How MIRA members can embrace the inevitable with Artificial Intelligence
By Epiphany Communications & Coaching*
Savvy business owners and entrepreneurs understand that to achieve success and improve sales in today’s ultra competitive marketplace, they must continuously adapt to new trends and utilize the latest technology.
Just like online shopping, which has become commonplace, Artificial Intelligence (AI) is coming and will be here to stay.
“As far as AI is concerned in the food industry, it could be amazing for us,” said Bobby Hesano, president & CEO of D&B Grocers, and chairman of the MIRA Board of Governors. “I can see applications for it in our industry such as robotics from a distribution standpoint. It is still relatively new, and we are learning about its advantages and disadvantages.”
Research shows that many people prefer to look at items and touch them personally and they continue to visit physical grocery stores. U.S. retailers are among those investing the most in this technology model.
According to the IDG Communications Spending Guide, the investment will reach $120 billion by 2025. According to the consulting firm, that equates to nearly 20% growth in all 19 economic sectors, including grocery.
Many industries are trying to figure out how to embrace AI. Experts and many others alike are researching the potential and one thing to consider is that retailers could tailor personalized promotions by possessing relevant information about consumers walking through the grocery aisles.
“When talking AI, it needs to be split between ‘generative’ and ‘regenerative’,” said Dr. Russell J. Zwanka, Food Marketing Program Director at Western Michigan University. “Generative, or using AI to generate content, has been used previously, and could soon replace marketing design needs, product design needs, social content generation, even recipe generation.”
Generative AI has been extremely helpful in supply chain projections, sales forecasts, etc., but simply from a standpoint of human input into the parameters while regenerative can take all the above and constantly refine algorithms and content to continuously improve wherever it’s applied. “Think of going from using past weather data to predict supply chain draw on certain items, to now using real-time hurricane predictions to increase orders and shipping of batteries, water, and other hurricane supplies,” said Zwanka. “Regenerative AI has the potential to use data to predict needs, as opposed to react to needs. In our industry, especially with turnover and labor shortages, having AI assist in these previously human functions can help in business continuity or in training of new hires.”
One area Zwanka said they see quite a bit of activity is in tailored diet suggestions for guests. “Being able to take past purchase data, and opt-in health considerations (flexitarian, gluten free, vegetarian), to suggest a diet, turn it into recipes, then help the customer source the products, is especially helpful and fascinating,” noted Zwanka.
AI can help with retail food preferences, whether customers have food allergies, and what motivates them to buy a particular item; also, the technologies allow for analyzing user behavior and to organize products more efficiently. Meanwhile, consumers learn through various channels what the offers are and when it is convenient for them to buy.
“Retailers can embrace AI by first identifying their specific needs and challenges, and then determining the best AI tools to address them,” said Al Zara, CEO and founder of Geek Town USA. “AI can be used to greatly enhance and optimize their marketing efforts, allowing them to scale their digital marketing endeavors more easily. This could involve investing in necessary infrastructure and skills training to leverage AI technologies effectively. Retailers should start with achievable goals such as using AI for inventory management, personalizing offers, or refining pricing strategies.”
As retailers grow more comfortable with the technology, they can implement more advanced AI applications to further improve and scale their operations. Zara notes that transparency about the use of AI and data is crucial for maintaining customer trust, so retailers should always prioritize data privacy and security. Finally, retailers should remember that implementing AI is a journey involving continual learning and adaptation as technologies evolve and customer expectations change.
According to news reports, AI is a tool that can help supermarkets monitor inventory in real time by using robots to solve problems related to goods, such as preventing them from running out of stock. Additionally, AI can scan labels and prices. The technology uses algorithms that capture information and automatically examine it to make it easier to check for missing or incorrectly priced products. The retailer ensures the availability of the most in-demand groceries and avoids food waste. Also, AI machines help employees with product deliveries, so shoppers receive them faster.
“If used properly, it can be an amazing tool for our industry,” said Hesano. “I am just now doing more research on it. If you look at Planogram at the retail level, AI could help determine how to place items on a shelf.”
Planogram is a diagram or model that indicates the placement of retail products on shelves to maximize sales. “You put in information about three different sizes of the same product and AI could essentially spit out in real time, down to the exact centimeter on the shelf, how a product could be displayed,” said Hesano.
Hesano has also done research on the Queuing Theory which is the mathematical study of waiting in lines, or queues. A queueing model is constructed so that queue lengths and waiting time can be predicted. “This could be beneficial in a store,” said Hesano. “AI could be used in this application as well.”
Research shows that AI can reduce shoplifting in retail stores, as it can detect unusual and inappropriate behavior. Businesses are incorporating computers that help security managers identify theft attempts. The system records suspicious activity and notifies management when someone hides an item in their wallet or pocket.
The technology can detect when a cashier pretends to swipe a bar code through the machine for malicious purposes and can also monitor and control crowds. Future supermarkets will also control the number of people inside the store, thanks to this technology. Through special tracking sensors, they monitor the flow of people to avoid crowds that might bother shoppers.
Additionally, AI opens the door for consumers to view products and make their purchases. It identifies the products placed in the shopping cart and automatically counts the amount to be paid. AI then charges it to the user’s bank card, thus avoiding the need for them to wait in line to be served by a cashier.
Although many employees are concerned about being replaced by technology, AI does not necessarily mean depriving the worker of his job since he can take another role within the company.
Implementing the technology can be challenging. The cost varies depending on the type of software, amount of data it processes, quality, level of intelligence, and accuracy of predictions.
Currently, some companies use intelligent traffic lights to direct the passage of traffic to certain areas. A red light goes on when the number of people exceeds the pre-established limit. This is a signal that there is no access until the area is cleared. The green light indicates that there is sufficient free space or clearance.
However, business owners need to hire the right talent and demonstrate that the data collected by AI will not be compromised. This requires human oversight.
Trust is a factor. Business owners need to consider abuse or lack of transparency regarding the use of data collection that could affect your relationship with customers.
The supermarkets of the future will be more innovative and many well-known grocery stores and grocery chains around the country have already successfully integrated this technology.
The goal is to improve the consumer experience and to attract shoppers to the store.
Currently, many MIRA members are beginning to use AI for simple tasks like creating job descriptions or writing emails. “We use it to help draft messages or get ideas for messages we want to send via email,” said Randy Oram, CEO of International Outdoor Inc. “You don’t have to think about the context of the message too much, AI does so much of that for you.”
Research shows that AI helps advertisers create more effective outdoor ads, that means brands alter creative using AI, and deliver, through programmatic targeting, much more personalized messaging on a digital billboard based on whether it’s sunny or rainy, night or day, as well as hyper-localize billboards.
Oram uses ChatGPT, to craft his messages for various communications. “The more details you put in; the more information is generated. It saves a lot of time. You then can tweak the message to tailor it to your needs. In business you need every advantage to be successful, those small businesses that are forward thinking and embrace this new technology will likely be the ones that are still in business in ten years”.
Oram will continue to research the value of AI and its benefits in his business. He elaborates more on his business in this issue’s spotlight on it.
*Writers with Epiphany Communications & Coaching are content creators for Bottom Line.