AI Powers Digital Shift In Grocery

AI Powers Digital Shift In Grocery

Artificial intelligence (AI) is entering the retail mainstream. Domino’s uses it to set pizza delivery times. Sephora’s ColorIQ scans shoppers’ skin to provide custom recommendations for foundation and concealer. Walmart’s Intelligent Retail Lab is experimenting with a number of artificial intelligence tools. And the most recent case in point: The pandemic has been a factor in Albertsons Companies – and all of its sub-brands – adopting AI-based solutions as virtual assistants.

The chain has partnered with AI communications provider Nuance Communications to address the demand for online grocery, which spiked as the pandemic spread. As new digital customers entered the system, they expected the same service they had received in-store. Albertsons turned to Nuance's virtual assistant and live chat solutions to assist online customers, providing real-time responses about delivery, order tracking and other queries.

"Supporting our customers' needs as quickly, safely and efficiently as possible is of utmost importance to us. We are pleased to offer shoppers multiple options when it comes to ordering online – from in-store pickup to contactless delivery," said Chris Rupp, EVP and chief customer and digital officer at Albertsons Companies. "Our associates are fully committed to assisting our customers in the stores, and now we can extend that same Albertsons experience to our digital channels, ensuring our customers' needs are met however they choose to shop."

Albertsons Companies has deployed the solution across its Vons stores, and now will deploy the AI-powered assistance across Safeway, Tom Thumb, Jewel Osco, Albertsons, Pavilions and Randalls. Nuance’s Director of Intelligent Engagement Market Development is Seb Reeve, who has been passionate about AI’s possibilities for some time.

“For retail, it’s really the killer app. AI in a text-based context can support and automate the customer journey,” he told PYMNTS. “And what we’ve come to realize is that the journey doesn’t end with the purchase. Our solution can serve as a guide, but it also connects humans to humans if need be. When there’s no way for people to speak to people, our automated solution senses when that conversation needs to happen. It’s all about firing up the customer experience.”

As a nine-year veteran at Nuance, Reeve has developed a knack for taking the mystery out of AI technology. As a recent NRF blog discussed, retailers are aware of AI, but not so familiar with how it can help their businesses. As Reeve explains, it starts with a customer going online to shop for groceries and then entering the automated live chat. The AI program recognizes the shopper’s anonymous login data and immediately determines whether they have a concern that needs to be escalated beyond automated capability. After determining the context of the request, the tech can ask some clarifying questions: How long has the customer been online? Are they searching for a product to pick up in-store or are they ordering online? Then, the AI algorithm suggests ordering the product or recommends additional items.

“The AI knows the browser, the device, the person and the context,” Reeve said. “It understands speech. It understands the intention of the customer. It can get all the way down to sentiment analysis, and if that shows potential trouble, it’s immediately escalated to a manager.”

As Reeve pointed out, AI is all about conversations. It enables retailers to provide a seamless experiences without putting a burden on call centers or customer service teams. Virtual assistants can answer queries in the manner just described, or even more mundane issues such as store locations or hours. Nuance’s Digital Engagement Platform is already seeing demand from the grocery industry and with retail at large. A top three global retailer found that 85 percent of final answers to customers were provided by the virtual assistant after deploying Nuance technologies, saw 30 percent conversation containment within the live chat.

“We’re seeing a renewed vigor toward understanding digitization,” Reeve noted. “We saw a big spike in short-term behavior in the grocery space, a real seismic shift. Look at a concept like zero-touch delivery. That all had to change very quickly. Companies have had to pivot. They’ve had to manage differently and they’ve had to do it with speed. But now it’s time to look to a third stage, beyond COVID. Here, I think you will see a transition away from brick-and-mortar retailing, and a need for workforces to accommodate that shift.”

Other observers agree with Reeve.

“Incorporating AI into the retail world can synchronize digital and physical shopping streams and empower flexibility in logistics networks,” reported Analytics Insight. “Implementing AI solutions in retail can seem daunting, yet it is not. Instead, it leads to a broader return on investment… Now, when speed and communication are the drivers, customers are looking for … a frictionless and less chaotic interaction next time they step out to shop or buy groceries. Hence, it is high time retailers put on the shoes from [the] consumers’ perspective and approach the path of AI.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.