sales data, their pricing, and their competitors' pricing into AI models and using it to give recommendations for what they do next year, and year-over-year with their pricing," said IGA Red Oval Partner and Webstop CEO Shawn Tuckett.

This approach allows independent grocers to make informed adjustments to their pricing strategies, ensuring they remain competitive and responsive to market trends.

Much like previous technological innovations, AI in supermarkets marks a transformative shift. While challenges exist, the potential for efficiency, customer satisfaction, and innovative solutions is nearly unlimited. By embracing AI, independent grocers can navigate the complexities of modern retail, ensuring a sustainable and prosperous future in an AI-driven era.

"The best thing you can do is to get educated and realize that this is not something that you're so far behind on that you can't catch up," Tuckett said.