Preparing for Entertainment-Infused Grocery Retail
Q&A with Abhijit (Abhi) Vaidya, Associate VP and Strategic Business Unit Head for Grocery Retail at Cognizant
With over 25 years of experience, Abhijit (Abhi) Vaidya is an associate VP and strategic business unit head for Grocery Retail at Cognizant, an IT and consulting firm helping companies modernize technology, reimagine processes and transform experiences.
Progressive Grocer recently talked with Abhi to dive deeper into tackling grocery-specific challenges, the role of generative artificial intelligence (AI), how to build on omnichannel momentum, and more.
PG: What are some current challenges in the grocery industry, and how can grocers effectively meet shoppers’ needs to maintain their loyalty?
Abhi: First, consumer expectations are shifting. Traditionally, grocery stores were transactional, but today that is shifting to become more experience oriented.
Next, leveraging generative AI to analyze consumer data and recommend products, recipes and meal plans aligned to consumers’ health and wellness goals builds loyalty by providing educational resources and data-driven recommendations.
That said, grocers are interested in optimizing hyper-personalization efforts and improving the customer experience across in-store and digital formats.
PG: What role will generative AI play within grocery?
Abhi: Industry experts estimate generative AI to deliver more than $1 trillion in annual growth by 2032. Here are three ways grocers are using generative AI to drive innovation:
- Product search and discovery. Grocers can recommend healthier options, such as gluten-free products, to diabetic shoppers searching for bread on a mobile app. These recommendations are tailored to consumers’ unique dietary preferences and past purchases to create a health and nutrition profile that grocers can use to suggest products.
- Labor and demand management. Grocers can leverage insights to analyze historical sales data to predict demand for specific products and optimize inventory levels, reducing stockouts, minimizing waste, and optimizing the supply chain.
- Shopping smarter. Grocers can use generative AI to personalize options for customers such as recipes and meal plans, as well as delivery options. For example, grocers can give customers the option to pick up a product from a nearby retail store or offer to deliver an item via third-party delivery services when an item is out of stock or unavailable online.
PG: CEO Vivek Sankaran reinforced in Albertsons’ latest financial report that “there is reason for optimism in the omnichannel.” Why is there excitement around omnichannel, and what can grocers do to build on this momentum?
Abhi: We have seen grocers like Kroger and Albertsons increase delivery sales over the last year, and Walmart’s digital sales have surged 21% in Q1 from in-store-fulfilled pickup and delivery, and marketplace segments.
Thus, grocers are focused on unifying the digital and physical store experience to remove friction and allow consumers to shop more fluidly. A robust omnichannel strategy should:
- Be convenient: Empower customers to choose how they want to shop with flexible shopping options.
- Improve inventory: Optimize visibility into inventory to reduce food waste, and improve operational efficiencies.
- Include personalization: Make informed decisions to optimize marketing, assortment, pricing and promotions.
- Increase revenue and loyalty: Create multi-channel touchpoints to encourage shoppers to spend more money, more frequently, and across different channels.
PG: What will grocery stores look like in the future? How can grocers set themselves up today to better prepare for it?
Abhi: Grocery stores will be more experiential and community oriented. They will infuse themselves with other entertainment channels to make their shopping experience more memorable and engaging.
To prepare for this shift, grocers should consider partnering with other entertainment vendors to create a ‘one-stop-shop’ for consumers. Whether it’s bringing customers together for community events, such as sporting, live music, or wine tastings, grocery stores should continue to find ways to put the community at the center of their customer experiences.
