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Published in Food/Agribusiness
The new Shop & Scan option from Meijer allows customers to register and bag items as they go and pay when leaving the store. The new Shop & Scan option from Meijer allows customers to register and bag items as they go and pay when leaving the store. COURTESY PHOTO

Though ‘late to the game,’ food retailers undergo major AI-powered shift

BY Sunday, August 02, 2020 06:00pm

Prior to the COVID-19 pandemic, major grocery retailers were already shifting to a more futuristic shopping experience in which customers either pre-order online and pick up at the store or act as their own clerk by scanning items as they go. 

Food industry experts say the pandemic will accelerate these trends as customers seek touchless and contactless options and are increasingly driven to e-commerce grocery shopping options.

“It’s going to change a lot more and so quickly because of the current environment,” said Doug Baker, vice president of industry relations for the Food Marketing Institute, a Washington, D.C.-based trade group.

Though Baker said food retailers are “a little bit late to the game” compared to other retail sectors when it comes to AI deployment, they are advancing quickly, not just to change the customer experience but also with mining data to track consumer trends and laying out and stocking stores. 

For example, customer shopping data can inform which products stores market, Baker said. Stores also can use those shopping trends to determine which products are featured and where on the store floor. It’s all about customizing the shopping experience and operational efficiencies.

“At the base of everything, AI has been really effective for retailers (and they can) analyze that data and come away with some trends and recommendations,” Baker said.

It’s part of a broader shift in the food shopping experience on both ends. Monthly e-grocery sales have spiked during the pandemic, from $4 billion in March to $7.2 billion in June, according to a recent Brick Meets Click/Mercatus Grocery Survey. That changes how stores use labor, shifting from traditional checkout clerks and inventory staff to more fulfillment and customer service roles. However, the shift isn’t raising labor concerns for Baker.

“We’ll never throw the baby out with the bathwater,” he said. “What it does is there’s an expectation from consumers that we want to be entertained. You need employees in the store who are highly service-oriented.”

Robots are also replacing human labor for checking out-of-stock inventory and reporting hazards on floors. Pennsylvania-based Giant Food Stores LLC last year deployed nearly 200 such robots in stores across four states.

If the self-checkout lane was one of the first major AI disruptions in food retail, companies including Meijer Inc. and Kroger Co. are fundamentally changing the grocery shopping experience. Kroger recently announced it’s launching three new fulfillment centers, including one in the Great Lakes region, where automated warehouses use robots to fill customer orders and offer home delivery. Meijer’s mobile app includes a “Shop & Scan” option that allows you to register and bag items as you go.

“You don’t need additional equipment for (scan-and-go),” Baker said. “On the back end, you manage the transaction and allow customers the freedom to do that on their own. It also allows consumers to see what they’re scanning against the shelf tag.”

In the years ahead, Baker sees only growth for food e-commerce, touchless interactions and greater use of voice and visual AI.

“I think in the next five years we’ll see some really neat things coming out of that as well,” he said.

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