(Hint: It has Nothing to Do With Technology)
Supermarket AI has not only arrived, it’s everywhere. Grocers are already using AI to stock their shelves more efficiently, optimize pricing for products on shelves, and make sure shoppers can easily find the products they want.
If you’re a grocer, odds are you’ll be deploying artificial intelligence in at least one area of your business this year. When doing so, here’s one common pitfall that retailers fall into: overlooking the collaborative aspect of AI.
H. James Wilson and Paul Daugherty are co-authors of HBR Press’ Human + Machine: Reimagining Work in the Age of AI. Together, they studied over 1,500 companies and discovered that the biggest performance improvements came when organizations focused on human/machine collaboration.
So what are businesses sacrificing when they don’t give collaboration they attention it deserves while implementing AI? Wilson and Daugherty found that companies with a collaborative setup created outcomes “two to more than six times better” than those who had humans and bots working separately.
One such company is BMW, maker of “the ultimate driving machine.” The automaker once positioned industrial robots on one side of the factory, with humans working on a traditional automated assembly line on the other. When they tested bringing their robot and human workers side-by-side, they outperformed both all-human and all-robot teams and reduced human idle time by 85 percent.
Supermarket AI holds a great deal of promise. Grocers face a myriad of challenges unique to supermarkets. Walmart and Amazon have a chokehold, contributing to razor-thin margins. Shrinkage is a war with three fronts (shoplifters, employees, and spoilage). With the industry-wide push to serve online grocery shoppers, store managers have to maintain 40,000+ SKUs and pull double duty as fulfillment center managers.
AI has the potential to help grocers overcome many of these challenges. Here’s a look at what some grocers are doing with AI deployment, and what’s working (and failing) when supermarket AI arrives in stores.
Marty vs Freddy: Same Same, But Different
Walmart and Food Giant both introduced AI-powered robots into their stores recently. Food Giant deployed the googly-eyed ‘Marty,’ a bot that uses the same deep learning technology behind facial recognition. Marty alerts store associates to spills and hazards in the aisles, finds holes in the shelf, and performs price checks. Walmart’s autonomous “Auto-C” floor scrubbers, on the other hand, use artificial intelligence to collect information about the store environment, scan for obstacles, and adapt to those surroundings as they scrub floors.
Reactions to the robots have been mixed, less so because of how each robot behaves, and more so because of each’s retailer’s method of deployment. Food Giant, for instance, undertook a massive education and training initiative to ease the pain associated with transitioning to the new technology. This reportedly included retraining store associates and shifting their focus towards customer-facing efforts.
Walmart’s deployment got off to a rocky start, as covered by the Washington Post. Workers at a Walmart Supercenter in Marietta, Ga., symbolically named the robot ‘Freddy’ in honor of the janitor who was let go shortly before the Auto-C was introduced. Some workers felt Freddy deprived them of tasks they previously enjoyed. Others felt the burden of of training and even babysitting their new robotic counterparts. The “confusion” and “alarm” reportedly extended to shoppers who didn’t quite know what to make of Freddy.
Like it or not, the modern human identity is inexorably tied to work. So much of who we are is linked to what jobs we do. AI is a powerful technology that changes the way we work, and in some cases, replace the people we work with. Therefore it’s crucial that retailers tailor their messaging to show that although AI will change the way associates work, it won’t diminish their worth.
The jury is still out on the financial and operational impact of both of these robots. However it’s clear that in order to effectively deploy AI in the collaborative manner prescribed by Wilson and Daugherty, retailers need to focus on two key areas: communication and training
Heinen’s and CB4: AI Finds Patterns, People Fix Problems
Cleveland-based grocer Heinen’s recently deployed an AI tool their store managers use to increase sales and improve the customer experience in their stores (disclaimer: CB4 made this tool). Heinen’s feeds their basic POS data into CB4’s AI algorithms to identify store-level demand patterns. Once the tool gets a snapshot of demand patterns for SKUs in each store, it sends store managers in-app alerts when a SKU that’s in high demand is underselling.
From there, CB4 passes the baton to Heinen’s store managers. Armed with knowledge and experience, they walk their floors to uncover (and fix) issues that are obstructing sales. Perhaps a price sticker was missing. Perhaps a vendor was out of stock in the item. Perhaps the fresh department never produced the item that morning to begin with. To close the loop, Heinen’s store managers fix the problem and send their feedback in the app. Machine learning means their feedback helps the algorithm learn and drive more revenue over time. The technology itself gets smarter and drives more revenue every time it teams up with a human worker.
Good Tools + Good People = Great Results
Supermarket AI is an incredibly powerful technology, with vast operational possibilities from inventory management to loss prevention. However, it’s important to remember that AI is a tool for people. For retailers looking to fully reap the rewards of AI going forward, it’s critical to instill a collaborative mindset in and properly train the humans who are using AI based tools.
While Heinen’s, Walmart, and Food Giant apply supermarket AI in different ways to improve the experience in their stores, the symbiotic relationship between store associates and their AI helpers have the same foundation. Store associates are more effective when armed with AI that can rapidly price check thousands of items, inspect floors, and scan 50,000 square feet of shelves. Freed from grunt work, associates can focus on customer-facing tasks where the human touch is sorely needed.
We’ll close with some prescient words for executives looking to harness the power of AI, from a 2018 interview with Daugherty :
“It is imperative for business leaders to figure out and put in place new learning platforms and training capabilities so that people are ready for this. Because if the people aren’t ready for AI, I think we will have some issues in business and in some communities.”
Read our case studies about how store staff uses CB4 to boost customer experience and drive sales at Associated Food Stores and Heinen’s.