look at the cannibalization they have, because they canceled each other out,” says Cheryl Sullivan, Revionics’
chief marketing and strategy officer. “You can’t just throw
something in an ad any more or on an endcap. You need
science to tell you what the everyday low price should be
and what, when and where you should promote.”
Business and Supply Chain Optimization
It’s hard for humans to step back and look at their business,
but artificial intelligence can. It can also ensure business is
running smoothly, keeping the right products on shelves
and deliveries coming at the best times; forecast the supply
chain for inventory, demand and supply, thus minimizing
both out-of-stocks and food waste; and make correlations
between the number of employees in a store and sales.
Distribution centers are using AI to fulfill orders, and
wholesalers are using it for their demand forecasting,
says Hawkins. They’re also using the technology to route
delivery trucks as well as schedule people and order fulfillment, to make their business as efficient as possible.
Market research firm IDC expects that by 2020, half
of mature supply chains will use AI. This technology will
analyze enormous volumes of data to spot trends and predict problems and outcomes.
This, says Mara Devitt, senior partner with retail consulting firm McMillanDoolittle in Chicago, will remove friction
from the shopping experience for consumers. It will also
help retailers push their private label lines—helping them
understand what consumers are looking for and why.
In the Netherlands, Ahold Delhaize announced a partnership last spring with the Innovation Center for Artificial Intelligence. Through this, researchers will study
algorithms so the grocery retailer can make product
recommendations to consumers and manage the flow of
goods and optimize the supply chain, including taking the
weather into account when looking into the availability of
goods. “We want to … learn how AI can be used to better
serve the interests of our customers,” said Frans Muller,
deputy CEO of Ahold Delhaize, when revealing the news.
Standing in line for groceries may soon be akin to writing
a check to pay, and cashierless grocery stores are becom-
ing mainstream thanks to artificial intelligence. AI is also
powering the use of digital video analytics to understand
customer behavior; a perfect example is Amazon Go.
“Amazon’s AI-powered capability ingests all the feeds
from cameras, shelf sensors and other technology to
understand the specific items customers walk out the
door with,” Hawkins of CART says.
Amazon’s not alone. A year ago, H-E-B piloted H-E-B
Go, a self-checkout mobile app, in two stores in its hometown of San Antonio and has since expanded it to seven
Austin stores. And last year, Kroger announced the expansion of its Scan, Bag, Go technology to 400 stores in 2018.
In China, Walmart opened a high-tech supermarket in
Shenzhen, where customers pay with their mobile devices
using a WeChat program as they shop. And in Shanghai,
there’s Moby, a convenience store on wheels. Customers
enter via a smartphone app and are greeted by a hologram. After consumers shop with a smart basket, Moby
automatically takes payment as they leave.
When we think of AI, many of us imagine robots, and
they’re another piece of the puzzle. AI includes robots
such as the more than 100,000 in Amazon fulfillment
centers; the drones it’s planning to use; self-driving cars
(for supply chain and delivery to customers); and driverless forklifts, carts and pallet movers.
In Scottsdale, Ariz., Kroger is using self-driving cars to
deliver groceries from its Fry’s store, in partnership with
robotics firm Nuro.
Cars are also used by Farmstead, which uses Udelv to
deliver groceries in the San Francisco Bay Area. Customers receive a text announcing a vehicle’s arrival and use a
code to open a door to access their groceries.
“This technology will [enable] us to get fresh groceries
into our customers’ homes even faster and cheaper than
before,” said Farmstead CEO and co-founder Pradeep
Elankumaran at Groceryshop 2018 in Las Vegas.
And toward the end of last year, Kroger announced the
creation of its first robotic warehouse in Monroe, Ohio,
designed by online grocery retailer Ocado, which will
likely open in two years, followed by 20 more.
Bentonville, Ark.-based Walmart is also piloting robots.
The Bossa Nova robots check stores for out-of-stocks
and ensures everything’s in the right place and correctly
priced. The retailer also plans to use automated robotic
carts for online grocery orders.
And the retailing behemoth announced last summer
that it would start using a robotic picker—the Alphabot—
by the end of the year. It will automate the dry-goods portion of online grocery orders assembly at a Supercenter
in Salem, N.H. Walmart’s also using the Fast Unloader,
which unloads delivery trucks and scans them, directing
Amount of industry
believe AI will
revolutionize the way
they gain information
from and interact
We are talking massive volumes of data,
which is an environment AI is made for. A
human being cannot begin to tackle that.”
— Gary Hawkins, CART
Optimization Solutions Operations & Supply Chain