Generative AI: The Next Big Thing in Grocery Retail?

• Generative AI is being adopted by grocers faster than anticipated.
• The most popular application for generative AI in the grocery industry is as a customer assistant.
• Grocers need to address consumer concerns about the use of generative AI before fully integrating it into their businesses.

Generative AI has quickly become a significant focus for grocers as they imagine the future of their businesses, less than a year since the technology gained widespread attention.

According to a survey by Deloitte, the adoption of generative AI is happening faster than anticipated, with only 1% of senior executives from major U.S. grocery retailers believing it will take years to effectively deploy the technology. Around 84% of respondents are familiar with the capabilities of generative AI systems.

The survey, conducted in June, gathered responses from 100 senior executives in U.S. grocery retailers with over 10,000 employees. The executives identified various promising applications for generative AI in the grocery industry. The most popular choice, selected by 31% of respondents, was using it as a “customer assistant.” This could involve tasks such as answering customer queries, helping with meal planning, suggesting products, and alerting customers about sales.

Executives also recognized the potential impact of generative AI on back-office tasks. Approximately 22% believed that it could significantly change “managing supply chain logistics,” followed by “inventory management” at 19% and “assisting in the selection or creation of new private label products” at 8%.

Despite the potential benefits, there are challenges to using generative AI for customer service functions, particularly due to the collection of personal information from shoppers. Deloitte’s research indicated that consumers are wary of how food retailers might utilize generative AI, with only 22% of participants in a consumer survey agreeing that their primary grocery store would use the technology responsibly when communicating with shoppers.

Furthermore, more than half (53%) of consumer respondents expressed a preference not to receive communications generated by artificial intelligence from their grocery stores. To address these concerns, Deloitte recommended that grocers cautiously approach the integration of generative AI, enhancing existing digital services first and highlighting the advantages of tools like apps and smart speakers without explicitly mentioning generative AI.

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