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HOW AI AND VOICE ARE SHAPING THE GROCERY EXPERIENCE

Just a few years ago, having a conversation with a smartphone, TV, car or other household gadget seemed futuristic and to many people, strange. But just a couple of years down the line, thanks to major advances in technology, artificial intelligence (AI) and voice technology could become the next big thing for grocery shopping.

 

Often when we think about AI and its potential to transform the retail industry, it is easy to overlook how it could affect one of the most fundamental retail experiences – grocery shopping. Using customer loyalty programs and in-store promotions, retailers already have a good understanding of their key shopper demographics and brand preferences but greater opportunities lie in AI to bring all the data together. One of AI’s promises is a deeper understanding of context and intent, providing the ability to leverage consumer data further by automating individual customer targeted offers, building on existing loyalty with the retailer and brand.

 

AI is also a potential game changer when it comes to inventory. With heavy reliance on the movement of perishable goods, supermarkets tend to live and die on their ability to plan, promote and sell products within a short amount of time. While some waste occurs in the consumers’ home, a significant amount is lost in the supply chain. Paired with point-of-sale (POS) information and inventory visibility that extends beyond the retail store, AI can help keep shelves lined with the right mix of products and ensure the supply chain is aligned to avoid unnecessary costs. With the implementation of AI, retailers can also build on rich consumer data and combine with contextual data such as weather, holidays and events to provide a more accurate forecast than traditional methods. However, this level of automation is expected to take some time and investment as retailers will first need to connect disparate systems to bridge the gap between POS, warehouse management and logistics.  

 

“Retailers implementing AI may only think of AI as a product choice assistant to their customers, but it can be so much more. AI may help retailers determine the right items to be stocked within stores at any point in time and help to identify food trends before they’re mainstream. This can ultimately lead to less food waste, cost savings, and a satisfied shopper.” – Robert Foltz, Lead Software Developer, Foodmaestro.

 

Despite the opportunities for AI being clear to the industry and investment being high, adoption isn’t quite there yet. Currently, there is a significant contrast between those who are rolling out applied AI solutions at scale and reaping tangible business benefits versus those who are simply trialing the technology. However, as further investment and adoption is made, AI has the capability to revolutionise the grocery shopping experience across all markets; it’s potential is broad and unlimited.

 

While AI is in it’s early stages of being introduced to the grocery industry, voice control already represents the next phase in the evolution of human-machine interaction. The majority of today’s “smart” voice-controlled devices are powered by digital voice assistants, using speech recognition, AI-driven natural language processing and cloud computing technologies, making it easier for the software to convert speech into text and extract meaning.

 

As technology progresses, the self learning capabilities of voice assistants enable them to become more useful. Over time voice assistants can refine voice searches, learn patterns, preferences and behaviours of their users and provide relevant and personalised responses. Research predicts that by 2020, 50% of all searches will be voice searches. Despite the initial novelty, digital voice assistants and smart speakers are already having a significant impact on consumer behaviour. With voice control supporting customers search for information, consume content and shop in a more frictionless way, voice will revolutionise the grocery shopping experience for all.

 

Voice’s potential as the future of online communication has already drawn tech and retail giants, including Amazon and Google to join the ‘voice race’ to own the market. With more than two thirds of current owners of the Amazon Echo and Google Home smart speakers, consumers are planning to buy another smart speakers within the next six months. Not only are businesses heavily investing in voice, there is an aggressive push into a variety of environments using different devices. Businesses now see voice control as a way to engage in continuous conversation with consumer, protecting and expanding its products and services. Right now it’s impossible to say what the market will look like in the next 5 to 10 years but the industry has predicted a competitive landscape as consumers look to seek a seamless shopping experience.

 

Abbi Claxton, Product Manager at Nielsen Brandbank stated that “early adopters of voice will likely see the benefit of capturing this market however, with consumers wanting convenience it will be more important for retailers to be able to serve customers quickly and effortlessly. There are still many challenges to overcome to truly integrate and create a personalised shopping journey for each consumer, such as being able to suggest relevant products based on the likes, dietary and lifestyle requirements of each household at the right time.”

 

While some could say that AI and voice is relatively new within the industry, it is definitely the driving force in future of shopping. Forecasts for AI and voice market size, revenues and spending on hardware, software and services predict very healthy growth over the next few years. It has opened up a number of opportunities for retailers and brands across the world, enabling them to delve into areas that they have not been able to reach before. As more businesses invest heavily into the future, it’s time for consumers to prepare themselves for a frictionless online shopping experience using AI and voice.

 

With technology constantly changing, Nielsen Brandbank and Foodmaestro are hosting their first hackathon at Food Matters Live 2018! We are calling for creative minds to join us in creating the next big revolution to grocery shopping. Health-e-Hack invites you to explore innovative ideas that enable us to better serve The Conscious Consumer. To register or for more information visit http://www.foodmaestro.me/HEALTHeHACK.html.




Interview with Nick Lansley: An insight into the future of retail

Nick Lansley will be the master of ceremony for Health-e-Hack at Food Matters Live 2018. Nick had more than 25 years of experience at Tesco where he was part of a team that was the first to bring online grocery shopping to UK customers. He is now working as an innovation consultant to help bring pragmatic innovation techniques to companies.  Foodmaestro and Nielsen Brandbank had the privilege to do a short Q&A with Nick before Health-e-Hack to get some initial insight into the future of retail and role of technology.  

How do you think technology can help reduce the friction between consumers and retailers? 

Technology has the remarkable ability to delight and annoy in equal measure, so successful retailers are the ones who deploy technology in such a way that it clearly makes a positive difference to the consumer experience. For example, consumers hate queuing at supermarket checkouts, but several stores tried to solve this by making consumers scan their own products. This experience went down badly. Retailers had not explained that the main reason for self-scan checkouts was to reduce or

 eliminate queuing, not kill jobs. The self-scan tills were a frustrating nightmare with products that would not scan and the “unexpected item in the bagging area”…! The good news is that the supermarkets started talking to consumers about till density, the technology got better, and now many prefer self-scan checkouts. Queues have dropped or are absent with the exception of peak shopping times. If you solve a consumer area of friction using technology, get it – and the message surrounding it – correct, you will quickly succeed. 

How can retailers impact the health of shoppers? 

Consumers have always wanted to eat healthier, but the messages from industry, healthcare providers, governments and the media have sown confusion. What consumers want is a simple, clearly signposted path that will show how to find healthier versions of food they love, and an incentive to give it a go. To make this work, access to high quality, reliable nutrition data is key. Then the ability to access that data simply and easily.  This access can be through a mobile app, a website, kiosk or even a staff-operated expert system to answer consumer questions. The solution needs to take the consumer on a journey to a set of products that they will enjoy and yet will be healthier than their previous choices. The incentive can come from great marketing – for example, health points that accumulate towards a reward. My own health has been positively impacted by the choice of a health insurer who offered me a ‘free’ health activity watch in return for doing some system-measurable exercises during a week. Earn 40 points a week and this month’s watch installment is free. I’ve made sure it’s been free every month! 

How do you think customer experience can be enhanced – which technologies can be incorporated? 

The best way of enhancing the customer experience is to find ways of harmonizing the different channels to work with each other. There have been many efforts to create the ‘omnichannel’ experience, but this ignores the fact that different retail channels (for example, in-store vs online) have unique strengths that suit one group of consumers over another. The challenge is to make all your channels suit all your customers through a great experience.   

A good example is the fact that in-store space constraints limit the number of different products for sale in any category. Compare this to online where such constraints are virtually non-existent. Customer experience can be enhanced if in-store technologies are used to help the consumer see the much wider range online. That way they can decide whether they can prefer the in-store range to take home right now, or the greater online range which they can’t have until tomorrow but will ultimately suit their needs better. 

What are the issues food retailers are facing to adopt innovation? 

Food retailers have been early adopters of the innovation process in a bid to improve efficiency and differentiate themselves in the market. When you make such little margin on a vast range of products, anything you can do to help colleagues and consumers experience you better, simpler and/or cheaper than the competition is key. The only issue has been for innovators to work in a rapid, pragmatic manner in such organisations – speedily executing innovation projects that take just days or weeks to find, test, and prove (or disprove) a particular solution to a business challenge. Good ideas are often discovered at the consumer-facing level. However, these innovative ideas can often take time to reach management teams to explore and implement these ideas to better serve the customer. The best way to adopt innovation is to facilitate everyone by creating a culture and environment to allow them to innovate in their roles. 

How will AI or voice technology change the retail industry? 

AI- Artificial intelligence (or more accurately, machine learning) will focus on marketing by contacting the customer ideally just when they are thinking of making a purchase. If you mine your data and use AI to find purchasing patterns of shoppers, you can contact shoppers right on time, so they think of you first!  

Voice technology has been the big surprise breakthrough technology of the last few years, but many retailers have not embraced the experience even though it is in an increasing number of consumer homes. Retailers embracing this technology are stealing a march by working with consumers and learning how to give the best experience. Voice technology is all about convenience, so a short conversation to find out where your nearest store is and when it opens will be a great first step – as easy as updating Google Maps, Yelp! and other location-based services. Next comes the convenience of finding your products and adding them to an online basket – ideal if you sell consumable items.  

Nick will be the MC at Health-e-Hack at Food Matters Live conference on November 20th-22nd, 2018.
To see details about the event, or to register visit www.foodmaestro.me/HEALTHeHACK.html