Supermarket chains are focused on leveraging data analytics and artificial intelligence (AI) to improve processes and customer experiences according to two recently released research reports.
“Leaders are accelerating investments in many existing solutions and experimenting with new opportunities,” reports the FMI in their 74th annual The Food Retailing Industry Speaks analysis. The FMI notes that “85% of retailers were experimenting with new technologies to improve the customer experience” and that “62% of retailers are making use of data analytics to optimize pricing and promotion and assist with assortment planning and replenishment” in 2022.
Planalytics’ work with grocers to systematically address the ever-changing impacts of weather in planning and replenishment fits in with these findings, as companies are increasingly looking to incorporate key external demand drivers to improve on-shelf availability and create better shopper experiences.
The FMI (also known as the Food Industry Association) reports that grocers set aside over $13 billion for technology budgets last year and that 83% “expect their technology expenses to increase in 2023, with 23% anticipating that they will increase a lot.” Where are grocers investing? The FMI highlights three priority areas for new technologies: improving the customer experience (85% of retailers in 2022), increasing efficiency (84%), and Ecommerce (67%).
RIS News and Progressive Grocer’s 8th annual Grocery Tech Trends Study reveals similar findings reporting that “more than half of those surveyed (57%) expect their tech spending to increase in 2023.”
The study says that “grocers anticipate spending more on store operations, namely in the areas of data analytics… And on the side of analytics, the more they can invest in areas like inventory management and demand forecasting, the better they can deal with the pesky out-of-stocks issue that continues to show up in brick-and-mortar and online retailing (our consumer survey confirms that this is a top-of-mind issue for shoppers too). They’re also looking into emerging technology to help: Thirty-one percent of those surveyed are planning to add artificial intelligence/machine learning for demand forecasting in the next year and a half.”
The FMI research indicates that 62% of grocers are using data analytics in assortment planning and replenishment and 15% have started to incorporate AI.
Planalytics is helping leading retailers use predictive Weather-Driven Demand (WDD) analytics to optimize forecasting and replenishment. By staying a step ahead of weather-based purchasing shifts, grocers are better aligning store-level inventories with demand and enhancing the shopper experience by limiting out-of-stocks. WDD analytics utilize a combination of proprietary statistical and AI/ML techniques to identify localized relationships between the sales for specific products and the weather. Businesses incorporate WDD calculations into AI/ML environments, demand forecasting solutions, and data warehouses/lakes. Learn more about Weather-Driven Demand for inventory optimization & replenishment.