AI and the Evolving Grocery Shopping Experience

How CPG Brands Can Tap in with Personalized, Relevant Ads

By NCS Marketing

A little over five years ago, few could have predicted what grocery shopping looks like today. (Side-eye to that pandemic.) While what we have today most definitely isn’t our grandparents’ experience, we also know it’s not likely to remain the same for long.

So, we recently asked Americans how they anticipated grocery shopping and food choices would change over the next five years. The top response (39%)  – surprise, surprise!! (not) – was increased price sensitivity due to economic shifts.

Some of the other anticipated changes we’ve discussed here before, such as the bigger focus on health-conscious & functional foods (33%). This time, we’re intrigued by the mention of AI: 29% of Americans said they anticipated more automation and AI-driven experiences.

Change is indeed a constant – and technology often drives it. So what does the integration of AI and automation into the shopping experience mean for today’s CPG advertisers?

Let’s unpack this.

The paper grocery list still rules, but AI and apps are on the rise

The paper grocery list - that time-honored tradition – is changing and it’s impacting consumer purchase behaviors. Before consumers head to the store, they peek into their pantries and refrigerators – and jot down what they need. That makes the grocery list a key decision point – and because it’s a step that’s so close to the point of purchase, it’s an opportunity for CPG advertisers.

And right now? The way consumers create their lists is changing.

Although half of Americans still use paper to write their lists, many are using apps and other tech tools too.

This shift to digital grocery lists will provide CPG brands with an opportunity to reach buyers at or near the point of purchase with personalized and relevant shopping experiences. And advertising will take on even greater importance as shoppers turn to apps. Consumer purchase behavior almost certainly will change, as users adapt to AI recommendations based on preferences, product attributes, and shopping history. CPG advertisers have even more incentive to integrate their messages within the apps to strengthen relationships with loyal brand buyers and encourage category shoppers to give them a try.

Younger generations use AI to power discovery of new CPG items

A generational shift is underway, with Gen Z and millennials more likely to turn to AI-powered grocery shopping tools or apps when writing their grocery lists.

Although 34% of Gen Z and 24% of millennials use the basic notes app on their phone most often, they’re also adopting AI-powered apps to discover products and ingredients.

Gen Z is 62% more likely than the average American to rely on product recommendations based on purchase history, and more than twice as likely to use AI-powered search functions in grocery apps. They’re almost two and a half times more likely to rely on smart refrigerators with inventory management to build their lists.

Millennials are 78% more likely than the average U.S. adult to both use a chatbot for customer service in grocery apps and to use AI meal-planning tools.

CPG brands can use purchase data insights to target grocery shoppers as they make their choices in AI-powered apps.

What influences CPG purchase decisions

Nothing gets as close to the final purchase decision as the grocery list. That makes putting relevant messages in front of grocery shoppers at the right time all the more important.

And what sways their purchase decisions? Deals, offers, and healthy food choices.

Once shoppers try AI-powered grocery tools or apps, they can’t stop using it.

Although it’s still early days for the adoption of AI-powered grocery tools, those shoppers who have used it seem to like it – and are willing to stick with it.

CPG brands with omnichannel strategies that incorporate these tools can use them to build stronger relationships with their loyal buyers.

AI is already changing the grocery shopping experience. In our recent report with Digiday on the state of data-driven decision-making for CPG brands, we found that 61% of brands and agencies are using it for customer journey personalization. And that’s just the start. Learn more about how CPG marketers are thinking about AI and the future, and download our report today.