Retailing beware - intelligent grocery shopping is on its way
The ultimate in convenience, relevance and service, the artificial intelligence approach to shopping presents both a threat and an opportunity to traditional retailers
Automated, virtual and customized shopping experiences are just some of the developments we can see growing out of a radically changing retail landscape. But could advances in technology lead us to the ultimate in convenience, relevance and service – intelligent grocery shopping?
The Internet of Things, Amazon Dash buttons and other specialist services will replenish individual products, however, item by item delivery is not really convenient when you consider the size of the average weekly or monthly supermarket shop. We also need to consider that shopping missions and behavior have changed and now include more frequent, smaller basket trips and online ordering.
How would it work?
Based on historical and current shopping data plus information provided by the customer, a full ‘shopping profile’ will provide the insights needed to develop smart, dynamic, personalized shopping lists for different days, weeks, months or seasons.
Consumers will be able to confirm which mundane items need automatically replenishing and, at the same time, select from the list, see the meal ideas and know they are getting the best value as any appropriate item on promotion will be automatically included. So they win on time, inspiration, value for money and convenience with everything delivered to the door.
It may sound futuristic but, for better or worse, it is just around the corner and retailers need to respond to the challenge.
Opportunity or threat?
This could be a huge opportunity for those retailers buying into the concept early. They will be able to better balance promotions; drive innovation and loyalty; and manage the supply chain through visibility and balancing replenishment items with more one-off purchases on the lists.
However, retailers who snooze may well lose as the idea is just begging for another business to jump in and steal a lead. Take Uber or Amazon for example, they both have the necessary foundation data, transport infrastructures and entrepreneurial attitude to develop an initial service. They are also in a position to ensure it reflects the fact that people tend to shop from more than one outlet, often combining a major supermarket with a discount store, farm shop or greengrocer. In addition, they wield enough power to demand heavy discounts from those retailers in exchange for preferred supplier status.
So what are the options for the retailer? The important question they should be asking themselves is ‘do I need to build alliances or will shoppers come to us exclusively?’
Another route would be to find a logistics partner who will make them a preferred source but at the same time remain free to fulfill customer demand for variety.
For example, FreshDirect, MyWebGrocer and Shoprite are already on board as retail partners to The Family Hub Refrigerator from Samsung*. This features a WiFi-enabled touch screen panel for ordering groceries online with a “Groceries by MasterCard” app, without booting up a computer. This underlines how important it will be for retailers to forge third party partnerships as artificial intelligence driven services and smart kitchen devices become more prevalent.
Whatever, the decision, retailers do need to move as this type of service is not a distant vision but already very much on the horizon. The only stumbling block to progress is pulling everything together and making it simple and reliable to use.