Grocery remains one of the lowest hanging and major retail opportunity ripe for disruption by artificial intelligence.
Grocery retailers generate a sheer volume of data than other retail categories. Whether it be online channels, or in-store points of sale, the data generated through the several hundreds of SKUs and millions of transactions is huge.
Much more than before, grocery retailers have the power to use Artificial Intelligence to harness big data to get their business decision making right, and thereby pricing, promotions and inventory right.
Artificial Intelligence can help grocers learn from consumer behaviour, and adapting better to their needs. By quickly and accurately mapping customer orders, AI can help ensure that a business runs smoothly across sales, order logistics, and order fulfilment.
By leveraging Artificial Intelligence, grocery stores can better understand their customers, giving them more of what they need, ensuring a better experience each time.
Here are some of the use cases for AI in grocery:
Stock Replenishment
When big data available with retailers is combined with Artificial Intelligence, stock replenishment is much more accurate and better optimized to customer demand. Across several different product categories and several stores, AI-based forecasting solutions can automate stocking decisions.
By deploying Machine Learning, supply-chain constraints such as supplier delivery times and minimum or maximum order quantities, can be better addressed. Grocers would be able to take into consideration supply chain issues, and order proposals could be tailored to reduce waste and maximize product availability.
In order to achieve such automation, grocers will have to bridge gaps between disparate software systems from ERP to POS, cutting across store, warehouse and the in-between logistics.
Artificial intelligence can enable grocery store owners save on labor, and gain a more precise view of what SKUs build interest in which type of customers on specific days and at specific hours. This will help shorten the checkout time for consumers. For retailers, this will mean they can manage stock with greater agility and reduced costs, enabling them to grow their business.
Pushing Better Promotions
Artificial Intelligence is able to automatically simulate the outcome of many million choices, far beyond the human capabilities. AI enables in better promotional assortments maximizing sales and gross margin.
Artificial Intelligence can help bring the right mix of produce on the shelves, based on customer needs, and ensure sustainable alignment of supply chain.
By building on the consumer data available with grocers, and overlaying contextual data, including weather, holidays and weekends, Artificial Intelligence can, as such, provide a more accurate forecast than humans.
Improving Pricing Decisions
Artificial intelligence is being used to improve and optimize decision-making around pricing by mining sales and user data, identifying patterns and capitalizing on buyer preferences.
Reducing wastage of produce and perishables
Retail Supermarkets in the US lose an average of around US$3,000 daily due to food wastage, resulting in an annual loss of around US$58Bn for US grocers alone.
With Artificial Intelligence capabilities, grocers can manage their stock levels of produce and perishables, thereby reducing wastage. By Artificial Intelligence, grocery stores could automatically re-adjust orders as per customer demand, as well as automate product promotions of slow-moving products. This will drastically reduce food wastage, while enabling grocers to protect their margins.
In Conclusion
To leverage Artificial Intelligence, grocers would have to overcome legacy software issues behind. They would have to embrace networked software that promotes connectivity and inventory visibility beyond the enterprise and into the extended supply chain.
Artificial Intelligence will help grocery stores to better serve customers, and will result in improved customer service. It will enable customer loyalty to be rewarded, by better understanding customer behaviour, and thereby maximizing revenue.