2023 Issues, Predictions & Trend Forecast for Food: Retail Technologies in Grocery

May 08, 2023

2023 Issues, Predictions & Trend Forecast for Food: Retail Technologies in Grocery

Today, it’s all about how retail technologies are, and should, change grocery retail.

This is the fourth in a series of columns that report on the 30th annual The Lempert Report Trend Forecast; its focus is on the most important issues the retail and food industries face. Today, it’s all about how retail technologies are, and should, change grocery retail.

Retail technology has embraced digital tools and innovations both in brick & mortar stores and e-commerce platforms at lightening speeds since the pandemic. We are at the precipice of retail digital transformation. In 2020 investments and funding directed towards retail technology was over $40 billion in the US. Globally it was valued at $143.5 billion and is expected to reach $388 billion by 2026 according to Mobindustry.

The path for smart grocery retailers is to create a hybrid of traditional shopping methods with AI, machine learning and other technologies to create faster, personalized, and better shopping experiences — everything from self-checkout to smart mirrors, to curated recipes to shopping on a grocer’s social media platforms. A word of caution: let’s not focus on just those new shiny objects like ChatGPT. Let’s look at the low hanging fruit.

Ninety million US adults have smart speakers with approximately $40 billion spent on voice shopping in the US. How will grocers develop their smart speaker strategy that goes beyond your shoppers filling their speaker carts for the more tech savvy Amazon Fresh and Whole Foods? In our last Trend Forecast we spoke about the Metaverse and how grocery retailers must think about that developing program – but honestly, that is still years away. In the meantime, there is a lot that can and should be done today.

Walmart announced last month that within three years, the unit cost of moving goods will fall 20% as warehouse robots play a larger role in getting orders to shoppers. A positive move for sure, but it’s time we move more technology to the front of the store. Grocers, as one example, can use 3D printers to customize cakes and pizzas to a shopper’s taste and nutritional desires to increase customization of taste, nutritional needs, avoid allergens and decrease the amount of wasted foods.

It is time to take the next step. AI devices can be used for customer service, recipes, wine pairings, ingredient recommendations, food allergen information and ordering online. And is now being used for drive thru ordering and counter service in fast food chains including McDonald’s, Chipotle, Taco Bell, Popeyes, Wingstop and Domino’s Pizza. Flippy, the burger machine, is flipping burgers at White Castle. Supermarkets around the nation have installed Sally the salad maker. Baum + Whiteman 2023 foodservice trends reports that AI is directing the robotic production of pizza, French fries, taco chips, pasta dishes and drink dispensers; and can tell restaurant managers when and how much to prep, when to cook, when to replenish, and when to shift labor to a different station.

Why aren’t supermarkets utilizing these tools as well? AI and machine learning can outperform humans in language understanding, reading comprehension and image recognition. Birdzi’s AI understands a shopper’s profile and generates personalized promotions and discounts. Instacart has already integrated ChatGPT into the search functions on their website and app allowing shoppers to ask more extensive questions – even about ingredients and nutritionals – and shoppers get back contextual answers, not a list of search responses that a shopper has to click on to read. Nestle is using AI to analyze trends, ingredients, flavors and health benefits from social media, online publications, and other web sources to discover new trends for product ideas. One example they share is how they use AI to predict the sensory properties of coffee innovations – they call it an ‘electronic tongue.’ They developed a free web-based tool together with the Crohn’s & Colitis Foundation to help consumers make gut-friendly recipes that are personalized based on the consumers’ profiles.

Our supermarket retail dietitians can use AI to generate customized meal plans based on dietary needs and restrictions, food allergies, budgets, and drug interactions. Walmart, The Fresh Market and ALDI recently updated their digital storefronts — In order to personalize, enhance and build a stronger relationship with their shoppers by curating the products designed just for that shopper through product recommendations, seasonal storefronts, themed product bundles, shoppable recipes and recorded how-to and live videos. ALDI even added an “explore” button to build on their cult-following limited time Aldi Finds products.

Twitter Inc became X, and Elon Musk’s vision is to be THE everything app that extends well beyond the Twitter social media we know today. He said at a March Morgan Stanley conference he wants X to become the biggest financial institution in the world and will expand into ride sharing and food delivery along with other services that connects facets of everyday life. According to Pew Research in 2021, US adults were spending an average of 485 minutes a day with digital media – that’s over eight hours a day. How many minutes do your shoppers spend with your digital assets?

Monday, the 2023 Trend Forecast continues with a discussion about how climate change is affecting grocery retail and the brands they sell.