Three Reasons Generative AI Will Be the Next Disruption for E-Grocery Stores

Generative artificial intelligence (AI) has taken the world by storm since OpenAI’s ChatGPT launched in November 2022. In response to questions or “prompts,” the AI system can generate authentic text, images and even code if you ask it to.

We’re already seeing ChatGPT modifications make their way into security operations, media creation, and MBA programs. VentureBeat noted that Orca Security uses its integration to “process alerts, note the compromised assets and attack vectors, and generate instructions on how to remediate the issue.”

Similar large language models share its real-time data analysis and 24/7 assistance – with the added feature of appearing to pass the Turing test, presenting the potential to help worldwide industries stay ahead of the curve.

Business owners have the opportunity to vastly increase productivity for the entire organization, from providing restaurant customers with food recommendations to explaining to amateur coders Java languages in words. However, this powerful innovation should be used with careful and thoughtful planning, as it still needs a human touch.

What’s in store for grocers, and how can they prepare for generative AI’s arrival? Let’s start browsing.

1. Customers Personalize Their Own Experience

Personalization is more crucial than ever for grocers to retain loyal customers. It requires complex calculations to analyze customers’ purchase history and preferences based on mobile apps, e-commerce, and point-of-sale data. In the end, store managers could still get it wrong, as one person’s idea of a perfect product combo could differ from the next.

Traditionally, stores recommend product pairings or the top three items others bought based on an e-commerce basket selection. However, suppose a customer wants to know what goes best with chicken curry. In that case, they can ask generative AI. Rather than suggesting the fixed most popular pairings, it pushes out a selection of options that modifies itself as customers continue to converse and make their questions more specific.

Chatbots can provide personalized product recommendations based on what the customer asks for as opposed to analytical assumptions, improving the overall customer experience and increasing customer loyalty. One of the benefits of the latest generation of AI is that while it doesn’t always know if the result it provides is correct, it can “sound” confident and creative as it recommends products the customer hadn’t thought of with its conversational tone.

What’s more, customer preferences are warming more toward digital experiences. A Redpoint Global study found that “54% of consumers think AI can help brands keep personal information safer and more secure”—and this figure is rising among Gen Z consumers. If they know a robot is behind their shopping apps, they’re more likely to feel comfortable asking for support.

2. Product Discovery And Subtle Upselling

Generative AI can also help customers discover new and related products they may not have otherwise considered. The tool achieves this through various techniques such as visual search, product tagging, and image recognition.

Let’s say you’re looking for exciting dinner recipes to bring your daughter’s Mexican-themed birthday party to life. With ChatGPT, users can type, verbalize or share an image with their request and get a handful of different ideas along with the recipes’ flavor profiles and required ingredients.

Some companies are already looking at ways to integrate this with their e-commerce platforms. For instance, Instacart plans to use the chatbot to power a new search engine that responds to users’ food-related questions, using data from 75,000 grocery stores in its partner network. Automatically suggesting recipes based on what e-grocers have in stock could be a game changer for the industry.

3. Expanding Opportunities With Inventory Management

As the pressure for personalized recommendations and e-commerce stands, the 2023 Supermarket News Survey found that 42% of retailers are looking to prioritize supply chain optimization in the year ahead. While ChatGPT might think it can support inventory management, predict sales demand, and optimize supply chains, the tool runs on general training data from 2021 and prior, so it won’t know your specific metrics.

Nevertheless, as companies begin experimenting with the service and using actual data, asking the bot to optimize companies’ sales forecasts could be less obscene in the near future. However, to obtain productivity from generative AI, one needs to have a plan and a platform to “train” the AI specific to your company.

While it will take some work (it’s like training a new employee), imagine the chatbot can automatically put proposed recipe ingredients directly into customers’ e-baskets without placing an order for each item. The chatbot references this with inventory while suggesting substitutes if an item is unavailable. Instead of just using numbers, the AI uses patterns to offer a different inventory restocking strategy with words, supporting inventory managers and staff members who are not data-savvy.

Looking Ahead: How Grocers Can Prepare

For accurate inventory management and insights into customer behavior, grocers must collect the right information and have the data ready. Transaction data is a start, but creating customer profiles based on items purchased and their shopping frequency will enable them to train and personalize their AI tools.

However, no matter how advanced the AI, data is unique to each grocery store and must be well maintained—it’s the difference between ordering two pallets of cereal versus 20. For AI tools to know the unique products and customers’ current preferences in stores, it will require data to train it. For this reason, data needs to be analyzed by an expert and organized. Then, AI tools will need to be set up with product testing for each grocer. Once the AI is in place, the process for staff can become much easier.

Grocers must think carefully about the impact that generative AI is having on the market. AI tools are only as good as the data that feeds into them, so grocers who prepare today with governed and automated data collection strategies and data cleansing processes are in the best seats for getting ahead.

Read the Forbes article here.