At a Crossroads: Progressive Grocer's 90th Annual Report
Would it shock you to learn that this annual report was written by ChatGPT? Of course it wasn’t, but the significance of the artificial intelligence (AI) chatbot can’t be overstated, especially when it comes to its influence in the grocery industry. Intelligent chat is about to revolutionize an industry that’s already in the throes of epic transformation.
In March, Instacart said that it would add OpenAI’s ChatGPT chatbot technology to its grocery delivery app, joining a growing list of companies that are turning to the human-like AI language tool. Instacart will use the chatbot to power a new search engine designed to respond to users’ food-related questions, such as asking for recipe ideas and ingredients, or healthy meal options. By tapping ChatGPT’s language software, the search engine’s responses will come in the form of a dialog, rather than a list of search engine results. Instacart expects to roll out the new feature, called “Ask Instacart,” later this year.
Meanwhile on Twitter and TikTok, U.S. consumers are putting ChatGPT to work as a personal assistant that’s able to find the best deals, discounts and fulfillment options for groceries. ChatGPT-generated recipes, meal plans and grocery lists are going viral. One TikTok user, Mellyssa Viele, posted a video about how she used ChatGPT to create a diet-specific seven-day meal plan that’s endometriosis-friendly and good for hormone imbalances in women, as well as helping reduce inflammation. ChatGPT was quick to fulfill Viele’s request, whittling down the meal plan each time she asked for something new, such as keeping each day under 1,700 calories or incorporating snacks.
Technology such as ChatGPT, or its competitors, which include Google’s Bard or Microsoft’s Bing, holds much promise for the grocery industry, which is under tremendous pressure to keep shoppers loyal, cut costs and generate alternative revenue. Progressive Grocer’s 90th Annual Report and The PG 100 ranking of the top food retailers in North America show that the nearly $3 trillion highly competitive grocery industry is at a crossroads, facing extraordinary challenges on various fronts, including expenses, labor, supply chain and profits. Optimism about the grocery retail climate has fallen among executives over the past year in the face of continuously rising costs. In addition to expense pressures, retailers are worried about labor issues (wages, recruitment and retention); supply chain disruptions; and ever-increasing competitive threats from discounters and online players.
At the same time, how consumers work, shop and eat has completely changed since COVID. Shifts toward online grocery shopping and remote work are having far-reaching societal implications, and the consequences are disrupting nearly every aisle of the grocery store.
To thrive over the next year, grocers will need to focus on cutting costs, maximizing efficiencies and improving customer loyalty with technology. Specifically, emerging technology such as intelligent chat and other personalization tools will be key to customer loyalty in the future. If the retailers listed in The PG 100 want to emerge in a better position a year from now, they’ll need to focus on the 12 imperatives for thriving in an era of change, as detailed below.