Skip to main content

EXCLUSIVE: 3 Big Trends Affecting the Future of Grocery

Progressive Grocer chatted with GDR’s Kate Ancketill and Rachel Wilkinson at NRF 2024 about Consumer Guardianship, Empathic AI and Reality Check
GDR Kate Ancketill Rachel Wilkinson Main Image
PG spoke with (left to right) GDR's Rachel Wilkinson and Kate Ancketill at NRF 2024: Retail's Big Show.

A highlight of the recent NRF 2024: Retail’s Big Show, presented by the National Retail Federation at New York City’s Jacob K. Javits Center Jan. 14-16, was a session featuring Kate Ancketill, CEO and founder of GDR, a London-based “business futurist consultancy.” During her ninth annual keynote address at the trade show, “Modern retail is rocket science – how can we deal with the complexity?,” Ancketill engagingly set forth three big trends affecting retail: 

  1. Consumer Guardianship, replacing ownership of products as consumers increasingly want the option to buy new or used, rent, subscribe, or sell products.
  2. Empathic AI, offering unscripted generative artificial intelligence conversations between people and emotionally intelligent AIs, who can serve as “co-pilots” or personal assistants for consumers. According to Ancketill, every person and every brand will have their own AI in the near future.
  3. Reality Check, when, in a rapidly advancing post-truth era, during which members of a society no longer agree on what is and isn’t true, people will increasingly seek out authentic physical experiences enabling them to interact with others.

[RELATED: “2024 Grocery Innovation Outlook”]

Following her Jan. 15 session, Progressive Grocer sat down with Ancketill and GDR Managing Director Rachel Wilkinson for some additional insight into how these trends are playing out in the grocery channel. The following conversation has been condensed and edited for length and clarity.

Progressive Grocer: Starting with first trend you highlighted, Consumer Guardianship, you mentioned the reusable stainless steel packaging from Berny Pack that the French grocer was using. Have you seen other examples of that kind of circular sort of consumership also emerging at grocery? We’re at the very, very beginning of that in the United States. It hasn’t really caught on quite yet. 

Kate Ancketill: The obvious answer to that is refill of many dry goods in particular, which all the big grocers in the U.K. have been trying, sometimes more successful than others, because it’s not without its problems operationally, but I think everyone keeps flogging away at it because they want to make it work. And there are a lot of independent refill stores that are outside of the larger grocery, which become nice community hubs. They tend to be places for people to gather and engage and be activists of the community. I think that it’s probably starting quite slow, but we probably will move further in the direction of both refill aisles and also packageless aisles where there is no packaging at all, other than perhaps recyclable paper and cardboard. We’re seeing that in some places like France, also the Netherlands and Sweden – the Nordics basically – and northern Europe, they tend to be ahead.

PG: Most definitely. 

KA: And I suspect it’s not driven by pure profit; it’s driven by the decision to do the right thing and try to do more with the circular economy. I mean, we have covered [recycling-packaging company] Loop. It doesn’t seem to have had a massive effect. 

PG: Yeah, we’ve covered initiatives like this in the United States, and they seem to have limited impact. I would say they’re more or less preaching to the converted. They’re usually in place at the kind of retailers that already have people who bring their own bags and all that kind of stuff.

KA: And in the U.K., it was very expensive, much more so than regular shopping or regular packaging. I think when things will really take off is when people start getting paid to do it. So, deposit return schemes, basically. That’s going to be the game-changer.

PG: Do you think there’s any sort of generational change involved as the younger consumers become even more passionately interested in the environment and actually try to live a greener life? Do you think this will help with adoption when these people become earners in a meaningful way? 

KA: Yes, basically, I think that Gen Z is definitely much more focused on contributing to the planet's health in a more active way in making choices. I think now Gen Z have the capability to research the holistic process of a retailer or a supplier and make much deeper research choices than ever before. I think then whilst Millennials and Generation X might be activists, when it came to them actually paying for organic or recyclable content, they wouldn’t necessarily actually do that. So yeah, most Gen Z do make different choices from the outset. They just will refuse to buy that brand. Have you come across an app in France called Yuka?

PG: No. What does it do?

KA: That is very interesting. It’s been around since 2017; essentially, it’s a barcode scanning app. It works with personal care and food, and it tells you whether there are nasty additives that don’t need to be there. But it also now has a new additional layer which is about the footprint of the items that you’re scanning, and it’ll make recommendations to have a healthier alternative or more eco-friendly alternative. The reason it has hit our radar again recently, because we covered it back in the day, is that it has now started to force change amongst grocers, so [French grocer] Intermarché has changed 900 items of its own label of products and food in response to the pressure from Yuka. I think 96% of people who use Yuca do change their purchase decisions as result of things it tells you buy.

There’s been an antitrust lawsuit against Yuka, to try and shut it down by the big corporates, and they came through and they’re sort of fighting that David-and-Goliath fight on behalf of the consumer. And so, I talked about this earlier today with the CIOs, saying this is a really good example of truth and transparency and the small guy fighting for the rights of the consumer.

[Never miss a story sign up for Progressive Grocer's FREE Daily newsletter]

I think younger people just have a better understanding how to access these kinds of apps, which go around like wildfire. Whereas I personally think young people are quite often more demonstrative than they are truly taking action. They like to demonstrate their virtue, but when it comes to paying more, going out of their way or carrying a carrier bag with them, rather than just getting a new one each time, I don’t think the young actually have as good a record as older populations, who just tend to be more conscientious. But they certainly do claim to wish to see brands that they’re participating with to at least be making the right move.

PG: At least some of that, if we get into motive, is it’s the fashion, if you will; it’s people who want to be on board with the same things their peers are on board with. I’m sure there’s plenty of performative behavior. 

KA: There are definitely elements of that. The other reason is older people tend to have more disposable money, and so they can actually make those sustainable choices. They can afford to make those sustainable or organic choices. So, I think if the younger consumers could, more would.

Advertisement - article continues below
Advertisement
NRF 2024
Examples of how AI is approaching a human-like level could be seen throughout NRF 2024.

PG: That makes sense. As for the empathic AI, that was amazing, the idea of how much that technology has grown, that it really is approaching human-like levels. Have you any intelligence on how the grocery channel is using AI?

Rachel Wilkinson: There’s a very interesting company, and they have implemented an AI assistant that looks initially like it’s a digital screen, like a virtual assistant. How they’re using it is a bit like your favorite shop assistant, your trusted store assistant. It’s used by the store manager to inform customers on promotions, where they should go. It will help them deliver recipe ideas. So if someone says, “I’ve got 10 pounds, I need to buy a meal for my family tonight, what do you recommend?,” It will literally take you to the aisle. It looks like a person, a real person. And when they set this up, they scan the entire store so that it has a knowledge of the aisle, every single product within that store. And then when someone asks for something, it knows exactly what product and it has all the information about that product.

[RELATED: EXCLUSIVE: At CES 2024, What Retailers Need to Know About AI"]

The store managers are using it to keep an eye on what’s happening in the store and to monitor the questions, so it knows what its customers are interested in and not interested in; it’s collecting data. It’s quite useful for the buyers as well to negotiate with their vendors. So it’s very much like a front-end and a back-end AI system. It’s almost like the eyes and ears of what’s happening in the store. And, of course, in a grocer where lots of people come and go, and staff don’t tend to stay very long and retention’s very low, it will almost be the champion, kind of a right-hand AI man.

KA: It’s that co-pilot thing, isn’t it? Obviously, Microsoft has adopted that phrase, “co-pilot for your Microsoft Office 360,” but it’s an obvious choice of word. It’s what everybody needs, isn’t it? Everyone needs a co-pilot to get their kids booked into all their clubs after school and organize schedules. To pay the utility providers and constantly remember to insure the car and manage emails – it’s far too complicated. I’m reasonably tech savvy, and yet I find the complexity of modern life difficult. I can’t imagine how tricky life admin must be these days for the less techy among us.

PG: They are tapping into a real need. You laid out the forces driving this particular trend, and they seemed really on point. I did see a few virtual assistant-type things made to look like people. I don’t know whether it’s a generational thing or just an individual thing, but I find them a little creepy. 

KA: I think that’s true. I think everyone finds them a bit creepy. It’s the uncanny valley. 

RW: Kate was talking about [AI personal assistant] Pi, which has a natural voice that really sounds like a real person. And I think the computer imagery and CGI is now coming so fast, when you can merge the two. It’s actually not going to be creepy then. I think we’re so close to that. Even in robotics, the hyper-real robotics are now incredible, but they just need to merge that with the AI as well. When they all come together, it’s going to be so much more acceptable. At the moment, it’s slightly off, because you look at them and you think, oh, that’s just really weird. The one I was talking to you about, she looks slightly angry, so they’ve got quite good functionality, but maybe she doesn’t look quite right just yet, but I don’t think we are far off.

PG: I can believe that, because it’s already advanced this far.

KA: When you think of how fast ChatGPT has changed, the speed of change now is what’s exciting. 

PG: Speaking of that, I saw a vendor in the [NRF] Innovation Lab, and they had a solution where they collected all of this information on a product, all of this background information so that people, if they put it in a search engine, they could pull up all of this information. In order to create this collection of information, the vendor used AI, but they said they specifically fed the AI engine things like users’ manuals and other accurate information to eliminate, as they called it, “hallucination.” That’s one of the things people who are against AI are afraid of, that it makes up things because its information is based on all of the internet, which has plenty of misinformation. 

KA: It does totally make sense, doesn’t it? If only 1% of the world’s data is actually on the internet, because most of it’s behind firewalls, it does totally make sense that each business would take a LaMDA 2-type model, a large-language model that is off the shelf, and then configure it to their own vertical data sources, which are more accurate, more appropriate to their particular subject. I think that’s obviously going to be the way to go. 

PG: So, the third trend was creating immersive experiences in real life. In stores, have you seen any good examples of grocers who are able to do that?

KA: I think there was a division between pre-COVID, when that was pretty hot with lots of higher-end supermarkets, which were moving in the direction of, “We’re a cooking show and we’re a bar, and we’re a restaurant at night.” They were everything the community wanted: tuition and kids’ creches and yoga and all. Then COVID sort of shut that all down, didn’t it? Then it was all e-commerce. And I think now we’re on a sort of slow trajectory to start to find a new idea of what does experiential grocery shopping look like. And I don’t think it’s yet back to where we were before. 

Honestly, I think there’s so much great technology you can implement into the grocery retailers. I wonder what’s holding retailers back from doing some major innovations. It’s not so much in store, though, is it? It’s the quick delivery. That’s a major innovation convenience. But yet you go to most supermarkets these days, and it’s still the same.

[Read more: “Are You a Retail Tech Innovator?”] 

NRF 2024
Rachel Wilkinson questions if the grocery technologies available today are doing a good job of integrating with each other to ensure a seamless experience.

RW: It’s the same as it was when I was a child, quite frankly. I think one of the things that struck me was the need to integrate with different types of technology, because you’ve got the AI supportive assistants, now you’ve got smart carts, you’ve got e-comm, you might have voice in the home. The bit that’s missing is the integration of them all together to make that a seamless experience.

I feel like this is a model that needs to be shaken up and transformed. Someone needs to transform the way people actually shop for food now, because the aisles have not changed in 30, 40, maybe 50 years now, and it’s time. People don’t shop online like that anymore, yet we all still have to go up and down the aisles in a very irritating way. 

PG: Right, exactly. 

KA: When you look at what Amazon is doing in the back of their warehouse to automate picking and packing, you wonder why that’s not happening in a supermarket. Why am I still walking up and down that aisle? Why isn’t there a back-end robot who I’ve fed my shopping list to that just appears with my groceries, and I make a choice of the things I want to go and look at, but maybe there’s an automated element of it. It just feels like the intelligence is there, but it’s not in use. 

RW: There’s something like that in France, isn’t there? Where you’ve got the drive-thru for boring stuff, and it’s already prepackaged for you, but then you get out of the car and you go into the interesting bit, which is the wine, the deli, the touchy-feely, and that might be because in France, they want to go and see more than anyone else, more than any other culture. They want to smell it. They want to talk to someone about the “why.” They really want the experience of food. It’s not transactional. I think that’s where you can bridge the e-commerce speed, convenience and transaction with that sensory delight, but do it in a much faster way so you don’t have to spend hours and put children through the nightmare of 55 aisles. Nobody wants to do that anymore.

PG: I think maybe one of the factors, in the United States at least, is that grocers tend to be fairly conservative in terms of their outlook, and I think they’re always worried about throwing too much at the customer and changing things around. There’s a certain kind of customer that, when the store does a layout change and suddenly the canned peas are in another aisle, they have a meltdown. They’re sort of marketing to the idea of: “This is my comfort zone. I know where everything is.” And maybe they’re kind of afraid to start rolling out that kind of technology. Maybe they’re afraid of alienating more people than they would attract. 

RW: I think we are just past that level now, because e-commerce and the pandemic did change the way we shop, the way we consume goods; subscription models accelerated and people are just doing things in a different way now. And I think ignoring that will end up putting those traditional retailers on the back foot and they’ll miss the opportunities, because in other areas, technology is driving a change, and unless grocery catches up, they will remain behind. 

PG: I think there are inroads into that among grocers. Then there’s the old-school example of experiential, less dependent on technological solutions, and more like: “Oh, let’s have fun. This is a fun place to work.” Or when they have those open counters so you can see the meat cutter at work, that kind of theater. 

KA: Yes, we’ve been getting rid of all that stuff in the U.K. Sadly, most of the higher-end grocers have been getting rid of the meat and fish counters. No human beings behind a counter ever, because they just weren’t making the money per square foot compared to just chilled aisles. The ones that had that differentiating factor, they’re literally all the same now, and it’s a huge issue for them.

A different version of experiential that is very successful, even post-COVID, is at the big discounters like ALDI and Lidl, and the way they make it exciting, Lidl-style, is having the “Middle of Lidl,” which is probably the most extraordinary configuration of things that you didn’t know you needed. I never don’t buy something in the Middle of Lidl, and it’s always something I had no idea I needed. That is a sort of hunter-gatherer gene that gets turned on in the human shopper when they go down an aisle where they know they’re going to find fantastic bargains or things they didn’t know they needed or didn’t even know existed.

RW: That’s the element that’s missing that shouldn’t be missing within a food retailer. If there was ever a category where you want to hunt and gather and smell and touch and taste and try, it’s food, and yet it’s become the most sort of – what’s the word? – tasteless. Literally tasteless. There’s nothing to tempt your senses at all. You don’t smell anything; you can’t taste anything. It just may as well be online.

Advertisement - article continues below
Advertisement
X
This ad will auto-close in 10 seconds