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The AI revolution in grocery
5-MINUTE READ
April 10, 2025
AI heralds a fundamental shift
Every major technological shift has created winners and losers. From the rise of the internet to the smartphone boom, companies that failed to adapt faded into irrelevance.
Today, we stand at the next inflection point with the rise of generative and agentic AI. This technology is transforming industries at an unprecedented pace, and in retail, it is reinventing how people shop, how businesses operate and how employees work.
The urgency for retailers—and in particular grocers—to adopt AI is paramount, given they generally operate with lower margins in a highly competitive landscape. Any delays could set companies back significantly against their competition. This blog post outlines the key phases in the AI journey and explores new opportunities that will be made possible due to AI.
75%
of retail executives view generative AI as instrumental to their business’s revenue growth.
93%
of retail CxOs are planning to scale up their investment in AI and generative AI over the next 3–5 years—in terms of time, money, and human capital.
50%
of all working hours across retail have the potential to be impacted by generative AI.
The AI journey
The journey to fully leverage AI in grocery unfolds in three key phases. These are progressive steps that enable the retailer to move from simple task automation to full-scale business reinvention.
- Optimizer: This is where most grocers are today. The focus is on efficiency by using AI to enhance discrete tasks and processes. The organizational impact is relatively limited, with data and technology teams leading the way in piloting new solutions, while HR begins to introduce data literacy initiatives.
- Transformer: As companies gain confidence and experience, AI begins to redefine entire roles and business capabilities. Organizations must invest in upskilling their workforce, defining governance structures and AI policies, thereby setting the foundation for scaling AI across the enterprise.
- Reinventor: In the final stage, retailers reimagine their entire operating model—restructuring teams, redefining processes and embedding AI into decision-making at all levels to unlock innovation and growth. This requires strong leadership commitment to change management, culture transformation and continuous adaptation to evolving AI capabilities.
Reinventing the future of Retail
The business landscape will evolve significantly, driven by technology and changing consumer expectations. This will create new competitive pressures for grocers as new business opportunities and operational improvements emerge.
Examples of AI-supported opportunities and improvements:
Managing commercial details and issuing the contractual documents that covers 80% of suppliers who represent 20% of the grocer’s revenue.
Monetizing customer attention by enabling brands to advertise within the retailer’s stores (e.g. digital signage and screens)—with automated content curation that is localized and market-trend driven.
Delivering the best pricing options over a period of time based on an assessment. The store manager then decides whether or not to update prices accordingly. These decisions can be reflected automatically in-store thanks to the Electronic Shelf Label network that most grocers have in place.
Analyzing the inventory of every store and proposing promotional campaigns to the store manager. Once validated, these are automatically generated. Relevant promotion messages are also generated and routed to relevant customers.
Enabling frontline workers to use tools like augmented reality glasses or smart badges to help them stock shelves more efficiently or provide accurate real-time customer assistance.
Automatic matching of received invoices, and analyzing discrepancies between delivery notes, orders and invoices. This will leave only a fraction of the invoices received for human intervention.
Utilizing convenient innovations like smart carts, interactive kiosks and checkout-free stores to personalize, simplify and enhance the shopping experience.
Turning the vision into reality
Grocers must focus on five key imperatives to fully capitalize on AI for lasting transformation:
- Lead with value: Grocers should move beyond siloed AI use cases and instead focus on enhancing business capabilities across the entire value chain. Prioritizing AI investments based on business impact ensures that initiatives drive real value rather than becoming isolated experiments. A strategic, outcome-driven approach will maximize return on investment and create lasting competitive advantages.
- Build a secure and adaptable digital core: For AI to be effective, it needs a strong digital foundation. This means investing in the right infrastructure, including scalable cloud solutions, integrated data platforms and secure, AI-ready ecosystems. Without this foundation, AI initiatives risk becoming fragmented, slow or even vulnerable to security threats. The retailers that thrive will be those who treat their digital backbone as a key strategic asset, ensuring AI can scale and evolve with the business.
- Reinvent talent and ways of working: AI will not replace human expertise—it will change how we work. As AI takes over repetitive and transactional tasks, human roles will shift toward strategy, creativity and decision making. New skills will emerge, particularly the ability to navigate AI effectively. Grocers must proactively upskill their workforce, redesign workflows and create a culture where employees and AI collaborate seamlessly to drive better outcomes. Those who embrace this shift will unlock entirely new levels of efficiency and innovation.
- Embed responsible AI: AI is only as effective as the trust it inspires. As AI systems take on greater decision-making responsibilities, retailers must ensure they are transparent, fair and accountable. This means addressing algorithmic bias, ensuring compliance with regulations and building AI solutions that are explainable and aligned with ethical standards. Responsible AI is not just about mitigating risks—it is about ensuring AI enhances customer trust, strengthens brand reputation and delivers sustainable business value.
- Embrace continuous reinvention: The pace of change in retail has never been faster, and AI is set to accelerate it further. Instead of treating transformation as a one-time effort, retailers must embed reinvention into their culture—constantly refining processes, adapting to emerging technologies and staying ahead of shifting consumer expectations. Agility and innovation will define the next generation of market leaders.
These five imperatives are not just guiding principles—they are the blueprint for turning AI-driven transformation into reality. By embracing them, grocers can move beyond incremental improvements and unlock entirely new levels of efficiency, personalization and competitive advantage. AI is not the future—it is already here. The retailers that take bold action today will be the ones shaping the industry tomorrow.