Thanks to the continued enthusiasm for e-commerce, various delivery types, flexible time slots, and personalized deals, grocers, large and small, are turning to AI to help manage the minefield. North American customer preference for online and delivery increased by 50% in 2021 from the previous year. Customers want the ability to shop from mobile devices and in-store, interchanging between them seamlessly.
Today, mobile apps enable customers to check what’s available from home; review prices, deals, and delivery options; and decide whether to redeem discounts online or in-store. But as customer flexibility rises, modifiable parameters for retailers shrink.
Rather than lose customers or impact their experience, AI can help grocers fine-tune their processes and provide real-time data to act efficiently and cost-effectively.
1. Fill Up Virtual Carts With One-Click Choices
Online shopping carts are filling up across the nation. Yet, 75% of the average store’s carts are abandoned. Today, customers expect to change their delivery window, add items after checkout, receive product recommendations, and review product ratings. That’s where AI comes in.
Grocers are falling short in trying to increase what goes into shoppers’ virtual carts: Just 58% of food retailers recommend additional products in the cart before checkout. “Save for later” options enable customers to quickly return to previously considered products, simply re-adding them to the cart instead of searching again.
From browsing to purchasing, AI-powered website analytics play a big part in ensuring enjoyable customer experiences. Its power to analyze large datasets across various formats means grocers can integrate data from social media, mobile apps, and online shopping sites.
They can identify customers’ purchase journeys, searches, and when they abandon carts. This advanced data analytics helps grocers optimize sales processes, reduce cart abandonment and provide an increasingly personalized service that keeps customers returning.
2. Boost Flexible Delivery
Depending on convenience, price, weather, and daily whereabouts, customers tend to choose home delivery today, curbside pickup the following week, and in-store the next. This creates complexity for stores. Grocers need real-time data to help manage their delivery teams at optimal capacity, keeping costs and carbon footprint minimal.
Access to live traffic data can help grocers provide the best routes for their drivers. However, they also need to review historical driver data to provide reliable delivery times to customers.
With the support of telematics and advanced analytics, grocers can optimize their delivery slots and routes for quicker deliveries. This enables customer flexibility while improving delivery precision and ensuring freshness on arrival.
3. Make Order Fulfillment Profitable
As the number of delivery options grows, grocers need to manage, pick and accurately prepare multiple orders for their requested delivery type simultaneously.
McKinsey’s research found that the largest aggregate cost for online fulfillment is typically picking. Say the average grocery basket contains 30 items at a $100 consumer price with a pick speed of 60 units per hour. That’s 30 minutes to pick for a single order, which requires roughly $8 to $10 per hour in labor fees. Store expenses increase again with last-mile delivery. Grocers need to find ways to consolidate orders, contact customers, and hand over tasks smoothly to keep costs low.
Look out for multi-picking order fulfillment from your e-commerce-app provider—this saves labor costs and offers highly customizable processes to handle pickup and delivery.
The ability to reach out to customers is the icing on the cake for successful grocers. I’ve seen that customers are more likely to select wider delivery slots, i.e., “morning delivery” or “between 8 a.m. and 12 p.m.,” if they can receive a notification that their shopping is on its way one hour before arrival. This way, retailers can manage their slots more flexibly and optimize capacity, supporting their budgets.
4. Sync Up Your Inventory Management And POS
When point-of-sale (POS) systems are fully integrated with inventory management tools, grocers remove the stress of product availability. Whether sales are made in-store or online, centralized AI systems can notify stores of low stocks. You can even set up automated supplier notifications. Thus, grocers can ensure continuous stock replenishment, and no customer is disappointed.
Already, retailers have shown a 14.8% average reduction in waste per store across 1,300 outlets by using AI solutions to improve order accuracy. Utilizing inventory management software throughout stores can help grocers improve product rotation and identify soon-to-be expired products for markdowns.
5. Feed the Bargain-Hungry With Personalized Offers
Managing budgets is tough for customers. According to The Independent, “Excluding volatile food and energy prices, so-called core inflation was up 4.7% over the previous year .” So, customers are bargain-hungry and will go anywhere for the best deal. Fifty-seven percent of grocery shoppers reported cutting back on nonessential spending, and 47% changed to cheaper merchants.
Customer service comes down to personalization, options, and flexibility. With AI, stores can provide individuals with more unique offers and choices.
Marketing teams assess which imagery and promotional graphics customers select and enhance their deals. Personalized promotions make happy shoppers, and customer satisfaction leads to customer loyalty, contributing to stores’ success.
Consider These Best Practices For Implementation
The tricky part with AI is that the outcome is only as good as your input. If grocers implement automated and continuous data collection processes, this is a good start for getting the most out of AI tools. Grocery stores are dynamic environments with constantly changing inventory, customer preferences, and market trends. It can take some time to gather and process all the required data to form reliable forecasts with AI, but talking to industry experts who have implemented similar tools will help.
Nevertheless, there are still some vital processes AI cannot replace, like recognizing a confused customer and helping them locate the correct aisle in the store or counting how many fruits will have perished by tomorrow. The best AI integrations are when the human and the tools support each other.
AI is making an impact throughout the purchase journey. Grocers’ priorities for 2023 will be to optimize their data with advanced analytics. Whether they opt for an all-in-one e-grocery platform or take a step-by-step approach with multiple partners, prepare to streamline your services and boost profits with AI tools.