EXCLUSIVE: 4 Reasons for Retailers to Embrace GenAI

Progressive Grocer talks to Amazon Web Services exec about moving at the pace of possibility

4/4/2024

In addition to leveraging technology in its own Amazon Fresh stores, the company's AWS business helps others tap into the power of AI and GenAI.

At the recent Food Marketing Conference (FMC) at Western Michigan University, Justin Honaman of Amazon Web Services (AWS) kicked off an opening session in a packed house. The head of worldwide retail and global consumer goods go-to-market at AWS, Honaman stressed the importance of being guided by a vision, working for the company’s customers and their customers and not waiting around to see what technologies like Generative AI can do.

Later, Progressive Grocer caught up with Honaman to explore some of his suggestions in more detail. According to the tech expert, just over a year after GenAI become part of the collective lexicon and surfaced as a priority among executives, retailers and CPGs are already getting results from their early embrace of the solutions. “The advancements are moving quickly, and there are a number of our customers in this segment (grocery) who are testing and trailing new Generative AI capabilities,” he told PG.

There are other reasons to move forward with such technologies, he added:

It’s intuitive: GenAI technologies are accessible and fairly straightforward to navigate, depending on the application. “This isn’t just an IT thing. My encouragement to business leaders in store operations, allocation, planning and marketing and other functions is to test it out,” he said. “I’m in our tools every day, trying different things. There was no six-week training for me – it’s very easy to learn.”

If not now, when? Honaman said that the pace of advancement continues to pick up, opening up avenues for growth that could be crucial at a time of tight margins. “Last year, from March through August, we were meeting with CEOs, CMOs, heads of supply chains and boards every day about this. Coming up on one year later, there are very real and tangible results. The retailers that lean in now will be ahead in a year from now,” he pointed out. “You can choose to be a late adopter, and for some, that may be what they want to do. But the development of the technology isn’t slowing down and the quality of the output is improving.”

Applications abound in grocery: In his FMC session, Honaman shared several examples of how these capabilities can be leveraged by CPGs and food retailers. “I think grocery has some interesting use cases, like around planograms – what products should be on shelves and how they should be priced. There is also experimentation taking place around food recipes and what food products match with shoppers in particular stores and locations. There’s a play in loyalty, too,” he said during a follow-up interview, adding that technology can also enable wayfinding in stores to make the shopping experience easier for people. In addition to deployments at and for the physical store, forms of AI continue to enhance e-commerce experiences, whether in order fulfillment or the potential of curating items in live streams.

Pivoting is natural: Honaman pointed out that experimentation is part of the learning curve, acknowledging that Amazon and AWS take their own learnings and make changes. “Some things haven’t worked out,” he noted.

That was evident just this week, when reports emerged that Amazon Fresh stores are moving toward Dash Cart technology for seamless checkout, rather than the Amazon Just Walk Out technology that had been deployed to some fanfare.

Amazon spokesperson Jessica Martin addressed that change in a statement shared with PG: “We’ve invested a lot of time redesigning a number of our Amazon Fresh stores over the last year, offering a better overall shopping experience with more value, convenience, and selection — and so far we’ve seen positive results, with higher customer shopping satisfaction scores and increased purchasing. We’ve also heard from customers that while they enjoyed the benefit of skipping the checkout line with Just Walk Out, they also wanted the ability to easily find nearby products and deals, view their receipt as they shop, and know how much money they saved while shopping throughout the store,” she said. “To deliver even more convenience to our customers, we’re rolling out Amazon Dash Cart, our smart-shopping carts, which allows customers all these benefits including skipping the checkout line.”

Seattle-based Amazon is No. 2 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named the company to its Retailers of the Century list.