SPECIAL REPORT: How Automation Is Changing the Grocery Game
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The ever-present hum in today’s food retail ecosystem tends to revolve around solving problems and pain points with the latest technology. In fact, technology and automation solutions ranging from artificial intelligence (AI) and machine learning to programs like ChatGPT are taking hold at nearly every level of the food production and sales cycle, making it essential to success in grocery both today and in the future.
While insights firm Incisiv and digital commerce and fulfillment provider Wynshop have found that grocers recognize that AI is coming, they’re scaling at different levels to deploy it in their operations. According to their research, 83% of grocers discussed the specific AI tool of ChatGPT at senior-level meetings in May, compared with the 67% of them who talked about it in February. A similar 82% said that AI is necessary to remain competitive for the future.
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Fresh Retail Automation and Predictive Ordering
Earlier this year, Albertsons Cos. and San Francisco-based Afresh Technologies completed the enterprise rollout of Afresh’s predictive ordering and inventory management platform at nearly all of the grocer’s banner stores across the United States. The AI-driven system enables the stores to reduce food waste and achieve superior freshness through smarter forecasting, inventory management and store operations, giving department managers easy-to-use ordering tools that leverage real-time insights.
Suzanne Long, chief sustainability and transformation officer at Boise, Idaho-based Albertsons, explained to Progressive Grocer in a recent episode of the Top Women In Grocery Podcast that ordering had traditionally been based on the experience of those working in individual stores. Using technology like Afresh, however, has enabled the company to write orders based on location, sales, inventory, seasonality, historical data, and more, saving both associate time and potential food waste.
“We can choose to do really incredible things with food waste once it’s been created, but the first thing we want to do is minimize it to begin with,” Long explained. “Afresh has been a big part of that. And it’s also a reminder that the same things that help us reduce shrink and improve gross margin in our business are also the very things that actually help us improve our sustainability.”
Predictive ordering is also something that Walmart-owned Sam’s Club has been using to right-size its fresh operations.
“In our clubs, we do a lot of fresh production. Traditionally, a very difficult question to answer has been, at the club item level, how much should I make of this today?” explains Tim Simmons, SVP and chief product officer at Bentonville, Ark.-based Sam’s Club. “In the past, we relied on spreadsheets and binders and things that were highly inaccurate in their predictive capabilities.”
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Continues Simmons: “Now we have AI and machine learning, and we’ve built an app that guides an associate through a production plan all based on an algorithm. We’ve seen how that can transform our business in terms of accuracy, simplifying the work of our associates and even creating a better member experience.”
The Promise of Generative AI
Generative AI and ChatGPT have made huge inroads across the business spectrum over the past year, and they’re poised to flow even deeper into the basic functions of grocery retail. San Francisco-based Instacart, for example, counts itself among the first companies to build a plug-in for the AI chatbot developed by OpenAI and asserts that AI and machine-learning innovation lies at the core of everything it does.
Instacart is currently using generative AI internally to make it easier for its employees to find information, run analyses and parse insights, while also using the technology to build new product experiences that better serve its customers, advertisers, retailer partners and shoppers.
“We’ve long used machine learning to power our service, and our vision is to bring this AI-first posture to everything we do, harnessing these technologies to further improve our products and operations,” writes Anahita Tafvizi, VP and head of data science, strategy and business operations, in a company blog post. “The specific tools may change, but our commitment to leveraging AI to better serve customers and shoppers remains constant.”
Sam’s Club is also looking to harness the power of generative AI and computer vision in an effort to do business more effectively.
“With generative AI and computer vision, we are testing that everywhere,” explains Simmons. “We’re learning a lot, we’re seeing the productivity it can bring, and I do think it’s going to continue to be disruptive in terms of how it changes jobs, how it changes the way we work, the efficiencies it’ll drive, but also making the experience better. It’s definitely changing the way we do business.”
Associate Onboarding and Training
Another important piece of the grocery operations puzzle that automation is now helping to solve is that of associate hiring and onboarding. Tokyo-based managed services provider Ricoh has introduced an automated solution that helps grocers intelligently move through the administrative tasks of finding and selecting job candidates, as well as training them once they’re hired.
In fact, Ricoh found that document management and automation solutions like its own could reduce onboarding for employees by 400%, from two weeks to two days. Carl Rysdon, VP for the retail industry at Ricoh, believes that the ability to automate administrative and other processes is table stakes for today’s food retailers.
“I think we all realize there’s less employees in stores today and customer service is at risk as a result,” notes Rysdon. “The retailers that are going to do really well are the ones that get all of the administrative tasks off the table so they can help their front-line employees do their best.”
