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Grocers plan to increase AI spending by 400% before 2025

Artificial intelligence to drive $113B in value for grocers

Alarice Rajagopal, Contributing writer

June 27, 2023

2 Min Read
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Consumers are impacted by the technology as shown through the majority of grocery sales in 2023 that were digitally influenced through discovery, inspiration, order, pickup, wayfinding, coupons, etc.Kroger

TOP TAKEAWAYS

  • 69% of all 2023 grocery sales were digitally influenced

  • 73% of grocery executives say competition will increase heading into 2024

  • Grocers expect to increase their AI spending by 400% before 2025

Artificial intelligence has been leveraged within the grocery industry for some time now, but the latest joint report from Grocery Doppio, FMI—The Food Industry Association, and Wynshop has put a number to that statement: The new report says AI is set to deliver $113 billion in operational efficiency and new revenue opportunities by 2025.

The data shows that grocers are expected to increase their AI spending by 4x over the same time period. Also by 2025, 73% of grocery technology executives expect AI capabilities to be embedded in most or all of their technology software. 

Consumers are impacted by the technology as shown through the majority of grocery sales in 2023 that were digitally influenced through discovery, inspiration, order, pickup, wayfinding, coupons, etc. 

"Shoppers today are redefining value and finding it goes beyond just price to include quality, relevance, experience, and convenience," said Doug Baker, vice president of industry relations at FMI.

But adoption doesn’t come without its challenges, as grocers face some shortcomings with AI: 

Related:Kroger enlists artificial intelligence to cut down self-checkout errors

  • 71% budget availability

  • 69% proof of performance/unclear ROI business case

  • 63% limited infrastructure (poor data or tools)

What’s more, only 28% of grocers express confidence in effectively using AI by 2025. Other obstacles noted include talent scarcity (9% of grocers have the analytic talent

to meet their future needs) and a lack of a defined strategy. 

“Culture emerges as a significant impediment, with grocers relying more on intuition than data-driven decision making,” according to the report.

The top three use cases for grocers include:

  • Supply chain at 83% including inventory forecasting and optimization, warehouse automation and robotics, and logistics optimization

  • Merchandising at 81% including pricing and promotions optimization, assortment optimization, and planogram optimization

  • Marketing at 72% including personalized offers/recommendations, customer churn, and content supply chain




 

About the Author

Alarice Rajagopal

Contributing writer, Supermarket News

Alarice Rajagopal is a contributing writer for Supermarket News, which delivers the ultimate in competitive business intelligence, news and information for executives in the food retail and grocery industry. She has over 10 years of writing experience covering the consumer goods business and technology industry. Alarice has also written for a variety of other industries and content areas over her editorial career including retail, cyber security, hospitality and marketing/product marketing for the B2B space.

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