Store of the Future   //   January 31, 2024

Grocers are beginning to blend AI technology into their store operations

AI technology could soon change the way people shop for essentials.

Earlier this month, Sam’s Club said that it plans to utilize artificial intelligence and computer vision-based technology to verify shopper’s receipts when they exit the store. Kroger, on the other hand, has been rolling out self-checkout solutions that incorporate AI technology. Indie grocery store Geissler’s Supermarkets will start to replace the majority of its traditional shopping carts with Instacart’s AI-powered Caper Carts in the coming months. 

Grocers have been using AI technology online or behind the scenes for the past couple of years, said Melissa Minkow, director of retail strategy at digital consultancy firm CI&T. But lately, grocers have started to incorporate them into their stores where they could interact with shoppers. By adding AI technology in physical stores, grocers could increase labor efficiencies, speed up lines and make the shopping experience smoother.

“We’re in a challenging labor environment given the economic landscape,” Minkow said. “It’s really important that retailers are optimizing the time of their employees so that their employees are fulfilled and able to interact with customers in the most effective ways.”  

Indeed, grocers are investing heavily on artificial intelligence. In fact, grocers plan to bump up their AI spending by 400% before next year, a joint 2023 report from The Food Industry Association, Grocery Doppio and Wynshop indicates. The report shows merchandising, marketing and supply chain as the top three use cases for AI technology.

Minkow said some grocers have started using AI to perform redundant tasks typically done by store employees. At Sam’s Club, for example, the receipt verification tool would phase out the need for workers to manually scan or inspect receipts when shoppers leave the store. The tool is initially being launched at 10 locations but it will soon be deployed to its roughly 600 stores this year. 

Kroger, on the other hand, is using AI to prevent theft as it invests further into the self-checkout model. The grocer has cameras that monitor self-checkout lanes and artificial intelligence will be used to examine how shoppers are scanning items.

“There’s definitely potential for larger baskets from shoppers,” Minkow said. “There’s also a strengthened brand reputation because the customers are leaving feeling more satisfied by the interactions that they’re able to have with store employees.”

Instacart’s AI-powered carts have the ability to automatically identify products that shoppers put in the cart. The smart cart then scans it, and adds it to the shoppers total bill. The cart could also help accelerate the checkout process. Geissler’s Supermarkets’ shoppers could also link their loyalty account to the cart and get personalized promotions.   

Upon announcing the roll out of Instacart’s smart cart to stores, Geissler’s Supermarkets CEO Bob Rybick said that the company aims to gain more repeat customers and grow its basket sizes. “We see clearly the value that Caper Carts bring to our customers and our business, in the short and long term,” Rybick said in a press release. “At launch, they’ll reduce lines and congestion while freeing up store associates to focus more on customer support. The carts’ screens help customers easily find items on their list, stay on budget, and access tailored recommendations and deals as they browse the aisles.”

Although AI could help make stores more efficient, adopting it in stores can be challenging, said Sudip Mazumder, North America retail industry lead for Publicis Sapient. Using AI technology to shop can be a steep learning curve for some people. “If you go into self-checkout, [for example], what the stores did was move the burden of the store associate onto the consumer,” he said. It can be “a very frustrating experience for the consumers.”

Additionally, AI technology can still make mistakes, causing frustration among shoppers. A social media user on YouTube Shorts claimed that Kroger mistakenly accused him of stealing in the self-checkout lane.  

Still, Mazumder expects investments in AI to continue. “I do feel that this is going to accelerate quite heavily because it actually helps them get better at reducing costs.”