AWS for Industries
How the grocery industry can innovate and transform with AWS
The grocery industry is not what it used to be. Reshaped by economics, technology, and a new generation of shoppers with different expectations and behaviors, food retailers have been challenged to deliver on their brand promises while creating competitive differentiation. The lingering effects of COVID, rising inflation, and a continuing tight labor market have all contributed to rising market pressure and squeezing profit margins.
So, it’s no surprise that grocers are looking for ways to tackle these challenges and drive business growth and profitability. At Amazon Web Services (AWS), we are seeing more grocers investing in new technologies that can bring better shopping experiences, data insights, and retail execution to their operations. These include industry-specific innovations in areas like machine learning (ML), personalization, digital commerce platforms, smart devices, and more.
How AWS solutions can help transform the grocery industry
AWS and its partners are enabling these innovations by delivering cloud-native digital grocery solutions through a combination of builder-based cloud capabilities, industry-oriented managed services, and a network of thousands of partner-provided product and consultancy solutions. Here are 11 solutions that grocers around the world are using to transform their retail food business and drive customer experience and revenue. You can learn more by downloading the new ebook: Grocery solutions from AWS that innovate and differentiate.
1 – AI/ML-based category management and inventory planning. AWS provides a number of options for grocers seeking better predictive planning to optimize their inventory, supply chain, and price/promotion workflows. Amazon Forecast, an AWS managed service, uses artificial intelligence (AI) and ML to help grocers easily and accurately forecasts business outcomes. After implementing this service, More Retail, a 600-store grocery chain in India saw forecast accuracy improve from 25 to 75 percent, out-of-stock reductions of five percent, and perishable waste reduction of 20 percent.
2 – Digital commerce. Using builder-oriented cloud services from AWS, grocers are creating robust ecommerce platforms at scale—enabling advanced product search and new ML-driven product recommendations. AWS Retail Competency Partner VTEX helped French grocery retailer Carrefour deploy a grocery-oriented digital commerce platform that increased conversions by 30 percent in Brazil.
3 – Real-time personalization. Amazon pioneered personalization in 1998 when it provided instant product recommendations to customers. Today, grocery retailers can use Amazon Personalize to create near real-time, personalized user experiences, with highly tailored product recommendations, leading to greater offer conversion, market baskets, and more overall revenue. With Amazon SageMaker grocery retailers can build, train, and deploy their own ML models for any use case with fully managed infrastructure, tools, and workflows.
4 – In-store experience. As customers returned to in-store shopping following COVID, they were again frustrated by the traditional checkout process. Enter frictionless Dash Cart technology by Amazon. With these innovative grocery carts, grocery shoppers now have the ability to get in and out of the store quickly by simply adding, removing, and weighing items while shopping and then skipping the checkout line.
5 – Customer 360 for grocery. AWS provides a portfolio of services and partner solutions to help grocery retailers build a data-driven analytic model that captures the 360° details of its customers, helping support highly targeted marketing, real-time personalization, and loyalty program execution. AWS Partners can help the 360° strategy come to life with solutions from Algonomy, ActionIQ, Segment, Tealum, Treasure Data and Amperity.
6 – Sustainability. Increasingly grocery retailers are focused on environmental, social, and governance (ESG) initiatives. AWS and its partners are pioneering new retail-focused ESG solutions that are highly influenced by Amazon’s Climate Pledge. They provide data-driven insights into carbon tracking, supply network transparency, and reduced packaging strategies. Recipe box pioneer Gousto in the UK uses Altruistiq’s sustainability impact management platform, powered by AWS, to help automate data measurement and identify impact reduction activities. As a result, Gousto reduced food waste to less than one percent and cut plastic packaging by half.
7 – Supplier collaboration. Better collaboration between grocers and their suppliers is a win-win for all parties. Retailers gain the insights they need to improve their negotiating posture, and suppliers can leverage insights from retailers on consumer behavioral patterns and category performance. Scalable innovations such as AWS Data Exchange enables the rapid integration of thousands of external data sets within a grocer’s business intelligence platform. AWS Clean Rooms allows companies to quickly and securely share collaborative data with any number of external partners without sharing any raw data.
8 – Smart Store insights and analytics. Optimized for fast-moving consumer retail companies, AWS provides an array of edge-based solutions as part of its Smart Stores initiative. These include Computer Vision, IoT device aggregation, robotics, edge processing, voice commerce, and retail media networks capabilities. For example, Amazon Fresh stores are using Amazon Ads and an AWS-supplied demand-side platform (DSP) to allow consumer packaged goods (CPG) brands to programmatically purchase ad space on digital displays throughout the store.
9 – Customer support. As grocery shoppers broaden their expectations for high quality brand experiences and ongoing support, the need for more data-driven, proactive customer contact solutions becomes crucial. With its rapid deployment and ML-driven engagement capability, Amazon Connect is a cloud-based contact center which can improve agent productivity and the customer experience across multiple touchpoints, including phone, web, or chat. Morrisons, a UK-based grocery retailer with more than 400 stores and 11 million customers, deployed Amazon Connect in 2019 within a single day, helping the grocery chain scale to six times their normal call volumes during the pandemic.
10 – Generative AI. Since the launch of ChatGPT, generative AI has attracted the attention of grocery retailers worldwide. AWS is leveraging its extensive AI/ML experience to bring new generative AI tools and solutions to market, including the introduction of Amazon Bedrock, which is an easier way to build and scale generative AI applications with foundation models. For groceries, it offers the potential for enhanced product search capabilities, more interactive and self-improving loyalty offers, automated content creation, and interactive solutions like conversational wine recommendations.
11 – Grocery IT transformation. To support the growing availability of next-generation grocery solutions, more food retailers will need to accelerate their migration to the cloud. Greater cost efficiencies and flexibility are among the many benefits grocers can realize from migrating their data centers and workloads to AWS infrastructure. AWS provides grocers with smart guidance on how best to migrate strategic workloads, and then leverage the cost improvements to help fund modernization and new solution innovations. Sainsbury’s, the UK’s second largest grocery chain, has been with AWS in its journey to the cloud. AWS supported Sainsbury’s move to a “cloud-first” IT organization, including its award-winning loyalty program Nectar and its mobile app SmartShop. The grocery chain continues to deploy more cloud infrastructure and solutions to AWS at an ever-increasing rate.
Download the ebook Grocery Solutions from AWS that innovate and differentiate to learn more about how some of the world’s top grocery retailers, like Sainsbury’s, Morrisons, and Cencosud use AWS and its extensive industry partner network to support their grocery retail transformation.
Learn more at aws.amazon.com/retail and contact an AWS Representative today to get started.
AWS Retail Competency Partners provide innovative technology offerings that accelerate grocery retailers’ modernization and innovation journey across all areas in the enterprise. AWS Retail Competency Partners offer strategy and deployment services to grocery retailers, to help accelerate their digital transformation.
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