woman buying groceries from a stall

Revolutionizing grocery retail with artificial intelligence

While there is a lot of chatter around artificial intelligence and the potential it has to transform retail, it has the capability to impact the most fundamental shopping experiences: the grocery store. Most retailers are moving towards building a better grocery store experience, with the rise of subscription meal kits and competition from pure-play grocery delivery services. With the abundance of customer data and product information available, grocers today are in a special position to apply machine learning and AI in other areas of the business as well.

The grocery industry has a heavy reliance on the movement of perishable goods and with supermarkets struggling to plan, promote and sell goods in a short period of time, it is not efficient. Furthermore, there is a lot of food wastage that happens in this industry - while some of that waste happens in consumers’ homes, a good amount is also lost in the supply chain - anywhere between the farm and the store shelf. And with the various options for when, where and how to buy groceries, grocers compete on prices that are most likely to be profitable.

While grocers are faced with these challenges, they have a fairly good idea of their customer base, who they are and what they want to buy at what price point. With the data available, there is a lot of opportunities utilizing the data in the right manner. This is where AI comes in. Using machine learning capabilities and analytics, more grocers are leaning towards adopting this technology to strengthen the relationship with customers, as well as address some of the biggest challenges they are faced with today.

Leveraging the abundance of customer data

The grocery industry was one of the first industries to collect shopper buying data through programs such as loyalty programs and in-store promotional offers. These methods helped grocers gather information about their key shopper demographic as well as brand preferences. This information is already leveraged to provide discounts and special promotions, the new technology can help enhance the relationship between the grocer and shopper even further.

AI helps grocers to provide a deeper understanding of context and intent by answering the questions behind customers' shopping decisions. It also enables the grocers to parse the customer data and automate the ability to offer targeted promotions to each customer.

Enhanced inventory management

AI can change the entire way of managing inventory. AI can help stock shelves with the right mix of products and ensure that the supply chain is aligned to avoid out of stock products using point-of-sale information and inventory visibility.

Machine learning can build on grocers' rich customer data and combine that with contextual data such as weather, climate, holidays and events - providing a more accurate forecast compared to traditional methods.

Reducing waste

With better inventory management and data analytics, AI can provide better visibility on produce and perishables. Automation can help stores dynamically re-adjust orders based on demand or automate product promotions for the items that are not performing well or selling fast, and helping stores to protect margins, and reducing the amount of food that goes into landfills.

As AI and machine learning advances, grocers should begin to position their systems for a seamless transition towards a highly automated future.


AI must integrate into the commerce platforms and connect across systems to maximize its effectiveness throughout the business. While AI is a valuable tool for customer service, the impact of it will come through its ability to reward loyalty, understand consumer behavior, ensure reduced wastage and increase revenue for the retailers.

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