Technology solutions at food retail have proliferated in recent years, and never more so than in the past pandemic-fueled year. Harnessing the power of artificial intelligence, machine learning and data has become a necessity as consumers quickly shift from in-store shopping to e-commerce and simultaneously expect stores to offer a personalized, frictionless experience.
Technology was a big topic of conversation at last week’s virtual FMI Midwinter Executive Conference, with several industry leaders and startup companies discussing what’s working now and what comes next. An important topic underpinning many of the discussions was artificial intelligence.
From machine learning to data mining, AI is proving to be an unstoppable force in food retail. During a session on redefining AI strategy, Milen Mahadevan, president of Kroger-owned data company 84.51°, said advanced AI systems allow companies to connect the dots between what’s happening in the business, why it’s happening and using data gleaned to create actions that help make the customer experience as seamless as possible.
“The pandemic that we’ve all experienced became a strategic imperative for every organization to leverage data, analytics and artificial intelligence to make things better,” Mahadevan said. “Ultimately, almost everything can be improved by leveraging data.”
Here are a few of the tech trends highlighted during the conference, many of which have a firm grounding in the AI and data that Mahadevan described.
Optimizing fresh food
Fresh food has become an important differentiator in the grocery space, and Afresh Technologies CEO Matt Schwartz shared how his company’s technology offers a “fresh first” approach that is tailored to the unique complexities and dynamic nature of the fresh department.
“We think that it’s much more than just throwing artificial intelligence on an existing system that’s built for the center store,” Schwartz said. Processes within Afresh Technologies’ AI-based systems include integrations tailored to fresh data structures, non-reliance on perpetual inventory and dynamic forecasts that can handle the uncertainty of fresh food.
“The AI can guide what data the store workflows need you to get and the store workflows can get data to help drive algorithms to make really good decisions,” Schwartz explained. “All of that can come together in a human-centered way that enables massive adoption at scale to various workflows.” The benefits are immense, Schwartz said, and include employee satisfaction from working with a tool that’s the perfect fit for the job, increasing profitability by decreasing shrink, boosting top-line sales and giving customers consistently fresh, in-stock food options.
Joe Smirlies, head of product at technology provider Invatron, also touched on differentiation through fresh food and the need to optimize fresh operations through better understanding of demand. According to Smirlies, a strong fresh intelligent forecast must be uniquely developed and should be sensitive, dynamic and focused in order for retailers to strike the correct balance between shrink and maximizing sales.
“What we’ve learned is that doing fresh right is often a coordinated effort across the many pillars of a grocery organization,” Smirlies said. “Merchants need to be creative and figure out how to attract customers with fresh. We also know that data needs to flow throughout the organization seamlessly and [record] not only what worked, but also what didn’t work, and then learn from that and leverage it for continuous improvement.”
The future of voice
Another piece of AI-based technology making in-roads at food retail is voice assistance. The voice interface is becoming more and more important as the trend toward digital shopping continues to gain steam, said Jon Stine, executive director of Open Voice Network, during a session on the topic. Stine shared that more than 60% of US adults are active voice users, and since the technology offers a hands-free and germ-free experience for shoppers, it is becoming extremely important for brands to make voice part of their digital strategy.
While voice hasn’t yet picked up as much steam in the US as it has in other parts of the world, it’s expected to soon. In fact, 50% of parents in the UK use voice to make purchases, 53% of young parents are using it to buy food, and 70% of voice users are searching for information about specific products and their availability. “This is a trend that is on its way,” Stine said, while also explaining that voice will likely have a huge impact on everything from customer service in call centers to home replenishment of groceries.
Doug Rogers, chief security officer at Wegmans, said his company utilizes voice as part of its overall digital strategy to create an experience online that mimics the experience customers would have in-store. “Voice control is not a fad. In a very short period of time, we’re going to find that it’s going to be the number one way our customers want to interact with our organization,” Rogers said. “I know everybody is busy, everybody has hundreds of different things to do and different priorities, but really all it takes is one hour a week to give it a try.”
Additionally, Stine explained that voice can be a strong tool for humanizing and personifying your brand. “Is your brand a woman? A man? Is it cute? Is it wise and comforting? Is it inspirational? Is it reassuring?” Stine asked. “This is a lasting impression. You’ll be creating almost a human-like relationship between your brand’s voice and your customers.”
Automation was another hot-button topic during the conference, with today’s supermarkets automating everything from e-commerce order picking to data exchange among partners — all in an effort to increase both efficiency and profitability. Shelf Engine, for example, is using AI-based forecasting to automate product orders.
According to co-founder Stefan Kalb, Shelf Engine’s technology can help grocers strike a balance between minimizing shrink and maximizing sales while simultaneously freeing up employees to focus on other store activities. “We completely automate the order, which means that your team never reviews anything,” Kalb explained. “We are completely integrated with your system, your data comes through, we forecast the ideal order and go straight to the vendor.”
Are Traasdahl, founder and CEO of data platform Crisp, discussed the ever-increasing need for enhanced data cooperation among trading partners, explaining that “the pandemic has highlighted what many of us have known, that significantly better collaboration is needed throughout the supply chain.”
With the pandemic influencing how organizations work, causing an increased focus on e-commerce and greatly affecting inventory and supply chain issues, using tech platforms to automate data and help the important flow of information can make it easier for all partners to do their jobs effectively.
Taking automation one step further is Simbe Robotics, maker of the grocery robot Tally. CEO Brad Bogolea explained how robots can help boost shelf intelligence by capturing information at a higher frequency, higher fidelity and lower cost. Robots can offer targeted restocking information to store teams and third parties, evaluate the state of store planograms, and ensure price tags are correctly placed, all in support of improving overall in-store execution.
Digital consumer engagement
Engaging with customers has changed dramatically in recent years as online shopping frequency has increased, and retailers should be doing everything they can to develop relationships with digital consumers and personalize the shopping experience. As Bruce Richards, industry strategy lead at Adobe, explained, personalization at scale is about using data to manage that customer experience.
Adobe found that 60% of consumers don’t feel they see themselves on the brand websites they engage with and 40% prefer to shop brands that offer personalized experiences, making a digital personalization strategy even more imperative. Brands should focus on digitally recreating in-store experiences such as checkout line impulse purchases, Richards said, and also consider data co-ops between retailers and CPG brands to help create the seamless experience consumers crave.
When it comes to engaging with customers post-purchase, Tomas Diaz of flexEngage believes a personalized digital receipt is a viable solution. Diaz’s company creates dynamic digital receipts that include banner ads, product images, social media links, sweepstakes information and an opportunity for direct customer feedback.
“The cool thing about a digital receipt is it can be personalized depending on who the customer is, based on what’s in the basket or what they might be likely to buy in the future,” Diaz said.
Yet another avenue for digital customer engagement, according to Birdzi CEO Shekar Raman, is through personalized health and wellness tools. As people are looking to navigate a store in ways that are specific to their dietary needs, Birdzi offers a solution that combines technology, AI and big data to provide a simple and productive shopping experience for people seeking out individualized nutrition solutions.
“I believe supermarkets today are in a unique position to be the center for wellness in the community by enabling healthier options for shoppers who are starting to cook more and more at home and [become] more aware of what they’re buying in the store,” Raman said.
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