Food (and data) to go? Machine learning drives innovation in ‘digitally-led’ retailers

By Flora Southey contact

- Last updated on GMT

©GettyImages/Nanette Hoogslag
©GettyImages/Nanette Hoogslag

Related tags: Big data, Retailers, machine learning

Artificial intelligence can help drive revenue and increase customer satisfaction in the food-to-go sector, according to IGD head of innovations and futures, Toby Pickard.

“Big data can play a significant role in food-to-go,” ​head of innovations and futures at the Institute of Grocery and Distribution (IGD), Toby Pickard, told FoodNavigator.

‘Food-to-go’ covers food and drinks sold in coffee shops and bakery retailers, as well as supermarket and convenience store grab-and-go options.

In the UK, the food-to-go market is set to grow by a significant £2bn (€2.3bn) over the next three years, and indeed the sector is on the rise around the world – with big data and artificial intelligence tools driving innovation for retailers and manufacturers alike.

In the US, for example, coffeehouse chain Starbucks has harnessed new technologies to gain greater insight into its target markets via a smartphone app.

“With a large portion of transactions coming through the Starbucks app, the company has access to data on its customers, their habits and location statistics,” ​Pickard explained.

GettyImages-510318042
A large portion of transactions come through Starbucks' smartphone app ©GettyImages/temizyurek

“Starbuck’s data-driven Artificial Intelligence (AI) algorithm tracks what customers buy daily to recommend similar products and offers in the future.”

Big data can also be leveraged to encourage collaborations between retailers and manufacturers, Pickard told us.

“…We’ve seen the likes of Mars Inc. and Alibaba Group collaborate to create a new chilli-infused Snickers bar designed to satisfy Chinese consumers’ craving for a ‘mala’ - the Chinese word for numbing and spicy - flavoured treat.”

copyright Mars Inc
©Mars Inc.

Indeed, last year Mars reportedly saved half its standard product development time by using real-time data insights from China’s largest e-commerce and payment platform, Alibaba, to develop the spicy Snickers product.

“The collaboration involved the integration of analytics from Mars’ consumer research, the 600 million users of Alibaba’s online marketplaces and a customer survey aimed at finding a new flavour to bring to the Chinese market,” ​Pickard continued.

Just the beginning?

According the IGD executive, industry is in the early stages of a technological and data revolution – which like any major movement, presents challenges to firms wanting to keep up.

“Companies will need to make sure they stay relevant as the democratisation of data will create opportunities and challenges for all,” ​he told us.

“Digital transformation will require new leadership and a fresh cultural mind set as you look to create flexible, agile ways of working.”

Pickard expects the big data trend to continue, as retailers increasingly become “digitally-led organisations” ​that use complex algorithms and AI to identify new opportunities and set up valuable partnerships and collaborations in the sector.

“Online retail platforms, like Alibaba and Amazon, often have these capabilities in-house. We expect to see more retailers using customer datasets, AI and machine learning at store level to drive revenue and increase customer satisfaction,” ​he said.

Such datasets will focus on what is selling, who is shopping where, as well as inventory levels, to help retailers make informed decisions across their network.

“Some decision making will be solely done by AI, and to truly capitalise on the advantages of this technology there will be an even greater need for retailers and manufacturers to share data and work together on shopper-focused initiatives.”

Related topics: Markets and Trends

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