Why now is the time for regional grocers to capitalize on AI

Why now is the time for regional grocers to capitalize on AI

Unless they’ve been hiding under a rock for the past 18 months, independent grocers, like all retailers, are hearing about artificial intelligence, or “A.I.”, and how it offers the potential to completely transform their forecasting, merchandising and marketing and supercharge profits. The Center for Advancing Retail & Technology (CART) predicted a year ago that that 2017 will be “a year of acceleration” as the retail industry “comes to terms with operating in a new world driven by fast-paced change.” A.I. offers tremendous opportunity for grocery leaders looking to up their game and the grocery industry is very well-suited to leverage A.I. We know we can use A.I. to maximize grocery industry profits through analyzing massive data across hundreds of thousands of SKUs and millions of transaction sets to uncover dynamic and highly-complex relationships around cross-category cannibalization, promotional cadence, product affinities, price sensitivity, and seasonality. To be clear, this isn’t “traditional analytics” i.e. statistical analysis or predictive analytics where grocery retailers only analyze historical data. A.I. actually gives us the ability to use math to rapidly calculate through millions of variables and optimize decision-making around promotion, pricing, and inventory forecasting. The bigger players already know this, and they are investing billions in A.I. and realizing efficiencies that allow them to drive down prices in an already highly competitive market. There is no question about it. Grocery retailers, whether large, medium or small, will have to step up and implement advanced innovative solutions to keep up in a quickly-evolving space. So, while it is a fact that A.I. applications are a major critical threat to the independent grocer, what an investment...