LAS VEGAS — Kroger’s strategy for advancing AI prioritizes removing the barriers that divide the digital shopping world from the physical one, Executive Vice President and Chief Digital Officer Yael Cossett said during a keynote session at Groceryshop last week.
“It’s on us to remove that friction, the burden of having to think differently about how [shoppers] engage with us. And that’s where I think AI really is transformational,” said Cossett.
At the start of this year, Kroger announced the launch of an AI assistant for its employees. Several months later, it unveiled its latest AI-powered shopping assistant. Cossett spoke about what Kroger has learned so far from those rollouts and how it plans to continue expanding AI across its operations.
A guiding principle in Kroger’s AI development includes investing in ways that will ultimately benefit its shoppers, Cossett said. Whether simplifying the employee experience or providing returns for shareholders to reinvest in Kroger’s business, the bottom line must center on customer value, he said.
Kroger is also relying on the same foundational element that has powered its last decade of digital and omnichannel development: customer data science. Cossett said that using its enormous amount of first-party data to lead growth will help ensure that the company’s next steps in AI technology are grounded in trustworthy intel.
Kroger has spent over 20 years investing in data science, with its original goal being to understand and personalize the online customer experience, Cossett said. Over the last decade, the grocer also accelerated investments in digitizing the company’s “operational backbone,” he added.
Cossett said Kroger’s focus is on both control and flexibility. It wants to control the data that underlies its AI efforts while also having the flexibility to work with different partners and shift its approach as needed.
“Things are moving so fast,” he said. “We want to make sure we build proprietary models on top of our proprietary data while also partnering and leveraging frontier models and partners who have built capability that can impact the customer experience.”
Now, Kroger has the opportunity to further meld these efforts, bringing consumer context, based on consumer data science, together with operations like supply chain and merchandising, Cossett said.
“Without artificial intelligence, I think consuming all these signals and optimizing these signals around the customer is not practical,” he said.
What Kroger has learned about its shoppers
Numerous speakers at Groceryshop noted on Tuesday that the pressure on grocers to invest in AI right now is high. But as they embrace the technology, grocers should focus on keeping consumers’ trust as they look to solve their problems, Cossett said.
For example, while some consumers are comfortable with the idea of having AI perform automatic refills or recurring transactions based on their profiles, Cossett said he doesn’t think grocers should chase this opportunity.
“I think there is still a significant level of emotional connection between the customer and what they are doing for meals for their family that will continue to have an important place,” he said.
The launch of Kroger’s AI shopping assistant brought to light additional insights on where the grocer’s customers stand on adopting AI in their shopping journeys.
Making AI-assisted shopping accessible to all of its shoppers quickly debunked any assumptions about which generations like to use the technology, Cossett said. He thought the shopping tools would mainly appeal to younger consumers, but said so far the appeal has proven to be universal.
Another surprising discovery was the uptick in product discovery because shoppers have access to more precise recommendations, Cossett explained.
In other words, though the AI tool made faster baskets and narrowed engagement, it also led to shoppers exploring more on their own.
“[B]ecause we’ve simplified a point of friction… it’s given time and confidence to the customer to branch out beyond that specific purpose, and I think that’s a very exciting thing,” Cossett said.
