The estimated 4,000 attendees in Las Vegas for Groceryshop were treated to more insightful content on Day 2 of the event. Some of the themes were recurring from Day 1 as the conversations continued regarding digital transformation, the urgency to innovate, unified commerce and the effective use of data to improve business performance.
However, the hands-down winner of the most popular topic from Day 2 was generative AI. It was mentioned in numerous sessions, discussed on the show floor and was the featured theme of several sessions. Here’s a look at Day 2 highlights, notable speakers and the overriding theme of generative AI.
Gen AI is a C-suite priority
One recurring theme on Day 2 was generative AI and its rapid emergence as a C-suite priority. One reason why is the fear of missing out created by the hype surrounding generative AI. However, there is also a widely held belief that generative AI is going to transform business by driving productivity improvements and sales and margin opportunities. It is a situation no retailer or CPG wants to miss out on even if all the use cases aren’t fully understood.
“Generative AI is worth getting excited about,” said Graham Hogg, co-founder and CEO of see6, a startup that leverage generative AI to help CPGs craft more tailored communications. “In areas where teams are trying to synthesize vast amounts of information there are clear productivity wins and opportunities for improved effectiveness.”
Hogg was part of a panel titled, “Generative AI Tools for Grocery & CPG,” and he recalled how last year at Groceryshop there was a lot of buzz about nebulous concepts like NFTs and the metaverse.
“I think generative AI is really different because there is work to be done and business value to create,” Hogg said. “There is C-suite pressure and excitement about this. It is worth getting excited about.”
That’s why, according to Hogg’s fellow panelist Matt Swalley, co-founder and chief business officer of Omneky, “companies have to play offense and figure out how to plug generative AI into work flows and solve real business problems and empower human creativity.”
The way Swalley’s company does that is by generating personalized content at scale to keep pace with consumers’ ever shorter attention spans. Using generative AI algorithms, the Omneky platform lets retailers and CPGs analyze performance data and the design preferences of target audiences to generate thousands of ads.
Swalley encouraged retailers and brands who aren’t already doing so to, “jump in and start playing with generative AI and look at individual tools for specific use cases. Empower your teams to move fast.”
The future of AI in Grocery
Hungryroot isn’t a household name in grocery, yet, but the company is leveraging AI in unique ways worthy of attention from conventional grocers. Founded in 2015 as a CPG company with a handful of products sold online, the company pivoted four years later to become an AI-powered personalized grocery service with a unique business model.
“We built the entire platform on AI with an algorithm that determines the ideal basket for each customer each week,” said Ben McKean, Hungryroot’s founder and CEO.
The company uses a screening tool to learn about customers’ lifestyles, preferences and behaviors and also uses machine learning to infer data about new customers based on users with similar profiles. That way when a shopper uses the platform the AI has prepopulated a customer’s cart and then items that are unwanted can be removed.
The algorithm works so well that it accounts for 70% of sales and it creates a virtuous cycle. The more accurate the AI, the more shoppers trust the approach, the better the experience and the more they purchase, according to McKean. Shoppers also save time and money because they are wasting less food.
“We are really bad at grocery shopping for ourselves,” McKean said, noting that between 20% and 30% of groceries are thrown away at home. “In five or 10 years you are going to want AI to do your grocery shopping for you. It is just fundamentally better at accomplishing it than we are as humans.”
Hungryroot uses generative AI as an internal efficiency tool and believes that it has quickly become table stakes for an industry undergoing a digital transformation. Although still a small company with annual sales last year of $237 million, the company’s sales in the first half of 2023 totaled $182 million and it has plans in the coming years to increase its SKU count to 4,000 from 600.
A paradigm shift in technology
A key aspect of Groceryshop relative to other industry trade shows is the emphasis on content, including the event organizer’s in-house content team which annually shares a report called The Grocery Zeitgeist. This year’s version looked at four major trends transforming grocery and, you guessed it, generative AI was among them.
Krystina Gustafson, SVP content at Groceryshop, and Ben Miller, director of original content at Groceryshop, defined generative AI as, “new types of artificial intelligence that can take a range of data sources and use them to generate new output.”
The pair said generative AI’s impact in the coming year will be felt in three ways: improving productivity and efficiency, enhancing the shopper experience and enhancing creativity. To capitalize on the opportunities, Gustafson and Miller encouraged attendees to use internal applications as their generative AI proving ground, balance guardrails with enthusiasm and ensure a business-wide strategy is in place with appropriate ownership.
Given generative AI’s trajectory, it is a safe bet that it will be a more dominant theme at Groceryshop 2024. The big difference is companies will be further along in adoption and better able to speak to specifics of productivity gains and examples of value creation.
If we missed you at Groceryshop 2023, but still want to experience how AI is transforming retail, reach out today to connect with a solutions expert.