What impact will AI have on retail?

31 August 2023, 10:00 AM
  • The creators of AI have warned there could be severe consequences if the technology is misused. We discover how it will affect fine food retail and speak to businesses already integrating AI
What impact will AI have on retail?

Whether you love the idea or find it utterly terrifying, AI is here to stay. It’s seeping into every corner of our lives, so the question for businesses is, how to use it. How can it help? So far, for food retailers, this has been in the form of tracking what customers browse and buy, learning how they behave and what they are looking for, but AI is set to do a lot more than that. Should we be scared?

“It’s easy to become anxious about the future - perhaps we should be,” says Colin Campbell, communications director at Bonnie & Wild. “But Bonnie & Wild strives to make a positive impact on people’s lives, and we remain stubbornly optimistic. You’ll always receive a genuinely warm welcome when you visit our food hall.”

Humans still matter in retail

While AI is becoming more normal in our everyday lives, whether we’re aware of it or not, there is a school of thought that believes the rise of AI will only make human interactions and human creations more appealing to us. As we rely more on artificial intelligence, it’s real intelligence that becomes more meaningful. In fine food retail it’s that human interaction that’s most important, and that’s something that can’t be replaced.

“I don’t see front of house being affected much, at least for premium and independent venues,” says Colin. “As well as the quality food and drink, people come to our food hall for that customer experience. They want to be greeted by a warm smile, to be looked after by people who genuinely enjoy working with people, and to experience heartfelt hospitality. I think the same goes for the entrepreneurs we work with. It’s their passion, creativity and people skills that drive their businesses, as well as their love of food. This is what appeals to our customers. I don’t see AI competing with people’s appetite for an authentic human experience.”

So, if it can’t replace us on the deli counter, what can AI do for fine food retailers? Colin notes the differences for fine food retailers compared to other industries, but also acknowledges that AI will affect everyone.

“Hospitality is generally subject to wider socioeconomic forces, as the Covid lockdown and cost-of-living crisis demonstrate, so if the advent of AI technology has a significant impact upon wider society, then of course that will impact us too. I think it will absolutely affect the operational and backend of our businesses.”

Using AI for tracking and suggesting

It is, so far, the operational side of fine food retail that’s seen the biggest growth area for AI. This is where businesses can really make use of this new technology. Harry Higginson, co-founder of The Deli Society, has already seen the benefits of AI to online operations.

“The Deli Society is a free food and drink members’ club. Upon signing up, you can take our two-minute quiz so our AI technology can begin to learn about your favourite foods, wines and the ‘absolutely do not serve me this’ (blue cheese for a lot of our members). You’ll then have a percentage match across every single product across the platform, and the more you rate and review products, the more accurate this becomes. This way, consumers get a fully personalised experience and are able to make more informed purchasing decisions. Just like your local butcher, cheesemonger, fishmonger, salumeria and bottle shop, but all in one centralised online location.”

For Harry this is a game changer, but he doesn’t believe it’s inevitable that every business will have to use AI, and some will still thrive without it.

“I wouldn’t say it’s vital, as there are plenty of businesses succeeding without it and you have 1,000 other variables determining this outcome. However, it certainly helps targeted e-commerce sales through improved personalisation, and trends are showing that over time, consumers are only becoming more demanding for enhanced online experiences.”

Like all new technology, there’s a bit of a race right now to get ahead with AI, and Colin believes it’s a race indies probably won’t win.

“Forward-looking businesses that adopt it will be at an advantage when it comes to improving the customer journey. I think larger groups and chains will be at an advantage here as they’ll have more of a resource to implement, although they tend to be less flexible.”

Will independent retail be able to afford AI?

And that brings us to one of the biggest sticking points for indies. While larger chains have the resources to implement new technology, indies will find this a bit more of a stretch. Is it worth the cost? Harry thinks it is.

“In terms of a financial cost, it’s an investment to differentiate our offering, engage our community, and develop a new-gen online shopping experience in what’s historically been a very traditional and ‘stuck in their ways’ industry. In terms of more macro costs, of course there are implications of job replacement, fake news etc. However, these are implications for larger companies utilising AI in specific industries. Our technology simply enhances the consumer online experience by providing a more personalised service which we see as only a positive change.”

Ironically, Colin sees AI as being able to help with the viability of the cost of implementing AI!

“Any spend will have to be analysed and justified. Perhaps AI will be able to help with that! I suspect there’ll be an explosion of agencies offering AI services.”

Can AI be an environmental tool?

While there are some obvious uses for AI in businesses in general, there are some more specific uses that apply to food businesses. Lizzie Dowling-Nash, marketing and events assistant at Flourish has found a way to put AI to positive use for the planet.

“At Flourish we use AI technology to minimise food waste. We find this extremely beneficial to helping cut down on wastage and keep track of how much food is used and not used. This kind of technology makes it much easier for us to do better when it comes to food waste. Around 26 tonnes of food are thrown away each day in the UK, so having something like our AI technology can be a simple but effective way to reduce that number.”

Lizzie sees this area of use as being in its infancy and is excited about where this road might go. It’s one area where every business can get behind.

“As the world is evolving and technology is becoming more and more involved in everyday life, we aim to use it for the best. Welcoming these technology changes can be a step in the right direction, especially for businesses. AI has the ability to help our planet, making a bigger impact on our eco-friendly practices. We have started with reducing food waste by using AI technology but who knows what will come next?”

While understanding peoples’ wariness of AI, Lizzie sees it as a tool we can all learn to use for good.

“Technology can be a confusing thing, but it can also be used to help businesses like us who source locally where we can and aim to be as eco-friendly as possible. AI can help guide and monitor these important goals of ours and hopefully this can inspire other businesses to do the same.”

Using AI in 2023

Some small businesses are going to resist AI - because of costs, because it doesn’t seem relevant to them, or because of the fear of where this path is leading us all. But now this train is on the tracks it’s moving, and none of us can halt its progress. So, should we all get behind it? Colin is already looking at the ways in which AI can be useful, but understands it’s not for everyone.

“It’s early days, but we’re already exploring ways that AI can improve our service offering, particularly in better understanding our customers and analysing our footfall. In regards to the customer-facing side, we have just had a 3D scan of our venue done. I’m working with the developer, Caledonian Insights, to incorporate AI into the scan with the aim of giving users a more immersive experience of our food hall from the comfort of their homes. I think some independent food businesses may struggle to adapt and utilise, however; and it’s one of the benefits of the collective and collaborative approach we take at Bonnie & Wild that we’re able to look at this.” 

It is early days, and we don’t yet know the full potential of AI for businesses, but in the end, Colin knows fine food retailing always comes down to human interaction, and AI can never replace that.

“I remain optimistic. While no one can truly predict what impact AI will have, I think people will increasingly come to value the idea of authenticity. Human contact, and friendly, genuine interactions with other people will become increasingly sought-after. Perhaps the rise of AI could see the resurgence of the traditional British pub!”

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