In response to strong demand — Nielsen notes that the number of meal kit users increased by 36 percent over the past year — large grocery chains are already getting in on the act. Kroger purchased meal kit maker Home Chef. Albertsons owns Plated. Publix has Aprons, a department offering recipes, cooking classes, demos and event-planning services, in addition to in-store meal kits. In doing so, all of these supermarkets are acknowledging that the line between meal prep services and traditional grocery are blurring.
The future will belong to grocers that take advantage of their data to own the space. Data is what drives innovation, which is why so many grocers keep a wary eye on online retailers like Amazon. But grocers have a unique opportunity to beat online retailers at their own game by adopting an AI strategy now, while they still have access to data that online retailers don’t yet have. Chains that are disrupting the meal-kit market are only scratching the surface of what’s possible.
With manual data analysis, it’s possible to come up with a few meal concepts that will likely do well in a region. With AI and machine learning, grocers can access enormous data sets that enable them to personalize offerings with pinpoint accuracy, building a stronger relationship with customers. Grocers not only gain incredibly valuable insights into what customers want, they can also identify emerging trends and optimize inventory by location, which is particularly valuable in a low-margin sector like grocery.
But to fulfill their role as disruptors, grocers should adopt an AI strategy sooner rather than later. Right now, they have access to data that larger competitors don’t have. And the beauty of AI and machine learning is that it gets smarter over time, so the quicker an AI strategy is implemented, the more rapidly it can create scalable business impact.
Grocers that integrate AI into their business strategy now can grow their wallet share today — and prevent customer loss to online retailers in the future.