The growth of AI in grocery will have its limits

Artificial Intelligence (AI) has taken hold in the most mundane task—grocery shopping. Big box retailers are amping up their efforts to harness AI to connect with their shoppers. But what about the mom-and-pop grocer or the independent regional supermarket that prides itself on winning over grocery shoppers on the physical level?

ChatGPT, an artificial intelligence chatbot, came out less than a year ago, and AI has roots that span decades. But there are independent grocers who have spanned over a century—without the use of either. And their doors are still open welcoming shoppers thanks to human interaction, which provides something AI can't—emotional connection.

Market Basket, owned by the over 100-year-old Demoulas Super Markets which operates over 85 stores in four New England states, toppled the no-frills German discount grocery chain Aldi as top grocery retailer for inflationary times, according to a special edition of its Retailer Preference Index (RPI) released last September by the data science firm dunnhumby.

“Market Basket has shown itself to be the best performing retailer in these times of economic uncertainty, by being the best in the country at saving customers money while simultaneously building stronger emotional connections with their shoppers and thereby increasing their shopper visits faster than most other retailers,” said Grant Steadman, president of North America for dunnhumby.

And what is even more interesting about Market Basket is that it has no self-checkouts, despite the ongoing demand for this grocery retailer to exist in the up-and-coming dominant AI world.

Market Basket, like many other independents, is navigating with success. The East Coast-based grocery retailer is now hiring for its upcoming new store that will soon open in North Conway, New Hampshire.

So, is there a tipping point?

Obviously, independent grocers should focus not on challenging technology but on recognizing the strengths that have kept their doors open. And that begins with customer connection. People are wired for community and human interaction. And for now, AI is incapable of replicating human interaction on the emotional level. Man versus machine will always be challenged.

Going forward, grocery retailers, especially in the independent space, need to continue to provide that genuine human interaction that only they can do so well. Success going forward perhaps should include the following concept: Phygital, which combines the physical and digital worlds to harness the power they both provide.

According to a report by data analytics firm Grocery Doppio, the use of AI in grocery stores is set to grow by 400% by 2025.

These numbers are telling and convey an important message for grocery retailers. AI will connect grocers to their shoppers, but it won’t replace the ultimate connection—humans.